Macy’s, a leading retail chain in the US, has unveiled its latest strategy dubbed “A Bold New Chapter,” with a significant emphasis on digital transformation to revitalize its operations and boost revenue amidst challenges in the retail business.
Laura Miller, Chief Information Officer (CIO) of Macy’s, is spearheading the company’s digital initiatives. Her responsibilities include overseeing Macy’s information technology platforms and teams, along with the company’s data and analytics center of excellence.
Under her leadership, Macy’s aims to adopt a data-first approach to modernization, leveraging personalization, AI/ML solutions, warehouse automation, and labor optimization. Macy’s does not reveal its spending on IT.
The announcement of this new strategy called A Bold New Chapter follows a notable decline in Macy’s revenue, including a 7 percent decrease in digital sales in 2023, contributing to an overall 5.5 percent drop in total sales, amounting to $23.1 billion.
STRATEGIES
In a bid to return to top-line growth, Macy’s has outlined three key areas of focus. Firstly, the company plans to revitalize its product assortment to enhance both relevance and value.
Secondly, Macy’s aims to modernize the shopping experience to ensure convenience, ease, and seamlessness across all channels, with particular attention to digital excellence.
Finally, Macy’s intends to streamline operations by closing approximately 150 underperforming locations, prioritizing investments in around 350 strategic locations, and expanding its small-format stores.
Furthermore, Macy’s aims to capitalize on its strong position in the luxury market, leveraging brands like Bloomingdale’s and Bluemercury to bolster its store fleet and digital presence.
Currently, about 80 percent of Bloomingdale’s digital sales are in markets where it has physical stores. Macy’s believes that entering new markets should only benefit the digital business further.
Macy’s has also emphasized the importance of digital initiatives in enhancing the overall customer experience. The company views digital platforms as crucial gateways for customers to interact with Macy’s, offering personalized communications and recommendations to streamline the shopping journey.
Adrian Mitchell, Macy’s Chief Financial Officer and Chief Operating Officer, in its earnings report, expressed confidence in the growth potential of Macy’s digital channels, including the Marketplace and Macy’s Media Network, designed to enhance profitability and customer engagement.
TECH FOCUS
From a technological standpoint, Macy’s strategy entails simplifying and modernizing its supply chain, planning, allocation, and technology operations. These efforts aim to drive improved inventory productivity and generate cost savings of approximately $100 million in the current fiscal year, with an annual run rate savings projected to reach $235 million by 2026.
To achieve these goals, Macy’s plans to invest in automation across its facilities to reduce fulfillment costs, enhance delivery efficiency, and optimize its distribution center network. Additionally, the company intends to streamline business processes through the adoption of AI, enabling faster decision-making and enhancing customer and employee experiences.
Rajani Baburajan
