Blurred Lines: Macy’s Approach to Omnichannel

In an effort to cut down on excess inventory and get products into their customers hands as fast as possible, no matter where they purchase it from, Macy’s is increasing their omnichannel efforts. According to Cincinnati.com, Macy’s is expanding to 500 fulfillment centers and can ship products from nearly two thirds of their retail stores.

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From the article:

“If you want something at a store and they don’t have it, it’s a missed sales opportunity,” said Fitch Ratings analyst Monica Aggarwal. “Fulfillment departments are about maximizing revenue.”

The effort is pioneering the way department stores manage their inventory. Analysts say the strategy allows Macy’s to have it both ways: leveraging the appeal of in-store shopping with online efficiency. Macy’s is even bragging about its shipping savvy in TV ads that just started airing nationwide.

The effort also fattens Macy’s bottom line. Giving customers what they want where they want it is more profitable than trying to sell an unwanted item when the season is over.

The expansion of fulfillment departments – 200 new ones were added this summer – increases Macy’s efficiency in handling its merchandise. Proprietary software analyzes the location of an available item and orders it based on where it’s least likely to sell.

“This helps reduce markdowns – you want to sell everything at full price,” said Gilford Securities analyst Bernard Sosnick.