Macy’s Woes Can’t Be Pinned On Amazon Alone
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Macy’s made headlines last week with the news that it will shut down 100 stores in early 2017, including their famous men’s store in San Francisco’s Union Square. This wave of closures has in large part been explained by the emerging dominance of e-commerce. It makes sense to lay all of this at the foot of Amazon’s aggressive business model—but this assumption obscures many facts, including that e-commerce represented only about 8% of retail sales in 2015.
Almost certainly, e-commerce will continue to grow at a frenetic pace until it subsumes the retail channel as the dominant, table-stakes means of doing business. But beyond this future reality, and based on research represented in this recent Retail Report, we see a different, more robust model for retail transformation needed today.
Moving forward, retailers that are looking to grow and ultimately take control of their experience to meet consumer expectations will need to stop looking for silver bullets (mobile only) or outlandish forward-looking visions (“Build a better Amazon!”) and instead understand how the blueprint for success has three distinct pillars:
- Design for Useful Experiences – How can the brand be more useful to its customers—both practically and intuitively? How can we drive relationship and performance in a way that recognizes competition but also looks to other categories for guidance? For example, see how Staples brings its Easy Button to life.
- Develop Consumer-Grade Technologies – What gaps exist that need to be closed in e-commerce, loyalty, mobile and other fields that were once emerging but are now mainstream?
- Create Operational Alignment – Does the organization have the processes and systems in place to quickly adjust distribution and transaction relative to market forces?
By accepting and solving these key questions, retailers like Macy’s can set the stage for a smooth transition to a useful and lasting consumer experience. We’ll have to wait and see whether Macy’s investment in their remaining stores is enough to align its operations and customer experience with empowerment, efficiency, and the sense of quality and value befitting of its iconic brand.
Want to find out more about what customers expect from retail brands? Check out our Retail Report here.