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Macy’s mentioned “multichannel” 26 times in its 2014 annual report, yet e-commerce was never mentioned despite being up 30% year-over-year. While Macy’s has a successful e-commerce business, its strength – or ammunition against Amazon – lies in last mile fulfillment. By shipping e-commerce orders from its stores, Macy’s has been able to create 775 unique points of distribution.

Target and Walmart are other players that have been aggressive in adopting omnichannel capabilities, particularly curbside pickup. Target currently offers curbside in 11 markets, while Walmart is piloting in about 5 markets in the U.S.

However, these investments have not yet yielded stock market gains. Macy’s stock has dropped by more than 40% in the last six week, prompting them to enter new categories such as consumer electronics. L2 believes the omnichannel investments Macy’s has made sets the company up for success in the long term. Yet, the product categories that Macy’s sells and consumer demographics are providing challenges for them in the short term. Over the longer term, Macy’s will need to figure out how to compete on endless aisle as it tries to take on Amazon head-to-head.

 

 

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