Beat the earnings yet close the stores — 100 stores closing by Macy’s

Macy’s beats earnings but still closing 100 retail store locations — My Insights

Here are some of my thoughts on topic of “beat the earnings yet close the stores — 100 stores closing by Macy’s”:

(0) CURRENT STATE OF COMMERCE.

Millennials are mostly digital shoppers — The next generation 100%!

This is the current state of commerce. Gen-Xers may be split between retail shopping and online shopping but majority of Millennials are digital shoppers. The generation after Millennials have access to digital products from the day they are born. I have personally seen 1.5–2 year old kids swiping on an iPad to watch their favorite shows and play games. This is the current state of commerce and things. Embrace it.

(1) LOCATION SATURATION.

Location. Location. Location.

Rationalization of physical stores makes financial sense where in the evolution of retail LOCATION LOCATION LOCATION came with saturation of white-space if you look at the humans to retail space ratio in the US. Now it is over-saturated. It made full sense when you did not have internet. But no longer. When internet is coming of age (still not a teenager from my view), it makes sense for companies like Macy’s to make the retail store locations more of a “destination” store and fill the remainder with digital access to consumers.

(2) SEXY PANTS.

You want your pants 36x30 (my size) and in a style that you really love — only to find out that this average size is out of stock in-store and there is none in the “backroom”. Now the go-to is to try on or like the look and then order the exact product you like right on your mobile while at the store.

(3) AMAZON.

By the end of 2016, Amazon will become the #1 fashion destination and then keep going. With the acquisition of Zappos couple of years ago and a full-on throttle on the Amazon Fashion as a fashion marketplace destination where you can get anything from private label (Yes, Amazon has private label clothing labels) to high end trendy sneakers for $2,500 (and more).

(4) Shhh… ALIBABA.

Yes, Alibaba is coming (kinda already here in the US). Macy’s competition will increase both from Amazon and Alibaba. US is #2 foreign market for AliExpress, an Alibaba company.

(5) MACY’S IS DOING EVERYTHING RIGHT. MACY’S IS ONE OF THE SMARTEST RETAILERS.

Unlike some other retailers where you can point to things that the retailer is doing wrong… this is NOT the case with Macy’s. Macy’s has adapted and continues to evolve and transform into an agile company that it needs to be. Kudos to the leadership for being in the fore-front of this transformation and embracing it wholeheartedly. The only recommendation that I have for Macy’s is to kick the digital transformation and innovation into a much higher gear and also continue to evolve the in-store experience in addition to the store location rationalization. In fact, my recommendation would be to re-invest the savings from the store closing back into profitable store destinations to improve the in-store experiences and bring the digital experiences into the retail store.

(6) ACQUISITIONS.

There are quite a few fashion commerce innovators and startups that would be great for Macy’s to acquire. Some new business models that have been tested over the past several years. Macy’s Ventures (guessing) should produce a fund and start making strategic acquisitions.

Do you agree with my assessment? I would love to read your comments and feedback.

Disclaimers: I don’t own any stock in Macy’s (M), Amazon (AMZN) or Alibaba (BABA).

Thank you to James Orsini and Philip Pravda for recommending the discussion on Linkedin.


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About the Author

Sabir Semerkant is a data-obsessed, Transformative and entrepreneurial Senior Marketing Executive in E-commerce and Digital Marketing offers progressive global experience at growth oriented companies in the consumer goods and e-commerce sector. He is currently the SVP of eCommerce at VaynerMedia working alongside Gary Vaynerchuk and team. He can be found via LinkedIn, Twitter and Instagram. His articles are posted on Medium.