Online shoppers spend an additional 25% more when they pick up an order in a Macy’s Inc. store, and now the retail chain is trying to figure out how to get more of those online shoppers into its stores.
Macy’s, No. 6 in the Internet Retailer 2017 Top 500, does not break out online sales in its quarterly earnings report, however chief financial officer Karen Hoguet told analysts on the retailer’s second quarter 2017 earnings call Thursday that online sales were up by double digits year over year for the 32nd consecutive quarter.
“We are generating outsized sales growth in particular on our mobile devices, and they are also being used increasingly to enhance our in-store experiences,” Hoguet told analysts on the call, according to a transcript from Seeking Alpha. “For example, a customer can scan an item on our mobile app while in store to see pricing, availability and any product reviews. They could also then buy the item straight from the app and have it shipped.”
Macy’s is focusing on a number of initiatives designed to drive online shoppers into store, CEO Jeff Gennette said. Stores that are in the same ZIP code as shoppers ordering online could conceivably fulfill 25% of all online sales, Gennette said. That’s important because online shoppers who pick up an order in store spend an additional 25% there when picking up an online order.
The first major step toward attracting online shoppers to stores is giving them greater visibility into store inventory at the local level, he said. To that end, Genette said the retailer is testing a feature called Shop Your Store. The feature, in beta mode now, will allow shoppers to see what sizes and colors their local store has in stock.
“The omnichannel customer is clearly a potent one when they buy in both channels, so all good things come from that,” he told analysts.
Macy’s also is relocating where online shoppers pick up their orders in a store to ensure the location is highly visible and staffed properly, Gennette said. Macy’s is offering online shoppers who pick up their purchase in-store a 15-20% discount on an in-store purchases in an effort to get more shoppers to use the service.
For the second quarter ended July 29, Macy’s reported:
- Net sales of $5.552 billion, down 5.4% from $5.866 billion during the same time last year.
- A year-over-year comparable sales including online decline of 2.8%.
- Net income of $113 million, up from $9 million last year.
For the first six months of 2017, Macy’s reported:
- Net sales of $10.890 billion, down 6.4% from $11.637 billion last year.
- A year-over-year comparable sales including online decline of 4.0%.
- Net income of $183 million, up from $124 million last year.