Retail in a nutshell: Macy’s
Tom Dougherty, CEO – Stealing Share
18 May 2016
How long can retailers go with losses?
Last week, Macy’s reported that same-store sales fell…again. This marks the fifth time in a row Macy’s has reported a negative number. The retailer cited declines in traffic, competitive pressures and a consumer base that is cautious (isn’t that just a restatement of the first thing they cited?).
There are major deep-seated problems in the retail sector. When Macy’s cites traffic declines and increased competition, it is simply stating the effects of a larger problem – what does Macy’s (or most other department stores, for that matter) mean to the consumer?
Apparently not as much as Macy’s would like. (Read a new article on Macy’s and Sears closing more stores)
Macy’s was once a meaningful brand
There was a time when Macy’s actually meant something. It was wildly successful at the turn of the century when Macy’s moved to Herald Square in New York City. By 1924, it was known as the world’s largest store. Through its successes were in a single store, it began to purchase other department stores in large metropolitan areas. As Macy’s profits grew, its desire to expand grew. Today, it is the nation’s largest department retailer.
There is meaning in scarcity. Humans innately place value on it. Scarcity denotes exclusivity. For a long time that is what the perception of Macy’s was – exclusive and scarce. It was a destination. But as it grew, those values dissipated with each retail chain it acquired. It became less scarce and less exclusive. Today, Macy’s stores are everywhere (870 stores) and each is just another department store.
As customers move to other channels and specialty retailers, there are fewer customers shopping in department stores in general. Since there are very few department stores that mean anything, there are fewer shoppers to go around. So yeah, Macy’s, you hit the nail on the head. Declines in traffic and increased competition are the reasons for the disappointing sales.
The problem for Macy’s is that it can’t stem the tide of declining sales by trying to out retail other retailers. That simply would degrade the Macy’s brand further. Macy’s has to rethink something it is probably very uncomfortable examining. Its brand.
Walmart Uber Tom Dougherty, CEO - Stealing Share 23 August 2017 Walmart Uber vs. Amazon Whole Foods? The doubling of the number of cities for the Walmart Uber pilot partnership, in which Uber delivers groceries, demonstrates Walmart isn’t taking Amazon lightly. This...
Deny Climate Change Tom Dougherty, CEO - Stealing Share 22 August 2016 Rethinking Climate Change Is everything in this world today political? Why is climate change a political issue? It is time that we realized that our political bent may very well blind all of us....
Soderbergh Tom Dougherty, CEO - Stealing Share 21 August 2017 Soderbergh, Logan Lucky and the changing movie If you’re a film director of a certain reputation, take heart in the business decisions made by Steven Soderbergh and his newest release, Logan Lucky. The...