Jonathan Baskin comments in LinkedIn:
"About 80% of our company’s year-over-year declines in comparable sales can be attributed to shortfalls in cold-weather goods,” said Macy’s CEO. The bigger story is about what happens next.Macy’s has announced that it will cut thousands of jobs, close stores, and hire experts to help it come up with some financial play for its real estate.
"About 80% of our company’s year-over-year declines in comparable sales can be attributed to shortfalls in cold-weather goods,” said Macy’s CEO in a recent news article, explaining the cause of its sever holiday sales decline (he also said a strong dollar depressed purchases by foreign tourists).
Clothing retailers have always had a love/hate relationship with the weather, as it’s a useful prompt for getting consumers to consider their wardrobes. Seasonal changes are what usually gives focus to merchandising and marketing decisions.
When a season doesn’t show up — this winter has been particularly warm in North America, thanks to an occasional phenomenon known as El Nino — retailers can see a decline in shoppers commensurate with the lack of a drop in temperature.
It’s nothing new. Clothing merchandisers risk lots picking seasonal trends much the same way the CDC makes annual bets on flu vaccines. But as the first big retailer to report holiday sales, it will be interesting to see how much, or little, the odd winter is reflected in sales at Macy’s competitors.
The bigger story is about what happens next.
Macy’s has announced that it will cut thousands of jobs, close stores, and hire experts to help it come up with some financial play for its real estate. None of this has anything to do with making better seasonal merchandising decisions, let alone improving its hopes for better sales this year.
That’s because, whether traditional or off-price, most department store marketing shares a similar pitch: We have everything you need, usually followed with some qualifier on prices and store hours. It’s really no different at online retail, though without limits on store visits or requirements for physical travel.
There’s no way Macy’s can merchandise its way out of this pickle, any more than its winter selection got it into the mess. So I’m rooting for marketing to step up and make the difference.
Department stores once provided curated, one-stop shopping experiences for consumers (think Amazon Prime, only with the immediacy of experience that even drone deliveries can’t provide). Sales staff knew their clients, and provided facilitated shopping before anybody had ever heard the word data.
Why couldn't it do it again?
What if its credit card and Star Rewards program were combined, then turbocharged with data science to become a platform for curating selections and, therefrom, special offers and perks?
It would have be legit smart, and not just a glorified cross-selling or CRM tool (i.e. “you liked a power drill, so here’s a wrench,” or “we have a discount on the line of jackets you bought last year”), and instead yield meaningful connections, or anticipate customers’ next purchases. It could better inform those merchandising decisions, and serve as the centerpiece of its brand promise:
We are your store. Literally.
Purchases would yield benefits, elevating membership beyond discounts to offer truly smarter and faster shopping. Loyalty wouldn’t be an awards program, but an evolving relationship that got so useful and cheap that no competitor could beat it. Its people
would make a difference, in the physical world, instead of pushing customers off to rely on algorithms.
Then, connected to its online services, it could realize the oft-mentioned, yet rarely delivered promise of omni-channel shopping.
Marketing this rethink of its business could be a game-changer.
I have no idea if such bold considerations are underway, whether my idea or a better one. But even such a hint would be a more encouraging response to dismal sales than slashing headcount and stores.
If it was successful, it might work in every season, too, irrespective of whether or not the temperature cooperates.
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