Macy’s has joined Nordstrom in betting on digital growth and off-price sales, a departure from what for many decades was a brick-and-mortar business centered on customer service.
Executives said they’ve “updated and accelerated” the department store’s Polaris turnaround strategy, which was unveiled a year ago but derailed by the pandemic. Along with reaching $10 billion in digital sales, that channel will become more profitable, aided by stores that function as fulfillment centers and pickup points, Gennette said. About a quarter of the holiday period’s e-commerce sales were fulfilled by stores, the company said.
Like Nordstrom, Macy’s also plans to increase drop-shipping in an effort to boost margins in e-commerce, where, executives said Tuesday, delivery costs have been the biggest drain on profits. In what appears to be a renewed effort in scaling its Backstage off-price operations, Macy’s will face Nordstrom’s mature Rack, along with formidable players TJX Cos., Ross and Burlington. Launched in 2015 as in-store shops and now running six stand-alone stores, Backstage will expand to “close to 300” Macy’s stores and once again begin opening stand-alone locations, executives said.Retail Dive