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Macy's new Chief Customer and Digital Officer has a long shopping list to deal with as the retailer swings to heavy losses

Stuart Lauchlan Profile picture for user slauchlan August 23, 2023
Summary:
Online and offline revenues are in decline as the US retailer struggles in the post-pandemic climate.

macy's
(PIxabay )

On Monday this week, US retail icon Macy’s welcomed the arrival of a new Chief Customer and Digital Officer in the shape of Max Magni.

Magni’s a a 20-year-plus veteran of McKinsey & Company with extensive experience working across a host of iconic brands in apparel, beauty, consumer goods, hospitality and grocery. He was most recently a senior partner co-leading McKinsey’s digital commerce strategy group NeXT Commerce and the global leader of the Consumer Growth Practices division. 

At Macy’s, his role will be to drive the long term vision and growth of the reailer’s digital business, including e-commerce, mobile apps, the Macy’s Marketplace and the loyalty programs for both Macy’s and Bloomingdale’s. He reports directly to Tony Spring, Macy’s in-coming CEO Elect, who said of Magni’s appointment: 

Max brings to the team an innovative, customer-led mindset that will help advance our digital business and strengthen our customer relationships,” said Spring in a statement. “His passion for and experience with portfolio optimization, e-commerce and digital analytics transformation makes him a great fit for the organization.

Magni and Spring certainly have their work cut out. Yesterday Macy’s released some very poor quarterly numbers. Revenue of  $5.13 billion was down 8.4% from a year ago. Bricks-and-mortar sales fell 8% and digital sales decreased 10%, compared to a year ago. The company turned in a loss of $22 million, compared to a profit of $275 million for the comparable period last year. 

Part of this decline was inevitably blamed on external factors, such as the macro-economic downturn, pressure on discretionary spending and the failure of tourist trade to return to pre-pandemic levels, that last point being a particular vulnerability for Macy’s.

But there are also clearly problems internally that need to be addressed.  For his part, Spring says: 

We are a business committed to transforming, even in an environment that's unpredictable. Despite the macro conditions and challenges, we remain focused on satisfying our customers' desire to shop, off-price to luxury, digitally, on-mall or off-model, and from private brands to up-and-coming and established national brands. Within that framework, our multi-channel, multi-generational, and multi-category platform is an advantage to address changing demand.

Marketplace

He points to the firm’s digital marketplace as a growth driver: 

[This] offers curated categories and brands that seamlessly integrate with the customer experience and have no inventory risk. At Macy's, we're approaching the one-year anniversary of our Marketplace launch. We now offer approximately 1,350 brands on the platform, up from 500 last fiscal year-end, and we grew gross merchandise value by over 116% from the first quarter. At Macy's Marketplace, we continue to see significant cross-shopping, higher average order value, and higher units per order. 

The Macy’s market has recently been joined by a Bloomingdale's Marketplace, with Spring professing to be pleased with the early results. He adds: 

I also want to just remind everyone that Macy's and Bloomingdale's and Bluemercury are omnichannel businesses. And while we will always have these accelerations and movements based on cycles between the channels, our focus is making sure that we satisfy the customer, no matter where they choose to shop. 

So that's a part of our small-format expansion, because customers are going off-mall. That's a part of renovating in beauty at Macy's and on main floor Bloomingdale's, our most important mall doors, because that's where people go to shop. That's a part of our investment into new experiences online, because we want to make sure that we are both a place of transaction, as well as a place of experience on Macy's, Bloomingdale's, and bluemercury.com. So, we really do manage between the channels, but we ultimately are focused on satisfying the customer.

That also means investing in data-led personalization strategies. Spring explains the importance of this: 

It amplifies strategies across our business to increase customer lifetime value and loyalty by improving relevance of every interaction. Our digital and technology teams are in the early stages of implementing multi-step and multi-channel tests. We recently launched several new tools that will allow us to speak even more consistently to our customers across touchpoints, personalized conversations and increase the amount of behaviorally-driven marketing.

My take

The team is highly focused on improving the customer experience, physically and digitally, doing those things that are necessary to create a more seamless and easier omni-channel experience.

As noted, Spring has a lot of items on his ‘to do’ list as he steps up to the plate. He comes across to Macy’s after being CEO of Bloomingdale’s, the sister ship at which he’s worked for the pasat 36 years, so he’s surely had plenty of time to observe where the pain points are. 



Meanwhile, his outgoing predecessor, Jeff Gennette insists: 

We’re multi-channel, multi-category. We’ve got great strength digitally, great strength on mall. We’re building new private brands. We’re reaching these customers with more modernized marketing.

Spoken like the guy who’s on his way out the door early next year…

 

We’re multi-channel, multi-category. We’ve got great strength digitally, great strength on mall. We’re building new private brands. We’re reaching these customers with more modernized marketing.

 

Spoken like the guy who’s on his way out the door…

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