Last week Macy’s announced a series of initiatives to evolve its business model and invest in continued growth opportunities as consumers change the way they shop, with a goal of enhanced customer experience.
Among all of Macy’s announced strategic business maneuvers, one key element starts at home: Employee engagement.
“We take employee engagement very seriously,” Jim Sluzewski, Senior Vice President, Corporate Communications & External Affairs, Macy’s told Loyalty360. “We measure it extensively. Employee engagement surveys help us find out where obstacles and barriers are. They tell us how we’re doing and are we keeping our employees happy with what they do. Happy employees lead to happy customers.”
In 2014, Sluzewski said Macy’s shipped more than $1 billion of merchandise to customers from its stores for the first time.
“Essentially, we’re doing three things,” Sluzewski said. “We are restructuring the way our merchandising and marketing operates. In the past, we had a buying organization for stores and for online. We’re 
restructuring that so we have one view of the customer, the inventory, and the business. And so marketing and merchandising can be done more seamlessly so we can do a better job of responding to total customer demand.”
What’s more, Sluzewski said Macy’s made several changes to its stores and field planning processes to improve productivity and reduce costs. The cost savings from that will be applied to growth initiatives such as increasing investments in capacity for websites, functionality for websites, new app, new fulfillment, technology, and “talent behind that technology so we can continue to evolve.”
The customer is changing very quickly in how they shop and buy, Sluzewski said.
“It’s certainly not any great revelation that the majority of customers start their shopping online, and then go to the store to touch it, feel it, and try it on,” Sluzewski explained. “They may buy it in store or from their tablet sitting on the couch.”
Categorizing store sales and online sales is a very difficult thing now, Sluzewski told Loyalty360, because the customer shopping process has become “too intertwined.”
Macy’s Buy Online Pickup in Store service has created a new dimension in customer access and convenience, sparking customer engagement.
“Four years ago if you walked into a Macy’s store, and if we didn’t have a sport jacket in 42 long, we couldn’t help you,” Sluzewski said. “We wondered why can’t we just go into our online inventory and order from an online inventory fulfillment center and send it to you. We didn’t have the technological capabilities. So, we had to buy 40,000 new registers so they could help customers in ways we hadn’t helped them before.”
In 2011, Sluzewski said Macy’s tested a handful of stores as mini fulfillment centers. An order could be sent to one of those stores and the product was then shipped to the customer.
“Customers liked that a whole lot,” he said. “By mid-2013, we rolled that out to every Macy’s store so every store has that shipping capability, making them de facto distribution centers. During Holiday 2013, the Buy Online Pickup in Store was a huge hit. We ensure we have that product physically in our hands and customers receive an email telling them their item is ready for pickup. That usually comes within an hour or two of placing that order.”
The Buy Online Pickup in Store service was rolled out in every Macy’s store last year.
“Customers clearly love it and we’re learning as we go,” Sluzewski said. “It isn’t necessarily a matter of speed and convenience. Many cutomers like the service because it essentially ensures that their trip to store will be productive.”
Here are some of Macy’s announced changes:
Macy’s and Bloomingdale’s are adjusting certain aspects of store and field operations and refocusing the staffing in each store location to facilitate growth, increase productivity, and improve efficiency. Selling service and support is being modified to match business opportunity in each department. An average of two to three associates will be affected in each of Macy’s and Bloomingdale’s approximately 830 stores (out of an average workforce of approximately 150 associates in each store), for a total of about 2,200 affected associates nationwide. The company is working to place as many affected associates as possible in other open positions.
Creating a team within the company to explore potential opportunities for a Macy’s off-price business. While this exploration is in its early stages, the company believes that Macy’s omnichannel infrastructure and insight could lead to innovative ways to deliver value to additional segments of the customer marketplace.
Continued progress in digital retailing, including further developing the technology, speed and customer experience of macys.com and bloomingdales.com as they are accessed via desktop, smartphones, tablets and apps. In 2015, Macy’s is expected to grow its San Francisco-based digital technology organization by hiring more than 150 people.
Advancements in business systems and information technology, including security infrastructure, to deliver the information and functionality required to support a growing omnichannel business.
Increasing direct-to-consumer fulfillment capacity in every full-line Macy’s and Bloomingdale’s store and at the five existing dedicated fulfillment centers located in Arizona, California, Connecticut, Tennessee and West Virginia. In addition, as many as 1,500 new year-round and seasonal associates will be hired this year at a new 1.3 million-square-foot direct-to-consumer fulfillment center now being built in Tulsa County, OK. Initial operations at the Tulsa facility are expected to begin in April 2015, with a total workforce of more than 2,500 associates (1,500 year-round associates and more than 1,000 holiday seasonal associates) expected in future years as the fulfillment center reaches full capacity.
Opening new Macy’s, Bloomingdale’s, and Bloomingdale’s Outlet stores as opportunities arise in new and existing markets. New stores to be opened in fall 2015, as previously announced, include a Macy’s in Ponce, PR, which will employ about 275 associates, as well as a new Bloomingdale’s in Honolulu, with an expected workforce of 250 associates.