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When we speak to retailers about their biggest challenges, the challenges involved in keeping up with the pace of change is a common theme. However, we think it is more about predicting tipping points. Mobile payment options have been around since 2011, but it is only with the launch of Apple Pay in 2014 that we are finally seeing some traction with consumer adoption (beyond the success at Starbucks), and 2015 is likely the year when mobile payment will take off in a meaningful way.
The same can be said of omni-channel. Talk of omni-channel as a retailing trend began in 2008. Omni-channel gained momentum in 2014, but the recent announcement by Macy’s of a major restructuring to be better integrated for omni-channel is sending a message: “It’s here. Embrace it.”
Research and Analysis: the Key to Omni-Channel Success
Macy’s has been planning for omni-channel since 2009. This announcement doesn’t mean Macy’s had a sudden epiphany; like anything, omni-channel is a slow build. The key to success is using trends and consumer research to better predict when it’s going to boil over so that you are fully in the game by then. Nobody could have foreseen in 2009 where omni-channel was going to be 5 years later. And the same will be said in another 5 years – the industry landscape will again be vastly different.
Macy’s Restructuring Makes Sense
The centralized buying announced as part of Macy’s restructuring makes complete sense. You cannot be seamless—nor can you be operating at optimal efficiency—if you have a different buyer for bricks-and-mortar and e-commerce. What was not specified but what we would hope will also occur is the consolidation of data.
Retail Category Consultants always reminds clients about the importance of using data to personalize offers to customers and the use of data to understand the results of marketing programs. With omni-channel, retailers need to have a holistic view of the customer’s purchasing behavior, which will be central to their buying decisions.
Similarly, having one merchandising and marketing team for both channels strengthens the brand positioning and gives it a unified voice. The customer will finally stop feeling like they are engaging with a confused brand, where the right hand doesn’t know what the left hand is doing.
Customer Service: A Potential Challenge?
We take a more cautious view of Macy’s decision to shed 2,200 sales associate jobs across its network of 830 stores. We would expect that if these people are given other jobs within the company (as Macy’s has said they would), it is with the goal that Macy’s customer experience will be improved. Store associates need to be recruited with a different skills set in mind: knowledgeable product experts who are flexible and adaptable, with a view to what is available in-store and online.
While the stock markets didn’t take to the Macy’s restructuring news in a positive way, we are hopeful that Macy’s is choosing a customer-centric view to their business. Using consumer driven insights and research will help ensure that Macy’s is on track with consumer trends and spending their marketing and restructuring dollars wisely. This is one way to stay ahead of their competition.
Macy’s is not the first retailer to see the omni-channel light and restructure accordingly, and we expect to see many more to follow.