Acceptance of Average

Macy’s is in the news – and it’s not good news.

It was reported on Wednesday that Macy’s is closing 68 stores and cutting more than 10,000 jobs. In one related article, Mark Cohen, a professor at Columbia Business School, said that Macy’s, and its competitors in the bricks-and-mortar retail industry, have been “unwilling to fully acknowledge the reality of their business performance.” I agree.

Now, many casual observers will attribute this subpar performance to the competitive advantages that Amazon and other e-tailers enjoy, such as websites (virtual storefronts that are not burdened by the overhead costs of traditional stores) and logistics that enable fulfillment costs that are a fraction of those paid by traditional retailers. But, if you examine the typical retail customer experience closely, you’ll see an acceptance of average and a host of missed opportunities.

Last November, for instance, I stopped by my local Macy’s armed with a screenshot of a pair of slippers that my wife had captured at the retailer’s website. My daughter’s 12th birthday was fast approaching and, because her size was not available on-line, I found myself on the hunt in the Macy’s children’s department.

For reasons that will become apparent, I prefer to shop at Nordstrom. Other department stores, based on my observations, employ a contingent of bored employees and seem to be continually outdated, even after renovations. It’s as though they cannot keep pace with current retail and consumer trends and are constantly one, two, or three steps behind.

So, here I am in the children’s department at Macy’s. There are two visible employees working in the department. Both were tussling with customers from behind their cash registers. One employee was executing a return for a customer who was clearly annoyed at the process. She stood with her arms folded, sighed heavily, and generally appeared exasperated. The second employee was being challenged by a customer to reduce a sale item by an additional 25 percent. The employee maintained that the discount had already been applied but sensing the agitation of the customer, relented and further discounted the sale item.

When it was clear that neither employee would be immediately available, I ventured into the department on my own in search of the slippers. While I found an array of options, the particular pair I was looking for,  festooned with donuts, was nowhere to be found. I returned to the scene of the haggling and waited patiently behind the customer who had successfully fought for an additional 25 percent discount.

As the transaction concluded and the customer gathered her things, I stepped forward, showed the employee the image on my phone, and asked her if Macy’s stocked these particular slippers. She responded, “No, we don’t have slippers.”

“But you do have slippers,” I countered, “I just came from the slipper section. My wife found these particular slippers on the Macy’s website, but I didn’t see them on display.”

Only then did she concede to accompany me to the slipper section. Once there, she scanned the styles on display (as I had done previously) and said, “I’m sorry, but it doesn’t appear that we carry those slippers. It may be a web-only style.”

From there, I headed to the children’s shoe department at Nordstrom where I encountered a lovely salesperson who sold me a pair of slippers emblazoned with donuts and cupcakes (not exactly what I was looking for, but close enough) and a pair of UGG boots. A second employee in the children’s department sold me two pairs of pajamas and a stuffed Curious George character, entangled in Christmas lights. (I assure you, this was not on my list of things to buy.)

If you’re keeping track, the score is Nordstrom: $276.74 and Macy’s: $0

I pull for retailers like Macy’s who are competing against Amazon. I really do. I want to see them be competitive and do well. Even Nordstrom, heralded for its exceptional customer service quality, is in an uphill battle to compete with Amazon and other e-tailers. One of the few competitive advantages that bricks-and-mortar retailers have versus e-tailers is the ability to showcase products online that can be purchased and delivered the same day. Sure, Amazon is working on drone technology to neutralize this advantage, but that service has to overcome tremendous hurdles before becoming mainstream. (And, even then, I’m curious to see how a drone will deliver a package to my former New York City residence on the 9th floor of an Upper East Side apartment building…)

In Nordstom’s most recent fiscal quarter (reported on Nov. 10, 2016), it enjoyed a 2.4 percent increase in same-store sales, whereas Macy’s reported a 2.1 percent decline in same-store sales during its most recent quarter – hence the impending store closures and layoffs.

But here’s the biggest difference between Macy’s and Nordstrom: Macy’s accepts average and Nordstrom doesn’t.

This blog post has been re-published by kind permission of Steve Curtin – View the original post

Published On: 9th Jan 2017 - Last modified: 17th May 2017
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