Macy’s got it: kill overcapacity before it kills you

Martijn Hoogeveen
By
Macy's webstore

Macy’s Inc. announces to close 100 of its US stores, 14% of its footprint, to start with locations that are worth more as real estate than as retail outlet, according to The WSJ. It’s smart that Macy’s is doing that now that it’s still writing black figures. Shareholders appreciated the bold move with a 17% stock increase on August 11. Macy’s management must have observed retail competitors going down like Dutch retail giant V&D last December and the windfall of recent retail bankruptcies in US retail. All blamed on a sclereotic response to the rise of ecommerce by old-style management that blame market circumstances in stead of themselves. As there’s a huge overcapacity in retail space in all maturing ecommerce markets, it’s critical for classic retailers to shed the overcapacity before the market value for retail locations tumble further in case that they own the real-estate, reduce staff and operational costs of their outlets, and boost their ecommerce capabilities to service clients online.

Why omnichannel by classic retailers fails

Classic retailers make a lot of mistakes which reflect the lack of ecommerce experience on board level. Developing ecommerce capabilities is often a too little, too late, exercise by classic retailers. There are hardly successes for the hailed omnichannel approach by the traditional players. Why is that? Here are a few of the main mistakes:

  • Not appointing an ecommerce director with P&L responsibility on board level with the right experience and fully empowered to do whatever it takes to make ecommerce the most successful sales outlet as fast as possible.
  • Tying the webshop to the physical outlet in terms of a limited portfolio, pricing, delivery and service through the physical outlet.
  • Not fully developing the logistical, 24×7 service, online promotion, usability and product content capabilities needed to run a successful ecommerce activity.

So, just timely downscaling physical outlets like Macy’s is doing is just half the story. The other half of the story is setting the ecommerce activity free and invest in it to make sure it fully meets the contemporary expectations of online shoppers. The investors in Macy’s shares might have been jubilant too early and they might be confronted with the ecommerce incompetencies when the continued rapid decline in outlet sales can’t be compensated by sufficient fast growth in ecommerce sales.

Likethumbsup(7)Dislikesthumbsdown(0)

Martijn Hoogeveen

CEO Icecat NV

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

World map

Iceclog Launch and Improved Icecat LIVE Documentation

“Iceclog” (Icecat content-log) is our new blog, where you will find...
 August 26, 2016
open-live-optimized

Manual for Icecat Live: Real-Time Product Data in Your App

Icecat Live is a (free) service that enables you to insert real-time product content from some 300 m...
 June 1, 2016
http url

Manual for Icecat URL: Links to Product Data-sheets and Images

Version: 1.20, October 4, 2016.The purpose of this post is to explain the Icecat URL method to ...
 October 4, 2015
open-csv-optimized

Manual for Icecat CSV Interface

This document describes the CSV (Comma-Separated Values) variant of Icecat's Open Catalog Interface...
 September 28, 2016
wall-writer-in-action

Iceclog Editor Guidelines: Writing Compelling Posts

The Iceclog Editor Guidelines are a quick guide for contributors to the Iceclog blog or "cl...
 August 17, 2016
open-personalized-csv-optimized

Manual for Personalized Interface File and Catalog

Via the Icecat website and login area, a user can generate personalized or customized CSV or Excel f...
 October 5, 2016
apple_watch_series1

Apple Watch: a Useful Tool or a Smart Toy?

After six months spent with my Apple Watch, I am still not sure if I consider it a useful tool or "j...
 September 30, 2016

Manual for Open Icecat JSON Product Requests

JSON (JavaScript Object Notation) is an increasingly popular means of transferring to data, comparab...
 February 17, 2017

Manual for Testseek Product Reviews Integration via Icecat

Icecat provides aggregated expert reviews from our partner Testseek, as an add-on service for both O...
 October 19, 2015

Icecat Add-ons for Magento, PrestaShop and other Popular Solutions

Icecat has a huge list of integration partners, that make it easy for clients and free users, to mak...
 October 4, 2017