Macy’s efforts to fend off slumping sales amid the ongoing retail apocalypse are finally beginning to pay off.
While the company won’t disclose its latest earnings until February 27, when executives will share results of fourth quarter of 2017 with investors, it outperformed competitors in sell-through rates of new arrival items. According to data from retail analytics firm Edited, Macy’s replenished new arrival inventory at a rate of 7.4 percent compared to 6.1 percent at Saks Fifth Avenue and 4.8 percent at Nordstrom. At the same time, Macy’s has focused on reducing discounting across the board in order to elevate the brand, reducing its amount of sale items by 9.8 percent.
The data could be a potential indicator of improved sales in advance of next week’s report, improving upon sales in Q3 that declined by 6 percent, down to $5.3 billion. Though the company cited natural disasters and unseasonably warm weather as the reason for the dip, it said it anticipated to meet projected forecasts.
The Edited report also shows significant progress in the department store’s recent improvement efforts, particularly around reducing discounting, enhancing digital efforts and diversifying product selection. Macy’s is also experimenting with new forms of brick-and-mortar models, like a recently launched pop-up concept that allows outside brands in select cities to pay for space within the store and sell products on a month-to-month rental basis.
Katie Smith, retail analysis and insights director at Edited, wrote in an email that part of Macy’s rebound can be attributed to a smarter approach to diversifying its inventory in terms of both style and size. Macy’s is now the largest carrier of plus-size clothing among U.S. department stores, according to Edited.
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“While department stores offer the widest range of goods for consumers, quickly addressing shopper demand is essential to rise above the challenges this sector faces,” Smith wrote. “Thanks to Macy’s insightful apparel strategy, it has been able to keep prices consistent and rely less on discounting to appeal to a broad range of consumers — overall, a winning approach.”
Beyond plus-size clothing, Smith said Macy’s has also been savvy in growing other high performing areas like maternity and activewear, increasing maternity styles by 34.6 percent and activewear by 15 percent.
On the e-commerce front, Macy’s also beat out competitors in an analysis of propensity for a consumer to make a purchase online, according to a survey of more than 10,000 shoppers conducted by Market Force Information. The data found that not only had 49 percent of respondents visited the Macy’s website in the past 90 days, but of those, 76 percent made an online purchase.
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Graph courtesy of Market Force Information
The e-commerce findings serves as a positive indicator of Macy’s efforts toward digital innovation, which have been focused on improvements to the Macy’s mobile app, promoting a new loyalty program and enhancing the overall experience on the website. In a call to investors at the end of 2017, Macy’s CEO Jeffrey Gennette highlighted this focus on tech as a major push into 2018.
“To fuel this growth, we’ve significantly improved search engine optimization and expanded delivery processes through buy online, pick up in store,” he said in the call. “We also continue to improve the functionality and user experience of the Macy’s app.”
