Macy's Embraces Omnichannel Commerce
In today's online retail environment where next-day and same-day shipping is quickly becoming the norm rather than the exception, retailers are being forced to come up with innovative solutions to meet the needs of want-it-now customers. For Macy's, leveraging its national infrastructure of 800 brick-and-mortar stores to serve as fulfillment centers was its solution. The company piloted its ship-from-store program three years ago in 30 stores in select markets. Following a successful pilot, Macy's rolled out the program to nearly all of its 800 store locations.
In a session at the Internet Retailer Conference & Exhibition in Chicago yesterday, Kevin Gardiner, Macy's director of retail services, discussed the company's ship-from-store program, including its challenges, how success is measured, why data is integral to the program as well as future innovation opportunities for the retailer.
While fulfilling online orders in-store has proven to be a success for Macy's, the program hasn't been without its challenges. Chief among those challenges has been associates finding inventory in-store. Merchandise frequently gets moved by consumers shopping in-store, leaving associates hunting down certain products for an hour or more. This isn't an optimal use of associates' time, Gardiner said.
Other challenges have included incongruent product returns — Macy.com customers returning products in-store that aren't sold in that location — and getting store associates on board with this new job function. To help address the latter challenge, Macy's has begun attributing online sales fulfilled in-store to store associates. Customers don't care who gets credit for the sale, Gardiner said, they just want their order.
Macy's ship-from-store program is metrics driven, Gardiner said. The goal of the program is to get merchandise to customers more quickly. Doing so leads to not only happier customers, but benefits Macy's bottom line as well. By fulfilling online orders from the right places — e.g., from a store that has overstock of a certain product — it prevents Macy's from having to mark down the price of that item to get it out the door. Ship from store helps to protect margins when there are overstocks, Gardiner noted.