• Traditional department stores have been reeling for years, and a big reason why is Amazon. It’s tough to compete when Amazon offers lower (or at least equal) prices, free returns, and is more convenient if you can wait 1-2 days. On top of all that, consumers are increasingly adopting an online-first shopping mentality.

    AdAge wrote an article about Macy’s new strategy to compete with online retailers. The quote below sums up the article rather nicely…

    “This year, [Macy’s] is expected to be overthrown by Amazon as the number one apparel seller in the U.S. In its most recent quarter, Macy’s listed a same-store sales drop of 4.6% and a 39% decline in net income. On Tuesday, the brand warned that it may be lowering some gross margin forecasts, which sent investors figuratively running for the exits. Macy’s shares were down 7% to $22.20 by noon on [June 6, 2017].”

    The numbers referenced in the article are coming from a robust 58-page report done by Cowen & Co. Other key stats from the report states…

    • Amazon’s clothing sales are projected to rise by 30% by next year, which would equate to $28 billion
    • During that same period, Macy’s sales are projected to drop to $22 billion.
    • Within as little as 5 years, Amazon is projected to claim almost 17% of the US clothing market.

    This is how I imagine Macy’s investors “running for the exits”…

    Department stores are dying, duhhh!

    You landed on this blog post because you’re either a business owner, a marketer, or someone in charge of hiring a marketer/agency. While your business might not be as large as Macy’s or JCPenney (yet), any size business can apply some valuable lessons from what’s happening to traditional department stores.

    Here are the 3 lessons that can / should be applied to any size business.

    1. You have to think online-first

    Even if you’re a business that requires a physical location, you have to think of ways to integrate online services/products. And we’re not just talking about throwing up a basic website with your store hours.

    Let’s pretend that you run a local restaurant. You obviously need a physical location. You’re trying to think online-first, but you’re struggling coming up with ideas. Here are a few ideas we came up with.

    • “Order online in advance, skip the line”
    • Ship a famous menu item anywhere in the US (ex: Mail our famous cinnamon buns to your family this holiday)
    • Integrate with Uber Eats or a similar service that happens via an app
    • Loyalty programs run through an app (see Belly, LevelUp, Perka, etc)
    • Website content that brands your restaurant as a tastemaker (ex: Meet our award-winning chef Michael)

    Your customers want the added convenience of the internet. Give it to them sooner than later… or else scramble like Macy’s.

    2. Sell your product in multiple places

    Consumers are migrating to Amazon for everything– underwear, toilet paper, light bulbs, laptops, surfboards, turmeric, male rompers, you name it. A good chunk of consumers who go to Amazon first might never consider shopping at your business. It’d be a shame to miss out on a possible sale, even if you have to pay a percentage to Amazon.

    Macy’s is on Amazon already, and don’t get me wrong, their own online store should remain their primary focus. That being said, it wouldn’t hurt to put more focus on other channels like Amazon to capture sales that might normally never happen.

    CLICHE ALERT: If you can’t beat ’em, join ’em.

    3. Branding builds loyalty

    Macy’s is struggling in part because they’ve branded themselves as a price leader. Every week, Macy’s seems to be advertised as the BIGGEST SALE OF THE YEAR, and so consumers are looking at Macy’s for deals rather than fashion.

    That might’ve worked before, but it’s a tough sell when you’re going up against Amazon who always has the perceived lowest prices.

    Probably the best way to brand your business is through content marketing. Develop text, video, and imagery that creates awareness, builds trust, and will eventually convert. Build content that brands your business as an industry leader, an expert, and trustworthy source. Then, of course, promote the content on all relevant channels (ex: social media ads, email, PPC, etc).

    Content marketing is a whole blog post in itself, but just know that it’s important for branding your business.

    One last point…

    Don’t wait too long to implement some of these lessons into your strategy. I’d argue that Macy’s will never be able to regain the top spot because they were too slow to respond to consumer trends.

    Feel free to contact us anytime with your questions about digital marketing. One of our specialists would love to chat with you about your business. 

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