Macy's
shows it can make big bucks online
It took more than a decade,
but tech miracles are taking place on 34th Street
Macy's Inc. was one of a handful of major retailers this holiday season whose sales were not stolen by the Grinch. Its secret weapon against stingy shoppers? E-commerce. The 850-unit chain logged a 4.1% December gain in same-store sales, led by a 52% increase in online sales.
We have taken a number of
steps to make the shopping experience online mirror the stores, and vice
versa," said Jeff Kantor, chairman of Macys.com. "We want customers
to be able to shop Macy's whenever, wherever and however they prefer. Reaching
customers through stores, online and mobile gives us a lot of
flexibility."
To get ahead of the pack,
Macy's Chief Executive Terry Lundgren has moved the store beyond its
bricks-and-mortar roots to become more nimble technologically. Today, its
website employs 1,150 workers, 650 of whom are based in Manhattan (where they
make up a significant portion of the borough's technology workforce).
In the
past year, the department store, which had 2011 net sales of $26.4 billion, has
greatly improved its inventory strategy by building new warehouses and drafting
nearly 300 stores to act as e-commerce fulfillment centers. Online orders will
rarely be out of stock.
Macy's has also made its
stores more innovative: The Herald Square flagship this past fall unveiled a
39,000-square-foot shoe department where associates use iPod Touch devices as
cash registers, making checkout a relative breeze.
"The Internet has not
only helped Macy's engage and serve new customers, but it has also helped them
serve existing customers better," said Liz Dunn, a retail analyst at
Macquarie Capital Inc. in a recent research report.
Macy's Internet
transactions crossed the $2 billion mark for the first time in 2012, according
to a company spokesman. (The publicly traded company will report full-year
results at the end of February.) Macy's is banking big bucks on such digital
upgrades.
Though Macy's spent $764
million in 2011 on capital expenditures—a 51% rise over 2010—the spokesman
declined to say how much of that was spent solely on the digital sector. The
company's share price rose 19% in 2012 and currently trades at about $37.
Tough competition
Such growth is in stark
contrast to five years ago, when Macy's was losing market share to new digital
competitors like Gilt Groupe. Shoppers complained about customer service and a
website that was difficult to navigate. The department-store chain, which also
owns Bloomingdale's, is finally seeing the fruits of a 15-year-old Internet
strategy that has undergone its share of pitfalls.
"The department-store
sector invested early, before a lot of the technology was developed, and built
these homegrown solutions that had a hard time tying systems together,"
said Sucharita Mulpuru, a vice president and principal analyst of e-business at
Forrester Research. "Macy's has done a really good job of recognizing
those challenges and is probably one of the most advanced of the department
stores as a result."
Macy's still faces some
tough competition, however. Nordstrom, the Seattle-based department store known
for its customer service, reported an 8.6% increase in same-store sales during
the holidays. Several off-price brands—including TJX Cos., owner of the
Marshalls and T.J. Maxx chains, and Ross Stores Inc.—also performed well. Yet
Macy's, as the largest specialty-apparel retailer in the country, has the
muscle advantage.
It's been using that muscle
to improve the way customers find inventory. In late 2011, Macy's piloted a
"store-to-door" strategy in which stores, in addition to warehouses,
were used as fulfillment centers for online orders. The system specifically
targets the Macy's locations with an overflow of specific items, so that the
store can move the merchandise without resorting to discounting at the end of
the season. By late last year, the program had been rolled out to nearly 300
stores. About 10% of online purchases are currently fulfilled by stores.
In July, Macy's also added
a 1.3 million-square-foot distribution center for e-commerce orders in
Martinsburg, W. Va., its third such warehouse.
"They've had a real
breakthrough in terms of how they gain access to available inventory versus a
year ago," said Bob Grayson, founder of retail consultancy Grayson Co.
"They're not likely to lose a customer for an item being out of stock."
In-store customers are also
seeing technological improvements. When Macy's unveiled its new shoe department
at Herald Square, which was part of the store's $400 million renovation, it
installed 10-foot video-screen displays illustrating outfit combinations that
vary images throughout the day.
'Crossed the chasm'
In the jewelry departments
of some smaller stores, associates use iPads to show consumers merchandise
beyond what's in stock, an initiative that has been rolled out to 50 stores so
far.
"Digitally, they've
crossed the chasm of the worst of it—they've figured out how to integrate their
systems so the biggest expense is behind them," said Ms. Mulpuru.
"Now they have to take the assets of what's remaining and replicate.
Source:Macys
GM in talks with Facebook about return
to paid ads
|
General Motors Co. and Facebook Inc. are discussing the return
of the automaker as a paid advertiser about eight months after GM said it
would stop running ads on the social networking website, a top GM executive
said.
Alan Batey, GM's
interim marketing chief, said at the Detroit auto show that discussions with
Facebook officials were ongoing though the Detroit company had nothing to
announce about a return to Facebook as a paid advertiser.
"We're still
actively talking to them and looking at opportunities that come our
way," Batey told Reuters on Tuesday. "I wouldn't tell you that
there's a Mexican standoff here. We just didn't see the value" in the
ads.
Three days before
Facebook's May 2012 IPO, GM said it was dropping paid ads on the Web site
because they had little impact on consumers.
GM has previously said
it spent about $40 million on its Facebook presence, but only $10 million of
that was paid to Facebook for advertising. The rest covers the creation of
content and the advertising and media agencies involved.
Sources said last
summer that the two companies were discussing GM's return and Facebook
offered to provide GM with data showing the effectiveness of the Web site's
paid ads. However, Facebook at that time did not offer any concessions.
Batey declined to
discuss the current talks or to provide a possible timing for GM's return to
Facebook, where it still has pages for which it pays no fees to market its
car and trucks.
"I wouldn't want
to predict if there's something, but I also wouldn't be surprised if there
were some things," he said.
Also last May, GM said
it would not advertise on CBS during the 2013 Super Bowl because the ad spots
were overpriced. Batey said that decision remained in place.
Separately, Batey said
he had nothing to announce on GM hiring a permanent chief marketing officer.
GM's former marketing chief Joel Ewanick was fired last August for not
properly disclosing the full cost of a $559 million sponsorship deal with
English soccer club Manchester United.
Source: GM/Facebook
For
CBS in Particular, Super Bowl is About More Than Just Football
Big Event Will Be Used to
Promote Daytime, News, Radio and More
When most people think
about CBS, they likely conjure up the network's prime-time lineup, which
includes massive crowd-pleasers such as "NCIS" and "The Big Bang
Theory." But if CBS Corp., the company that owns the network, has its way,
TV fans who tune into the broadcast outlet to hear about all things Super Bowl
will also start to consider some of the company's less popular properties.
As disclosed in a recent
meeting with reporters, CBS Corp. intends to hitch the wagon of several
programs and assets to the grand event that is its Feb. 3 broadcast of Super
Bowl XLVII. In the days leading up to the broadcast, CBS will link its
"CBS Evening News," "The Talk" and "CBS This
Morning" to the Super Bowl, no doubt in the hopes the shows gain exposure
to the broad audience that will naturally be interested in the event. After the
game and immediately post-game coverage end, CBS will run a new episode of the
freshman Thursday-night drama "Elementary" and follow it with a
special broadcast of "The Late Late Show with Craig Ferguson."
Not only will the company
tie its CBS News and daytime shows to the Super Bowl, but it will also use the
girdiron classic to draw attention to its CBS Sports Network cable outlet and a
new sports-radio network it recently unveiled.
The Super Bowl broadcast
"is probably the biggest day of the year for the entire corporation,"
said Leslie Moonves, president-CEO of CBS Corp., during the news conference.
Other big media concerns
have used the Super Bowl to promote a wide array of other properties they own.
NBC used its broadcast of Super Bowl XLVI in 2012 to spark attention for its
NBC Sports Network, once known as the second-tier sports-cable outlet Versus.
In 2009, NBC ran an ad for the Hulu video-streaming service it co-owns during
the Super Bowl. (It's doubtful that we'll see a Hulu spot this year on CBS,
which has never invested in the property.) In 2011, News Corp.'s
Fox ran promos for shows like "Terra Nova" and "The X
Factor" that had been announced but had yet to debut on the air -- as well
as for The Daily,
News Corp.'s now-defunct iPad newspaper.
For CBS Corp., however,
the stakes may be somewhat higher. The company derives approximately 66% of its
revenue from advertising, according to research from Nomura Securities analyst
Michael Nathanson, and the bulk of those ad dollars come from its TV programs.
And unlike Time Warner, NBC Universal, Viacom
and News Corp., it lacks a major movie studio to spark revenue from
international film sales or a phalanx of top-tier cable channels to help drive
more funds from retransmission deals (though it owns Showtime and has been
pushing hard in recent years to secure retrans funds for its CBS network).
Broadening exposure of "The Talk" and "CBS This Morning,"
among others, could help the network grow the audience for such programs, and,
over the long run, charge higher advertising prices.
The bulk of the tie-ins
will have people like Charlie Rose from "CBS This Morning," Scott
Pelley from "CBS Evening News" and Julie Chen from "The
Talk" anchoring their programs at various points during the week leading
up to Super Bowl XLVII from a CBS broadcast center dubbed "Jackson
Square." At "The Talk," for example, rock band Train will serve
as a house band for the daytime gab-fest -- not the usual sort of thing for the
show.
CBS is also pushing some
of its top properties toward the game. "Face the Nation," which in
recent months has often trumped NBC's "Meet the Press" in terms of
viewers between 25 and 54, will serve as a Super Bowl kickoff of sorts by
broadcasting from New Orleans at 10:30 a.m. on Feb. 3.
Source: CBS |
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