Digital’s Next Wave
The retailer has a well- developed, long- standing online business with room for growth and change.
That was the theme of WWD’s Virtual Retail Forum last month, which drew speakers from companies including Macy’s and L’Oréal.
Matt Baer, Macy’s chief digital officer, joined the retailer on March 30 during a maelstrom. The pandemic was raging. Macy’s Inc. temporarily closed its stores, and the company’s dot-com operations were relocating from San Francisco to New York.
“The fact we were in a middle of a pandemic actually highlighted what the opportunities were and allowed us to start work to achieve our goals really fast in order to serve our customers, and meet that increased customer demand,” said Baer.
He characterized Macy’s as having “a strong physical brick-and-mortar network and a really, really strong and large digital business, but there is also tons of opportunity.”
One opportunity was to rebuild the dot-com team in New York, which involved filling positions that became vacant because of the move. “We added 65 new colleagues in the last six months. We are bringing in all this outside experience where we could learn from them, and create new best practices,” said Baer. “It has been a great six months. It has not been easy, but more than anything, it gives me confidence in terms of our ability to build a really strong foundation and future for Macy’s.”
Baer, who formerly worked at Walmart Inc., spoke in a conversation with Nata Dvir, Macy’s general business manager, beauty and center core.
“The beauty business, which typically over-penetrates in brick and mortar, saw a major acceleration online. As the stores began to close in the middle of March, our consumers wanted to try new products or replenish items they tried before,” said Dvir.
She cited “a surge” in lotions, bath and body products, hair products, nail products — “all the at-home beauty essentials.” Customers have also been buying brow products and foundations to look good for online meetings, she added.
“One of the surprising things is everyone wants to smell good during the pandemic. Our fragrance business has been just on fire,” said Dvir.
“With the launch of curbside pickup, beauty really picked up,” Dvir observed.
She said her team has focused on how customer behavior during the pandemic has changed, and then adapting the offering.
“We changed our product pool, pulled together assortments like skin-care devices, different moisturizers, hair products, nails, things she could really do at home to pamper herself and make it easier for her to shop.”
Dvir had four recommendations for brands to help maximize their business on macys.com. First, make sure the product is relevant in terms of search engine optimization, or SEO, with “really important copy” to drive conversion.
Second, provide strong images, tutorials, textures and swatches. Third, focus on promotions geared toward driving traffic. “It’s not about promoting everything. It’s about promoting things our customers are curious about to make sure they try new products and really be intentional about our promotions.”
Fourth, “We have to continue to make sure we are giving samples. We will continue to push it more,” Dvir said.
Among key objectives for Macy’s beauty business is “replicating great in-store service online. That starts by making it easier for customers to try new products, and focusing on bringing live consultation to our site so our customers feel comfortable trying new things.”
Baer said Macy’s has set three core priorities for its digital business. First, “With everything we do, we think about what the impact is on the customer experience and prioritize our roadmap and resources accordingly.”
Second, “Focus on the fundamentals of our business,” including concentrating on products that garner the most search, the browse function, product detail page, content, friction-free checkouts, and the postpurchase experience, i.e., creating greater transparency in deliveries and returns.
Third, it’s about modernizing retail operations. “We are building a ton of new processes, procedures, tools and systems to support how we work, all with a big focus on data and analytics,” Baer said. “We also recognize we are not going to be able to do everything ourselves to innovate as fast as we want to be or be as agile as we need to be. We are working with Google to re-platform our entire search infrastructure on macys. com,” said Baer. Additionally, Macy’s will soon launch Klarna, an alternative customer payment system allowing for installments.
According to Baer, Macy’s saw about 10 years of growth in terms of digital penetration over the last three months.
“We added four million customers for the Macy’s platform,” he said. “Those customers were younger and more diverse than our current customers. We are working on a lot of engaging ways to continue to build loyalty with those customers and continue to bring them into the fold for the long term.”
According to Dvir, “The same way that Macy’s has seen a younger and new customer shop online, we have seen that in beauty, too.”