Macy's Killing Giftwrap Could Be A Great Move, If It's Public Enough

When Macy's confirmed this month that it is abandoning its classic giftwrap service at almost all of its stores (five out of the chain's 850 stores will still offer the service), it became a wonderful metaphor for the industry's lack of true service, one nicely represented by something that is—by definition—cosmetic and purely decorative.

In difficult economic times, functionality reigns; it can even trump price. But so many retailers miss golden opportunities to make their case effectively. Consider how many technologies have been portrayed as undermining customer service: self-checkout, kiosks, ATMs and even some elements of today's mobile offerings.

The counter argument has been that these technologies allow retailers to redeploy people into positions where they can truly deliver customer service. The classic example: taking cashiers out of checkout lanes and instead having them carry customers' bags to their cars.

Would Macy's be facing less of a backlash if, instead of quietly laying off some of those box wrappers, it prominently featured them in highly visible customer-facing situations? Consider an associate working aisles wearing a button that declares: "I was taken off giftwrap so I can help you here." Or maybe putting that associate back on the checkout lane, with this button phrasing: "Because I'm here and not in giftwrap, you'll be done five minutes sooner."

Some retailers have discovered that kiosks are much better received when they are seemingly being used to help/assist associates rather than replace them. (Perception, yet again, beats reality.) These stores will have an associate work with a customer at the kiosk, thereby leveraging the associate's training (where he/she can presumably navigate the screen a lot faster than can the customer) and the kiosk's deep reservoir of demos and inventory files.

In Macy's giftwrap situation, the chain clearly seems to be making the right move. If customers are overwhelmingly not using giftwrap, it's silly to maintain the service. Dan Butler, VP/Retail Operations at the National Retail Federation, said the causes are lengthy. Many chains are pushing very attractive giftbags (some of Nordstrom's packaging is nicer than bows and ribbons), and the soaring numbers of giftcard purchases complicate matters. In many malls during the holidays, charities set up special rooms solely for giftwrapping and many consumers want to participate as a way of making a donation.

And Macy's chose to not eliminate giftwrap globally, opting to preserve it for some of its largest and more upscale locations: Chicago (State Street); Orange County, CA (South Coast Plaza); Miami (Dadeland); San Francisco (Union Square); and, of course, its Miracle On 34th Street flagship, New York City's Herald Square.

Some observers have disagreed with the Macy's move, suggesting that as frills and similar services are cut back, Macy's starts to lose its differentiators with discount chains. That criticism doesn't seem to wash. If few consumers are using the service, it isn't a very helpful differentiator. As long as Macy's redeploys those people—as visibly as possible—to roles where they can perform services that customers truly appreciate, I can't see the objection. Even Kris Kringle would be OK with that.