Tuscon, Ariz.—For Macy's (NYSE:M), a five-year plan has powered it past many pure plays as the retailer looks to the future and the next five years. And for Macy's the future is in stores.
"If you had asked me five years ago if I had too many stores, I would have had a different answer five years ago than today," said Macy's Chairman, President and CEO Terry J. Lundgren. "The consumer has changed in a rather dramatic way and Macy's has gone from a traditional department store to an omnichannel retailer."
Lundgren delivered the opening keynote at the University of Arizona's Global Retailing Conference in Tuscon, Arizona, Thursday. He also delivered a vision for a 150 year-old department store that is adapting quite rapidly to digital times.
"What we've learned in the past five years is important, but it's really setting the baseline for what's to come," he told attendees.
And what's to come, for Macy's and Bloomingdale's, is more stores. And in spite of the fact that Macy's has closed more stores than it opened in the past five years, "I really believe that stores will be involved," he said.
Macy's shoppers who engage with the brand on multiple touchpoints or channels spend eight times more than those who don't.
Of course, Macy's is investing in technology. "One hundred and fifty percent of what we're saving by not building new stores is going into technology," said Lundgren. "We think that's what's given us a head start with the omnichannel consumer." Macy's is estimated to have spent close to $2 billion on technology in the last five years.
The company opened and has continued to grow an office in San Francisco, where being part of the Silicon Valley technology community and having access to emerging talent is critical. Macy's is not alone in this type of effort: Target and Walmart have innovation centers and technology-focused operations in the area.
Macy's was also among the initial adopters of Apple Pay. Accepting Apple Pay is a risk for any retailer, in that Apple then keeps all the data. "I need that data," said Lundgren. "If I'm going to be relevant to the customer, I need to know what they want. And to know what they want, I need to know what they've done." Lundgren believes Apple Pay will ultimately make data available to retailers in some way. "I believe that or I wouldn't have (engaged with Apple Pay)."
International expansion is another area ripe for growth for the retailer, but may be better suited for its Bloomingdale's brand. "To move the needle with Macy's, you can't do it with one store here or there, but you can with Bloomingdale's," he said. "So you may see something there."
"We're not slowing down we're not stopping," said Lundgren. "And our customer is doing the same."
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