Marketing strategies

GR011165

Week - 3

NEW ENGLAND COLLEGE

Marketing Strategies - 202146 - CRN105 – Styffe

Date: 07/08/2021

Macy’s E-commerce Competitors in the Retail Chain Store Market

The retail industry is highly competitive. Macy’s operations compete with different retailing formats such as department stress, online retailers, general merchandise stores, etc. Macy's seeks to gain more customers through the provision of superior selections at their stores and a great shopping experience online (Swenson, 2019, p. 13). The main competitors of Macy’s are:

Amazon

This company was founded by Jeff Bezos in 1994 and it surpasses Walmart in 2017 as the best retailer in the United States. It also serves as the largest e-commerce platform across the globe where its websites receive customer visits of approximately 2.02 billion per month. The greatest advantage that Amazon has always had over the years is its ability to take care of its employees as well as its vast products’ collection that compete with other rivals. Moreover, since mostly online customer transactions occur, some costs of employees, real estate, and tax are substantially mitigated. This translates to more affordable product costs for the customers. For these reasons, Amazon has always been ahead of the game because it is associated with multiple industries such as cloud services, e-commerce, AI, digital distribution, and physical stores. Macy’s has also invested in online retailing but it needs to expand and invest in modern technologies to ever get a chance to surpass Amazon (Redd & Vickerie, 2017, p. 127).

Dillards

This is a U.S. department store chain that concentrates on opulent items. Dillards was started by William T. Dillard in 1938, and it took about 32 years to become a chain. This company has stores across 29 states in the U.S. and about 39000 employees. Similar to other expensive stores, Dillards not only sells designer brands for costly prices but also advocates for a great customer experience. The company’s website clearly states their aim of delivering service, style, and value through exceptional customer care. In 2019, Dillards earned approximately $6.5 billion in revenue although it is yet to beat Macy’s in both online and offline sales.

Target

Target is a U.S. retail corporation that was founded by George Dayton in 1902. It currently takes the 8th position in the list of the largest U.S. retailers. It also boasts 1800 stores in the country and more than 360000 employees and 11000 locations across the globe. Target also launched schemes such as Low Price Promise and Expect More Pay Less to attract new customers and also retain loyal ones. Target is linked to the retail industry and it is inclusive of a small format, discount store, and hypermarket. It delivers diverse products that are inclusive of pet supplies, games/toys, garden and lawn items, apparel, electronics, etc. In 2015, Macy’s was regarded as the largest department store. In 2019, Target made more than $78 billion which was more than three times what Macy’s made in the same year (Ikeler, 2016, p. 60). This is probably because Macy’s market is concentrated in the U.S. This means that Macy’s had continued to face immense online competition and it needs to restructure its marketing plan.

Kohl’s

This U.S. department store was founded in 1962 by Maxwell Kohl. Kohl’s provides traditional products such as furniture, clothing, electronics, cosmetics, and more. This company is the largest department store in the U.S. with 1158 locations. It also has more than 85000 employees in 49 states. This company generated approximately $20 billion in revenue in 2019. Kohl’s benefits mainly lie in the affordability of its products because their prices focus on the average to slightly above average customer. This is made possible by Kohl's avoidance of high-class and expensive brands while also avoiding extremely cheap products as well (Swenson, 2019, p. 15).

Nordstrom

John W. Nordstrom founded this U.S company in 1901 as a footwear store. It grew over time to become among the most successful retailers for apparel, clothes, etc. As a department chain store that focuses on luxury products, Nordstrom has more than 74000 employees and 117 stores.

Nordstrom offers many expensive high-quality products but what really sets them apart is how they satisfy their customers. Due to their great customer treatment, they have gained numerous 5-star reviews online and also customer loyalty. However, this company provides expensive prices for their clothing and services. On the other hand, Macy's Inc. provides premium designer brands and regular house brands and since it is also a full department store, it has assets that act as sources of revenue as well (Tokosh, 2019, p. 419).

Gap to be filled by an expansion of Macy’s E-commerce

Online shopping is critical to attracting new customers because anyone can look at the products online, order them, and have them delivered at their convenience (Mehmood & Najmi, 2017, p. 23). Also, Macy's could encourage them to pick up some of their online orders at the closest physical stores to cut on the shipping costs and boost incremental sales when customers purchase additional items when they come to pick up their online orders. Additionally, Macy's can use different social media platforms such as Pinterest to influence its merchandising and enable customers to view the images and reviews of their products on large screens. The main aim of e-commerce will be to address the increasing customer demand in an era where people no longer want to visit physical stores. It may take a while for Macy’s to be profitable but it is worth establishing a strong customer base in the meantime especially in the face of so much rivalry. The remaining stores after disposal of some can be used for other purposes such as hair salons, spas, photography, etc. Doing away with stores is critical to the reduction of corporate tax and this will increase Macy's profitability in the long term.

References

Ikeler, P. (2016). 3. The Not-So-Hidden Abode: Work Organization at Macy’s and Target. In Hard Sell (pp. 52-84). Cornell University Press.

Mehmood, S. M., & Najmi, A. (2017). Understanding the impact of service convenience on customer satisfaction in home delivery: Evidence from Pakistan. International Journal of Electronic Customer Relationship Management, 11(1), 23-43.

Redd, N. J., & Vickerie, L. S. (2017). The rise and fall of brick and mortar retail: The impact of emerging technologies and executive choices on business failure. J. Int'l Bus. & L., 17, 127.

Swenson, E. (2019). Financial Analysis on Macy's, Inc.

Tokosh, J. (2019). Is the Macy's in my mall going to close? Uncovering the factors associated with the closures of Macy's, Sears, and JC Penney stores. Growth and Change, 50(1), 403-423.