Macy's CEO Thinks Amazon Threat is Overstated

Last year, Wall Street firm Cowen & Co. famously predicted that Macy’s would be be dethroned by Amazon.com as the top apparel retailer in the U.S. But Macy’s CEO Terry Lundgren believes that Macy’s nearly 800 stores offer a huge advantage over Amazon. He noted that shoppers typically order multiple sizes of the same piece of clothing, keep the one that fits, and send the rest back.

According to a Cowen research report published in July, Amazon’s apparel business was on pace to hit $16.34 billion for the year, compared to $22.2 billion for Macy’s in 2015. But as Amazon pushes further into fashion beyond basic clothing, it could get dinged by all that merchandise being sent back.

“They’re going to have an interesting challenge when they start getting all those returns coming back online,” said Lundgren. He added, “The large, large majority of online purchases which are returned in our case come back to stores because they’re so convenient. And so we at least have a shot at selling them something else.”

Despite closing 36 stores this year, Macy’s is now the fourth largest U.S. internet retailer according to eMarketer, with annual online sales in 2015 of about $5 billion. Their position as a leader in the online market is a result of years of multi-billion dollar investments in integrating its stores and its digital business. The ability to handle returns of online orders is key to generating traffic to stores.

Source: Fortune.com

Retail Store and Warehouse Inventory Data Tracking Imperative for Successful E-Commerce Strategy to Deal With Online Returns

A new survey by HRC Advisory indicates that 80% of retailers are not prepared to transform their supply chains for a customer-centric, omnichannel model. 95% of retailers said their biggest issue is mitigating online returns, which can run as high as 30% and are very costly for a retailer.

The high cost of online returns come from returns of online purchases to a store that does not carry that particular item. Also, when returned to a fulfillment center there are costs for freight, damage and a lost opportunity for a replacement sale in the store.

All of the retailers surveyed felt that fully integrating inventory and fulfillment between the online and physical store channels would achieve the most effective customer outcome and the lowest margin risk.  But 52% of them stated they do not have the systems in place to provide the required visibility to inventory in each store.  Only 35% had capabilities for vendor drop-ship and order in store and deliver to the customer. 60% of those retailers have plans to further invest in their e-commerce systems to provide an improved customer experience.

Currently, only half of the retailers were currently able to present customers with accurate inventory information and to fulfill the entire order at the time of the online purchase, and only half could ensure fulfillment from the closest location when an item is available in multiple locations and distribution centers.

Only 25% of retailers are starting initiatives to combine fulfillment from stores and warehouses to manage both channels more cost-effectively.

Vendors who use POS data analytics tools, such as Accelerated Analytics, to help track and manage inventory levels in stores and fulfillment centers can work with their retailer buyers to optimize their working capital investments in inventory and partner with them to create a better customer experience and reduce their lost sales opportunities.

Source: Chain Store Age