Macy’s Launches MOM 3.0

“In many ways, this is a race to remain best-in class—and win with the customer. We fully expect to remain an industry leader and innovator.” – Terry J. Lundgren, Macy’s chairman and CEO Macy’s announced a major restructuring of its merchandising and marketing operations today, as the retailer pushes more aggressively toward a single omnichannel retail business model. The move signals the retailer’s ongoing commitment to keep MOM 3.0 — My Macy’s localization, Omnichannel integration and Magic Selling customer engagement—at the center of its long-term growth strategy. The inception of the MOM initiative began about six years ago.

GROWTH INVESTMENTS PLANNED FOR 2015

Both Macy’s and Bloomingdale’s are restructuring their respective central merchandising and marketing functions so that each retail brand can develop and present assortments seamlessly across channels and provide a single omnichannel customer engagement in all product categories. The aim is to create one unified merchandising and marketing organization—a hybrid of store and online buying—to be better able to move more quickly and nimbly to select merchandise, assort inventories and serve customers, no matter where, when or how they want to shop. The chain hopes that the restructuring will also help it accelerate speed to market, partner more effectively with vendors and become more responsive to the marketplace. Every full-line Macy’s and Bloomingdale’s stores will increase its direct-to-consumer fulfillment capacity as click-and-collect becomes a bigger part of consumer purchasing behavior. Additionally, the company is building a 1.3 million square-foot DTC fulfillment center in Tulsa County, Oklahoma, expected to open in April 2015.

REDEPLOYING STORE AND FIELD RESOURCES

Macy’s is redeploying resources across its store and field organization with the aim to provide greater support for the chain’s MOM strategy. It will be increasing its workforce in some functions and locations, while decreasing in others. In total, the company’s workforce is expected to remain roughly at approximately 175,000 associates. Roughly 2,200 associates will be affected, including the addition of 150 people to its San Francisco digital technology operation. Macy’s also plans to close 14 stores and open two new store (in addition to the seven new stores already planned). These 14 stores represent approximately $130 million in annual revenue, and management expects to capture a portion of these lost revenues from its direct-to-consumer business, as well as from other nearby Macy’s locations. Management is also exploring opportunities for a Macy’s off-price business.