Digital Transformation Gone Wrong: Did Macy’s Fail?

Amazon will be moving into six floors at 300 Pine Street, a historic epicenter of Seattle retail, home to Macy’s. In fact, Amazon has committed to approximately 1.2 million square feet of new office space in Seattle recently.

Do you remember when Macy’s was Amazon?

There was a time when you could buy underwear, a stereo system, a bed, knives and forks and just about anything at Macy’s. They were in a sense the Amazon of the last few decades. Interestingly, if you look to buy a Macy’s TV today (, you are referred to their jewelry page.


A challenging symbol for retail

Amazon’s expansion is just one of many which symbolizes the passing of the torch from bricks-and-mortar to ecommerce.

I thought Macy’s digitally transformed

Macy’s however was an ecommerce, digital transformation and omnichannel darling. And recently admired for being most-resistant to Amazon. Here are just some of the articles showing this:




Aug 16


Six iconic retailers and their digital transformation journeys

Nov 16

Harvard Business Review

Macy’s: America’s Omnichannel Store

Sep 16


Macy’s Digital Develops Customer-First Culture And Org Structure

Jan 17

Business Insider

Macy’s restructuring to focus on digital

Mar 16

Centric Digital

How Macy’s Implemented a Successful Omnichannel Approach

Wouldn’t it be fair to say this company is the best-in-breed when it comes to retail in the age of Amazon?

When transformation is really just evolution

Omnichannel sales – ensuring call centers, ecommerce and bricks and mortar work together holistically is table stakes these days. We would argue, you can be best-in-class at evolving and still get demolished by the competition.

Transformation implies becoming something new – or at least expanding laterally. In short, making a leap of some kind.

How do you compete with a juggernaut?

We pity companies competing with Amazon because the company can afford to lose money on so many areas while still seeing its stock price accelerate. Its cloud division benefits from the growth of so many startups which it fuels. Its electronics division gives it unprecedented reach into homes and the hands of consumers. Amazon Prime includes an unfathomable amount of media – movies, TV shows, music and books. Finally, it doesn’t have the real estate expense of stores which are rarely filled with customers. It has warehouses quite often at maximum capacity and increasingly becoming automated.

So if retail was supposed to leap – what should it have become?

How could they have transformed?

There are a few areas they could have explored, some still work today.

1)      Media – the market is somewhat depressed thanks to Google. Some sort of media takeover or long-term agreement makes sense. Perhaps local newspapers could have been acquired and subscribers could get special deals on Macy’s goods and shipping. Think of it as Macy’s answer to Amazon Prime. And because quite often the content could be targeted around its stores where there is less competition from other news outlets, it could add significant value for shoppers.

2)      Marketplaces – Macy’s should have launched a marketplace like IndieGoGo or Kickstarter. In the way Shark Tank hosts are able to invest in companies and then use their brand and connections to boost sales, Macy’s could have done this with the best-in-breed of these crowdfunding sites. They could still do this today.

3)      ICO – this is speculative but there is a surge in ICO interest and Macy’s handles a ton of commerce. How about offering Macy’sCoin to people who sign up for their credit card? Why not offer to allow customers to make a return to get 150% of the return price in this coin? There are a lot of things which could be done here but admittedly at high risk. To some degree this is defensive because if Amazon becomes the wallet of the consumer, it will be even tougher for retailers to compete.

4)      Seller’s program – Yet another risky idea and perhaps late but why not try to become the eBay of clothing? Macy’s is well known in the space – they could pull this off by allowing others to sell on their site. Think of it as a virtual factory outlet or a HauteLook competitor which is somewhat unmanaged.

5)      Car-sharing – Why doesn’t Macy’s have a relationship with Uber like it does with parking lots? In other words, retailers are known to validate parking for shoppers, why not do the same with Uber and Lyft? Pay $10 of the ride or more depending on the day of the week.

6)      Apple, Google, Samsung – Pay these companies if needed to open pop-up stores in retail locations. The resulting crowds will offset the cost through ancillary purchases and Macy’s will become a cooler brand. This isn’t really digital transformation but it makes sense as we do our business analysis of the company.

7)      Store brands: Amazon is coming and will dominate with its in-house brands. Retail has to get better at this. Macy’s Alfani brand has improved but they likely need more high-quality brands to compete.

There is no right or wrong way to transform and failure is the most likely outcome of experimentation. If however companies want to survive in markets where competition comes from seemingly everywhere, they need to act fast and pivot as needed to succeed.

Making numerous, logical digital bets is the key to success.

Where do you go to learn how to transform your business in 2018 and beyond? ITEXPO of course. This is the world’s only event focusing on communications, technology, open-source, business intelligence and blockchain to name a few. We hope to see you there February 14-16, 2018 in Fort Lauderdale and yes, you can hire us as a digital transformation consultant. Just sign up for the show first.smiley-embarassed


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