In 1858, Rowland Hussey Macy began his journey to success. Who knew that a small dry goods store on the corner of 14th street and 6th avenue in NYC will become one of the world’s biggest retailers.
Throughout his years, Macy’s had many failed retail business projects which was his fuel to success. Macy’s was adamant that he will be successful. Finally, at age 36 all his hard work paid off when R.H. Macy and Co. was born. He chose the red star as the company symbol to represent his success. The first day of opening they had only about $11 in sales but by the end of that year they had an estimate of $87,000 in sales. By 1877 Macy’s became a fully established departments store. In 1902 they moved to Herald Square, where Macy’s is located till this day because they outgrow their original location. By 2005 they had 450 locations, in 2006 730 stores, and finally in April of 2017 estimated 670 stores in almost every state across the U.S.
In December of 1985 Macy’s Inc was created which was an Omni channel retail company, which is also a subdivision of Macy’s, manages many stores, websites and mobile applications under different brands owned by Macy’s such as Macy’s and Bloomingdales. The Omni channel company sells a lot of different merchandise from clothing, to cosmetics to household items. Another subdivision of Macy’s is Macy’s systems and technology (MST) which was also created in 1985 by a group named The Sabre Group which was also known as the Federated Systems Group that transformed all Federated affiliates to a general electronic data processing system. MST is well recognized in the retail industry for its high position in technology. It is used on many different levels in Macy’s by providing enhanced performance retail, e-commerce and information systems. In order to fulfill business requirements, MST uses a mixture of wireless, client/server, midrange and mainframe technologies. Macy’s systems are able to adapt to any business changes because of the close connection that MST keeps between retail stores, corporate offices and merchandise vendors. One of the system’s main focus is their e-commerce growth. MST’s scalability allows the e-commerce to expand their market which includes all their online stores and is able to concentrate on their high-volume traffic in order to fulfill customer demand quicker.
Overall Macy’s has many different information systems. One of their main used systems are, MyMacy’s Intranet, POS system, and Insite. MyMacy’s is an intranet, which is the company’s mainframe, that is used by top-level management and executives. This intranet is only able to accessed by the executives at their headquarters and nowhere else. The system is able to perform a vast range of commands and they are able to view daily transactions of their stores. Just like MyMacy’s, Insite is another intranet that is able to accessed in the store not only at the headquarter. This system allows managers in the store to set schedules, see all the clock ins and clock outs of their employees, they are able to view requested time off, deny or accept it and many more. While employees also have access Insite, they don’t have the full access of the managers, employees are able to see their schedule, view their pay, benefits, request time, call out, or anything to do with company news. Macy’s POS system is an RFID POS system that incorporates the in store touchscreens with the Wi-Fi in order to create interactive displays to preview products and their descriptions. The POS system also keeps track of inventory and is able to tell you when something is low and allows you to make orders. It is another great customer service that the store has it since for example of the store stops carrying a certain product, the employee is able to search it on the POS system and order it for the customer to be sent to their door. Another plus is that some customers refuse to shop online and are unable to go to the store, so they are able to call the store and place an order by phone that will get delivered to them right away. For that same reason, back in 2014 Macy’s announced its same day delivery in a couple states which will cost $5 which sometimes you end up paying more for shipping and handling and getting your order 1-2 weeks later.
Over the years many retailers have declined, some including Macy’s due to high demand online shopping, but Macy’s was not going to let that effect it’s business. While many other retailers are still familiarizing and still in the process of converting to an Omni channel. On the other hand, Macy’s has taken the lead in it’s Omni channel strategy creating a tech-enhanced store shopping (Giannopoulos, 2012). Macy’s has made a great investment in technology to create a seamless customer experience and moving along with the demand. They use a wide range of different technology such as working with google to create store-maps for customers, using their mobile devices to pay, and the RFID to keep a better updated and manage their inventory. (Giannopoulos, 2012). According to a statement on risnews.com that Karen Hoguet, Macy’s CFO, mentioned about their success with the Omni channel, “We think the sales potential from this Omni-channel approach is enormous. In addition, overtime, it should enable us to also improve productivity of our inventory, as well as our store square footage. We barely scratched the surface here, and we are very optimistic about the possibilities.” (Giannopoulos, 2012). Some of the ways Macy’s is using technology to enhance customer experience is by expanding their online inventory. Macy’s is almost creating a virtual realty out of it’s business by being able to provide the customer with products to feel and touch while also giving them an endless choice of products through their online inventory. Store-to-door is as I mentioned earlier, a customer will be able to order stuff and have it shipped from the store directly their house, it’s also able to fulfil customer order if the distribution center runs out of a product, they can find a store that has the product and have it shipped out from there. Digital mannequins are another way Macy’s is investing in technology by researching digital mannequins, which are mannequins that are able to be changed throughout the day with different outfits in order to target different styles. Kiosks and product information are already being used in stores. Kiosks are iPad through the whole store that will provide product information instead of a sales rep helping you, the addition to this already in store idea is that the cosmetics department will now offer a “beauty spot” touchscreen that will allow customers to see physical inventory and virtual product details. It will also give the customer an option of setting up an appointment with a live beauty advisor or just use the iPad app. Wi-Fi has been a part of Macy’s since 2013 to create customer engagement by allowing them to use the internet on their own devices.
Macy’s Omni-channel is worth about $28 million dollars and because of it’s high demand it still needs to hire people to do the job. Macy’s is stated to be “the largest Taleo recruiting instances in the world” (Preez, 2015). In a span of an eight to ten-week period, Macy’s hires about 80,000-90,000 new hires, which doesn’t include every person who got interviewed for the job. All of this information was being processed by a 20-year-old system called PeopleSoft which was an on-premises system. The system was able to perform all the of the HR services which included payroll, hire, benefits, compensation, bonuses, etc. and because the amount of information that is being stored, the scale can be an issue. In July of 2017 Macy’s decided to switch over to Oracle, which is a cloud computing service. The switch is intended to create a smooth employee experience when accessing their information such as payroll, bonuses, benefits, etc. It will also help HR managers focus less on administrative tasks and putting full focus on talent development and strategy, in order to enhance the business. Christopher Coy, the director of the conversion said “We want HR business partners to be strategic, we want them engaging with employees, driving culture, driving sales and driving the business.” (Ring, 2016).
All of this used to be done through on-premises systems but because of the amount of information that was coming in, the scale can be an issues, that’s why they converted their HR to Oracle which is a cloud computing service. Not only has the switch to a cloud made everything a lot easier for the HR department it also helped the company save a lot of money. According to a statement on diginomica.com, “We were investing approximately $2-2.5 million of capital every year to incrementally grow those 104 applications. Now I’m not a math major, but that’s not going to work out well. So we decided to shift our thinking to really bet on [Oracle’s] innovation engine.” (Preez, 2015). One of the biggest benefits was the employee emails that get sent out such as emails about company news, benefits, or any other HR issue. For a company that has about 200,000 employees which company-provided emails, the switch to a cloud service was a great idea. Before switch to the cloud, the company spent around $200,000 a year on a center that just sends benefit emails only to about 45,000 employees. As it was mentioned earlier, the cloud is saving the company money in every way possible.
This graph shows the challenges of other retailers that Macy’s was able to overcome by being a lead player when it comes to technology.
In conclusion, Macy’s is one of the first retailers to take lead in the tech world to enhance customer experience in their stores and online. Macy’s tackled technology in every way it can, from it’s intranet for their employees and executives to use to their RFID POS system that allows them to do many things such as ordering and delivering products to customer and making it easier to keep track and manage inventory. They were one of the companies that was able to keep of with the growing of technology and adapt to all the changes that are made and that are being made. One of their biggest benefits was switching to Oracle cloud service which provided scalability in order to keep up with different demands from every direction whether it was employees related or customer related. Even though it was stated on the news and has actually happened of many Macy’s stores closing down and many more will continue to close, I don’t think Macy’s is going anywhere with it’s progress in technology. Who knew many failures will lead to one of the worlds biggest retailers and one of the top retailers when it comes to technology.
References
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