{"id":16650,"date":"2016-11-17T22:57:20","date_gmt":"2016-11-18T03:57:20","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/how-macys-and-technology-fit-well-together\/"},"modified":"2016-11-18T16:24:38","modified_gmt":"2016-11-18T21:24:38","slug":"how-macys-and-technology-fit-well-together","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/how-macys-and-technology-fit-well-together\/","title":{"rendered":"How Macy\u2019s and Technology \u201cFit\u201d Well Together"},"content":{"rendered":"<p style=\"text-align: center\"><em>\u201cRetail is a dynamic business that requires continuous reinvention\u201d \u2013 Terry Lundgren, CEO of Macy\u2019s<\/em><\/p>\n<p>Macy\u2019s, the 15<sup>th<\/sup> largest retailer in the United States with just under 800 stores nationwide, is being forced to rethink about the ways customers shop.\u00a0 Open for more than 150 years, Macy\u2019s is under intense pressure from a growing number of internet retailers such as Amazon, and is facing declining financial performance and lower inventory turnover [1].\u00a0 The ease of the online shopping experience, speedier and low-cost\/free shipping alternatives, and free return offerings have shoppers gravitating away from the in-store shopping experience [2].\u00a0 To combat these headwinds, Macy\u2019s is reinventing itself by exploring alternatives to the traditional retail experience and introducing new technology and innovation in their brick-and-mortar stores.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" src=\"http:\/\/investorplace.com\/wp-content\/uploads\/2016\/05\/Department-stores-AMZN.jpg\" width=\"603\" height=\"384\" \/><\/p>\n<p style=\"text-align: center\"><iframe loading=\"lazy\" title=\"How Hointer brings e-commerce into physical stores - Dx3 2014\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/9sTolgvjHps?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p style=\"text-align: center\"><strong>THE MANHATTAN BEACH PILOT<\/strong><\/p>\n<p>Macy\u2019s Manhattan Beach pilot is marked by its new omni-channel business model, which aims to offer the customer a convenient shopping experience based on the seamless and integrated use of multiple channels. This pilot has prompted Macy\u2019s to partner with Hointer, a technology consultancy, to test the introduction of digital technology to Macy\u2019s stores.\u00a0 Together, the companies are enhancing the shopping experience by integrating technology into stores thereby \u201cconnecting with customers in a new way\u201d [3].<\/p>\n<p>The pilot, launched in 2015 at Macy\u2019s Manhattan Beach, California store, turns the Macy\u2019s salesfloor into a showroom. First, the customer uses her mobile device to scan the items she wishes to try on.\u00a0 After she enters the fitting room, her items are released to her fitting room stall via a chute within 30 seconds.\u00a0 She can use a tablet mounted to the fitting room wall or her Macy\u2019s app to request additional sizes or items. In addition, customers receive personalized recommendations based on data from the items they have scanned.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" src=\"http:\/\/www.hashslush.com\/wp-content\/uploads\/2013\/12\/Fitting-Room-at-Hointer-650x400.jpg\" alt=\"Image result for hointer\" width=\"465\" height=\"286\" \/><\/p>\n<p style=\"text-align: center\"><a href=\"https:\/\/www.youtube.com\/watch?v=7zm7gFOjycE\">https:\/\/www.youtube.com\/watch?v=7zm7gFOjycE<\/a><\/p>\n<p>Not only does this pilot provide for a unique, individualized experience, but this operating model\u00a0allows the customer to try on <strong>30-50 items in a few minutes,<\/strong> minimizes staff costs, and mitigates the risk of returns [4].\u00a0 Clothing stores typically allot 20% of their square footage towards fitting rooms, and 80% towards displaying merchandise but this pilot requires less floor space to display products [5].\u00a0 There is one of every item on display, rather than every size and color [3].\u00a0 In effect, products are easily visible, and the often time-consuming and frustrating hunt for certain variations of a product is eliminated. In addition, this allows store associates to focus on serving the customer instead of re-folding or re-hanging items on displays.\u00a0 This new technology also offers the customer a more enjoyable shopping experience by eliminating the hassle of transporting items to the fitting room and the need to exit the fitting room to find another size (an act that often leads to abandoned purchases) [6].<\/p>\n<p style=\"text-align: center\"><strong>THE ROAD AHEAD<\/strong><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" src=\"http:\/\/hointerwebsite.s3-website-us-west-2.amazonaws.com\/5amDayOne.jpg\" width=\"636\" height=\"358\" \/><\/p>\n<p>Macy\u2019s has started testing this pilot with swimwear, but has proposed expanding this technology to more stores and categories in the future, earmarking $200 for each fitting room.\u00a0 Given that <strong>67% of customers who try clothing on in fitting rooms end up making a purchase<\/strong>, it\u2019s hardly surprising that Macy\u2019s is expending time and energy in this area of the shopping experience [5]. While Macy\u2019s has not disclosed the financial performance of this test, the rationale behind the model is that the ease of trying items on would correlate with increasing sales.\u00a0 Macy\u2019s can increase customer basket size by suggesting complementary items or items that fit with the customer\u2019s fashion preferences through personalized suggestions to customers in its fitting rooms.\u00a0 Retailer Rebecca Minkoff launched similar fitting room pilots in 2015 and <strong>sold triple the amount of apparel <\/strong>in stores implementing the new model [7].<\/p>\n<p>Macy\u2019s must differentiate its shopping experience by investing in new technologies to have a \u201clong-lasting effect on developing greater customer loyalty and distinguishing the store from its competition\u201d [8].\u00a0 However, Macy\u2019s should not focus exclusively on digital transformation within its store fitting rooms because the company needs to appeal to the differing shopping behaviors of all demographics.\u00a0 For example, men tend to buy items without trying them on in a store, so are less prone to use fitting rooms [5].\u00a0 In addition, the trend of millennials performing online research before buying should prompt Macy\u2019s to consider the importance of website and mobile enhancements.\u00a0 Though the in-store fitting room experience is important, Macy\u2019s could consider offering digital fitting rooms.\u00a0 Other companies have succeeded with this concept &#8211; \u00a0Zeekit, a virtual fitting room tool, allows users to wrap clothing items around 2-D images of themselves [9].\u00a0 Adapting to the new digital and online shopping landscape is vital for Macy\u2019s success, and the Manhattan Beach pilot is a step in the right direction; however, if Macy\u2019s is going to reverse its downward spiral, it cannot ignore the opportunities to transform other areas of the customer purchase journey (e.g. marketing, store displays, and check-out).<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/pmcwwd.files.wordpress.com\/2016\/09\/screens11.png\" alt=\"Image result for zeekit\" width=\"670\" height=\"502\" \/><\/p>\n<p>Word count: 794 words<\/p>\n<p><strong>Sources:<\/strong><\/p>\n<p>[1] <em>Macy&#8217;s, Inc.: Retailing &#8211; Company Profile, SWOT &amp; Financial Analysis<\/em>2016, Progressive Digital Media, Basingstoke.<\/p>\n<p>[2] Kapner, S. 2016,\u00a0<em>Amazon Struts Its Fashion Sense, Challenging Traditional Stores; The Internet retailer is making headway against traditional sellers by attracting a crowd that had rebuffed its utilitarian approaches<\/em>, New York, N.Y.<\/p>\n<p>[3] Schrank, J. 2014, &#8220;Automated Shopping&#8221;,\u00a0<em>Design:Retail,\u00a0<\/em>vol. 26, no. 3, pp. 96-101.<\/p>\n<p>[4] Soper, Spencer, Rupp, Lindsey, and Brandt, Nadja, \u201cMacy\u2019s Tests Chutes, Tablets in Dressing Rooms to Repel Amazon,\u201d August 18, 2015, <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2015-08-18\/macy-s-tests-chutes-tablets-in-dressing-rooms-to-repel-amazon\">https:\/\/www.bloomberg.com\/news\/articles\/2015-08-18\/macy-s-tests-chutes-tablets-in-dressing-rooms-to-repel-amazon<\/a>, accessed November 2016.<\/p>\n<p>[5] Holmes, E., &amp; Smith, R. A. (2011, Apr 06). Dressing up the fitting room &#8212; stores try to beautify spaces, &#8216;seduce&#8217; shoppers to buy more with better lighting, mirrors, design.<em>\u00a0<\/em><em>Wall Street Journal<\/em>\u00a0Retrieved from <a href=\"http:\/\/search.proquest.com.ezp-prod1.hul.harvard.edu\/docview\/860169506?accountid=11311\">http:\/\/search.proquest.com.ezp-prod1.hul.harvard.edu\/docview\/860169506?accountid=11311<\/a><\/p>\n<p>[6] Medina, M. (2014, Apr 15). Minding the millennials.<em>\u00a0<\/em><em>WWD,\u00a0207<\/em>, 8. Retrieved from <a href=\"http:\/\/search.proquest.com.ezp-prod1.hul.harvard.edu\/docview\/1636640498?accountid=11311\">http:\/\/search.proquest.com.ezp-prod1.hul.harvard.edu\/docview\/1636640498?accountid=11311<\/a><\/p>\n<p>[7] Dishman, Lydia, \u201cInside LA\u2019s New, Futuristic, Store- Magic Mirrors Included,\u201d Fortune, October 8, 2015, <a href=\"http:\/\/fortune.com\/2015\/10\/08\/rebecca-minkoff-technology\/\">http:\/\/fortune.com\/2015\/10\/08\/rebecca-minkoff-technology\/<\/a>, accessed November 2016.<\/p>\n<p>[8] Loeb, Walter, \u201cMacy\u2019s Makes Rapid Advancement in Technology,\u201d Forbes, July 22, 2016, \u00a0\u00a0<a href=\"http:\/\/www.forbes.com\/sites\/walterloeb\/2016\/07\/22\/macys-rapid-advances-in-technology\/#ac6ec1cd2967\">http:\/\/www.forbes.com\/sites\/walterloeb\/2016\/07\/22\/macys-rapid-advances-in-technology\/#ac6ec1cd2967<\/a>, accessed November 2016.<\/p>\n<p>[9] Doupnik, Elizabeth, \u201cZeekit Releases Next Generation of Virtual Fitting Room, New Visualization Features,\u201d Women\u2019s Wear Daily, September 15, 2016, <a href=\"http:\/\/wwd.com.ezp-prod1.hul.harvard.edu\/business-news\/technology\/zeekit-virtual-closet-app-10546500\/\">http:\/\/wwd.com.ezp-prod1.hul.harvard.edu\/business-news\/technology\/zeekit-virtual-closet-app-10546500\/<\/a>, accessed November 2016.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>How one of the largest retailers gets \u201csmart\u201d about customer shopping experiences.<\/p>\n","protected":false},"author":1873,"featured_media":16798,"comment_status":"open","ping_status":"closed","template":"","categories":[2050,788,2368,2367,2170,16,335,55],"class_list":["post-16650","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-app","category-digital","category-fitting-room","category-hointer","category-macys","category-retail","category-smartphone","category-technology"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/digitization-challenge-2016\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - 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