Macy's Is Doing Well With Millennials, But Sales Are Tepid Overall

Although the third quarter proved disappointing, Macy's thinks it can get back on track for the holiday season.
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Eliza Brooke
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Although the third quarter proved disappointing, Macy's thinks it can get back on track for the holiday season.
Macy's, dressed and ready for the holidays. Photo: Jeff Schear/Getty Images

Macy's, dressed and ready for the holidays. Photo: Jeff Schear/Getty Images

As Macy's heads into the retail battle known as the holiday season, the company reported on Tuesday morning that sales for the third quarter of the year dropped slightly relative to the year prior, from $6.276 billion to $6.195 billion. The overall number of transactions was down, execs said, as were units per transaction.

While back-to-school suffered in the third quarter, which ended November 1, the company did some of its strongest business in handbags, fragrances, activewear and the millennial category, which has been outperforming women's overall. To that targeting-the-cellular-youth end, Macy's launched a new app in September called "Macy's Image Search," a fun bit of technology that lets the user take a photo of a clothing item and uses image recognition to pull up either an exact match or similar products. 

Although Macy's execs acknowledged that the results were disappointing — overall decreases in consumer spending and warmer fall temperatures were factors — they do, at least, feel confident that the company will improve on a year-over-year basis in the fourth quarter, which was weak in 2013. 

Among its various strategies for holiday, Macy's is focusing on curating store selection more tightly on a location-by-location basis. What does that mean? Pushing woven shirts in hot climates and sweaters where it's cold, for instance, and playing more to regional tastes in colors.

Macy's has also been putting a lot of thought into its omnichannel strategy, including a "Buy Online Pickup in Store" program set up in all of its Macy's and Bloomingdale's locations, and rolling out same-day delivery to a number of its major markets. As company execs pointed out, this is one instance when the department stores' massive footprints are actually a bonus, since they will effectively be acting as fulfillment centers for in-store pickups. With luck, and a decent amount of marketing, these initiatives could drive last-minute shoppers to Macy's. That's the hope, at least.

Of course, we'd be remiss not to mention that Macy's (along with Target, Sears and Kohl's) will be kicking off the Black Friday festivities by opening at 6 p.m. on Thanksgiving Day, a full two hours than it did last year. Get 'em early, get 'em often.