SWOT Analyis of Macy’s | Business Teacher
Macy’s is a retailer dealing in apparel and fashion accessories and has been in existence since 1858. The company has over 857 stores that are spread across the 45 states in the United States.
The company has a strong Omni-channel existence. The retailer uses a multi-channel sales approach or strategy to provide customers with excellent and integrated shopping experience for its customers (Macy’s Inc., 2016). Macy’s Backstage store, Bloomingdale’s outlet, Bluemercury, and online touch-points have made the company to serve its customers better (Singh, 2012). For example, its online platform allows the customers to place orders using smartphones, iPhones or computers. Macy’s Company enjoys a high business credibility and worthiness (Singh, 2012). For example, it has the Better Business Bureau (BBB) accreditation since 1965. This accreditation has made Macy’s to receive an exemplary rating of A+ to F. The company has received this rating because it is committed to good faith when resolving issues relating to customers. Macy’s has a luxury portfolio of products and comprehensive value-for-money (Macy’s Inc., 2016). The company stocks a variety of clothing ranging from star brands like Calvin Klein, Michel Kors and Ralph Lauren among others (Singh, 2012). Since it has a collection of apparel, it has bridged the gap of a brand portfolio that private brands like Charter Club and private label like Holiday Thread. Macy’s has individualised merchandise offering. For example, it utilises location-based technology to offer more personalised recommendation and discounts (Singh, 2012). This helps the company to improve customer involvement and strengthen its promotional and marketing activities.
High employee turnover rate: the company hires more employees during peak seasons, making it incur a lot of cost for attracting, training, developing and retaining employees (Singh, 2012). However, with about 10% of the employees are in the labour union, many employees have no job security, a reason for their exit. The inventory turnover is low: this means that that the storage or inventory holding cost increases, high chances of product obsolescence, and poor customer experience (Macy’s Inc., 2016). Business seasonality: the peak season for the company normally comes during holidays especially in the months of November and December (Singh, 2012). During these months, Macy’s enjoys high sales turnover. However, during low seasons, business sales fluctuate and low inventory turnover is reported.
Emerging opportunities in the global market: the current business activities of Macy’s are concentrated in the U.S. market (Macy’s Inc., 2016). However, there are expansion opportunities in overseas markets such as Dubai, India, and other Asian and Middle East countries (Singh, 2012). The company can increase its market share, customer base, and profitability by exploiting opportunities presented in these markets. E-commerce development: technology has immensely helped ensure that customers enjoy a digital or online platform while transacting with the company (Macy’s Inc., 2016). Macy’s customers, for example, use an online platform to make their purchases, and due to globalisation, the retailer can benefit significantly when its online portals such as bloomingdales.com, bluemercury.com, and macys.com are utilised globally (Singh, 2012).
The company is also privileged to witness a growing market for luxurious items in the beauty industry, and this is an opportunity that Macy’s can benefit from. For example, Macy’s Bluemercury store can offer an opportunity for the company to stock luxury cosmetic products as well as providing Spa services (Singh, 2012). This can give the company a new growth channel.
Stiff competition: this majorly comes from Wal-Mart, Amazon, and Kohl’s companies. This rivalry is also expected to intensify when alliances and consolidation dominate the industry (Singh, 2012). Since the online platform is dominated by Amazon.com and offline segment is taken by Wal-Wart, the company must look into ways of meeting the changing customer preferences and seal its market position (Macy’s Inc., 2016). Discount stores: big industry players like Wal-Mart and Costco offer very competitive prices unlike Macy’s (Singh, 2012). This puts Macy’s in a risky situation during tough economic periods. Customers are likely to walk away from the company when prices are unfavourable for them.