In 2016, companies spent close to $16 billion on digital marketing (Allen, 2016). This impressive amount of money is expected to grow to $23 billion by 2020. Needless to say, the world of digital marketing is growing at a steady pace with every passing day. Companies are being encouraged to increase their budgets where digital marketing is concerned because of its rising popularity. Digital Marketing is defined as “the promotion of products of brands via one or more forms of electronic media and differs from traditional marketing in that it involves the use of channels and methods that enable an organization to analyze marketing campaigns and understand what is working and what isn’t – typically in real time” (SAS). As retail stores such as JC Penney and Macy’s are closing many of their stores and focusing more on their online presence, the digital marketing industry is filled promise of a bright future full of growth. …show more content…
This number of stores makes up close to 15% of all the Macy’s stores across America (Egan, 2016). These statistics prove that the world of online sales is definitely on the rise. An article from Smart Insights stated, “A survey of 200 US retail marketing executives with the power to make budget allocation decisions shows their views on whether digital or offline channels give greater ROI. Over three quarters reported that digital channels gave them better ROI in 2016 than offline channels” (Allen, 2016). Because the world of online is growing rapidly more popular, it has become important for many companies to consider how they are using this tool to their advantage. For those companies who choose to sell their goods online, are their any
Macy’s intended to deliver enhanced shopping experiences to its consumers through dynamic department stores and online sites. In this regard, the company developed a North Star strategy that allows it to improve its sales growth and to develop its existing core activities. The company’s consumer research monitors, analyze and anticipate their needs and wants based on the changing market trends. This allows it to strengthen its customer base and also helps it in identifying new markets and customers. Macy’s also identifies different styles and designs based on various occasions and events that allow it to capture the changing preferences of its customers. The company also celebrates various iconic events to interact with its customers which
Does Macy’s have the right resources and capabilities for their current strategy? Why or why
Being a multi-billion dollar retailer comes with its perks. JCPenney’s dominance over catalog merchandising has now extended into the cyber world at www.jcpenney.com. This website is multi-functional and easy to navigate, but how would JCPenney’s new e-commerce site stack up against its toughest competitor, Kohl’s, on the web? The answer may surprise you. This is an intriguing look at how varied retail comparisons can be. While JCPenney is struggling with sales on the retail floor, Kohl’s continues to exceed expectations in their stores. Online though, it is a completely different story.
Currently majority revenue is generated by store sales but online sales from the stores’ websites are increasing. With US dollar getting weaker, international sales from these US based websites are increasing too. This creates significant positive outlook for the large incumbent players but also acts as a significant barrier of entry for new players.
The beginning rick-and-mortar retail industry dates to as early as the late 1700s. The first department store, Harding, Howell & Co were targeted to “newly affluent middle class women” (A History of the Department Store, n.d.). The first department store to be opened in North America was in 1852 named Marshall Field’s (A History of the Department Store, n.d.). For centuries brick-and-mortar retail stores have grown significantly and have opened millions of stores across the world. They have essentially defined the retail industry and inspired the introduction of e-commerce. Macy’s is one of the largest brick-and-mortar retail stores in the United States and has demonstrated strong market share in the department store industry,
To start off with, in a sense, wholesalers provide a major service to retailers and are crucial to the success of those retailers. One reason that the wholesalers are so important to retailers is that without the wholesalers, retailers would not have an accessible way to get their products. For example, if Macy’s was not connected with a wholesaler, they would not be able to gain products, therefore making it difficult to make a profit. Another reason that the wholesalers are very important is that they give the retailer a reason to mark up the product allowing them to make a profit. For instance, if a retailer purchases a product for $50, they can then mark the product up to $75 to make a $15 profit off of that item. Overall,
“The retail landscape has shifted toward e-commerce, but there are opportunities for department stores to capitalize
From a longer term perspective, online channel will gradually steal share from actual store sales, so this distribution channel could actually be an effective strategy to enter small markets as opening physical store in smaller markets would not be cost effective.
According to the U.S. Department of Commerce, e-commerce or online shopping has increased consistently from the year 2004 to 2014 (Bucchioni, P., Liu, X., & Weidenhamer, D., 2015). Individuals are successful finding items that suit their needs online and Target will benefit by implementing a plan for online shopper to secure some of the cash flow being
The company can improve its channel strategy to enhance its current performance in one way. The company’s website is too reliant in the physical stores. The website has photos of the physical store ostensibly to help customers to connect with it. This idea seems well founded. However, the target market for any company that operates an online shopping system is not local. It transcends geographical boundaries. The company needs to consider how it can make the online shopping experience authentic and complete for customers who may never visit any of its physical stores. A website makes a company a global player. In this regard, the company needs to expand its channel strategy to take into account an expanded potential market. This shift in strategy will increase the sales the company makes.
At the beginning of this year Macy’s planned to close 100 stores of their 675 locations “to focus capital and talent on better-performing locations in prime markets” (The Motley Fool). To offset this change for their customers they want to focus on keeping their business via the Macy’s app and website. These store closings though are not enough to keep Macy’s a viable competitor in the current retail world. Because of the issues that we have identified, we have collaborated to provide recommendations for Macy’s to help improve their business in relation to their
According to the 2015 Macy’s Annual Report and Form 10-K, Macy’s saw a decline in net sales from $28.1 billion in 2014 to $27.08 billion (3.65%) in 2015 which decreased its net income from $1,526 billion to $1,072 billion (p. 14). There are many risk factors that affect profitability of the company such as: competition from other physical and online retailers, consumer preferences and consumer spending, unfavorable economic and political conditions, seasonal nature of business, extreme weather conditions, regional or global disasters or pandemics, changes in interest rates, increases in costs of employee benefits, inability to access capital markets, ability to attract and retain quality employees, dependency on supply networks, product safety concerns, success of advertising and marketing efforts, disruptions to computer systems, and legal and regulatory changes. Macy’s requires new approaches to affect consumer experience and draw them away from other retailers through innovations and more exclusive merchandise. Macy’s introduced 40,000 Internet-compatible terminals that allow shoppers to search for merchandise while in store, initiated digital marketing efforts such as a 360-degree view of customer shopping habits, and developed digital mannequin applications and virtual fitting rooms. Most importantly, our group suggests that Macy’s needs to concentrate on the development of mobile applications and other digital initiatives which result in changes to operations management, process analysis, capacity planning, project and quality management, inventory management, lean systems, demand forecasting, and consumer preferences forecasting. Productivity should be measured on the regular basis using best practices and compared against sales goals. Gantt chart can be used for project scheduling and performance monitoring. The
The Internet is currently the third most shopped channel; brands are pushed to keep up with the trend of building an online shopping option for their consumers and this is evident through the increase in retailers offering online options for their consumers (Valerio). With solely digital stores like Net-A-Porter, Amazon and eBay, competition among digital stores and physical stores are tight. Retailers are pushed to keep up with the rise of digital shopping whether they want to or not. There are several retail implications with the rise of digital shopping, retailers are turning to multi-channel retai...
Online retail and shopping sales has been growing consistently every year, not just in the US but worldwide. Not only does online shopping give customers more convenience, more variety, and more discreetness but it also gives customers better prices. While it is quite true that Wal-Mart has product variety and cheap prices – things customers want – the physical stores do not really give the convenience and discreteness that online retail and shopping does.
Digital marketers must keep up-to-date with the consumers preference, trends and needs, in order to meet these needs and to be able to remain competitive in the market . The connectivity created by digital media leads to enhanced product benefits such as online games and applications (Pride & Ferell, 2014). However, the use of the internet to sell products could be a disadvantage to the business since the goods being sold are intangible, the consumer could research and find reviews describing a product as low quality which could result in sale losses (Brand Driven Digital, 2013).