June 15, 2020
Macy’s Numbers Signal a Department Store Comeback
Not long ago, most retail market experts were forecasting the end of malls and their anchor department stores. More and more big brands were closing locations or going out of business altogether. Then came COVID-19 closures, and many said those empty shopping centers were the last straw. But, something interesting and, some have said, unexpected has happened. Macy’s is putting up better-than-expected numbers after reopening since COVID-19 temporarily closed its doors.
While the company expected to see at least a one-billion-dollar operating loss in Q1, customers have come flocking back, which has led Macy’s to drop its loss projections well under a billion. Still not great, but much less bad news in this environment is still good news.
That news caused the company’s stock price to creep up nearly 10%, leading to a positive statement from CEO Jeff Gennette: “Our strong digital business sales trend continued throughout May, and it is encouraging to see that, as we reopen a store, the digital business in that geography continues to be strong… (and) reopened stores are performing better than anticipated…”
This is a surprising trend given the negative expectations when the company – and many of its longtime competitors – were forced to close their doors back in March, due to the fast-spreading coronavirus. With so many brick-and-mortar stores closing and the economic outlook uncertain at best, sales plummeted. Now, though, the company says it has “sufficient liquidity” to take care of the needs of the business, both operations and ordering new inventory.
It appears even new COVID-19-inspired safety precautions have not dampened customer enthusiasm for the reopened stores. They are coming, tolerating social distancing rules and hand sanitizer at the jewelry counters, and once again enjoying the Macy’s shopping experience.
The question, now, is how can the company build on that unexpected momentum, both in physical stores and online? Brand communicators need to tap into that consumer enthusiasm, find out where it’s coming from and create new ways to inspire it, so this uptick is sustainable. After months of quarantine and isolation, many people are just happy to get out and do something fun again. If Macy’s can deliver the level of customer service that made the brand a national icon, the company will have a good foundation on which to build for the future.
That means giving customers a reason to keep coming back, to renew their consumer loyalty to the brand, at brick-and-mortar shops and online. This is where previously cultivated consumer relationships have a chance to shine. Macy’s communications teams should know their audience, know what they’re looking for. Now, it’s time to let them know they’re back and ready to deliver the products and service that brought customers in the first place.