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Macy’s Inc.’s CFO on How It Is Modernizing
Adrian Mitchell discusses Macy's new digital marketplace, pricing science and the holiday positioning.
With Macy’s developing an online marketplace, it’s so far, so good
“Marketplace gives us a very different way of thinking about inventory,” said Adrian Mitchell, Macy’s Inc. chief financial officer, speaking at the Morgan Stanley Global Consumer & Retail Conference on Wednesday. “With marketplace, you don’t have inventory liability and presents a whole new generation about how we can think about inventory productivity
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Macy’s launched its marketplace format last September after noticing consumers searching the retailer’s website for products and categories that weren’t there, in particular electronics, toys, pets, home, kids and maternity, Mitchell said
Now, with the digital marketplace, “We are learning and testing new categories without the inventory risk. It’s a huge unlock for us.”
Mitchell said the Macy’s marketplace is attracting younger customers, generating larger baskets in terms of units per order, and that 96 percent of marketplace customers are tapping into “broader Macy’s,” meaning they are shopping what Macy’s has traditionally bought wholesale and listed on its website
“We are hitting on a lot of our key objectives,” Mitchell said. “Right now we are continuing to test and learn. We are adding categories. We are adding skus. It’s a margin driver for us
With the traditional website, “there is much operating expense to move products through our own supply chain. In marketplace you can have slow movers and it’s OK.…It’s really a great opportunity for us to monetize the traffic on our website. With marketplace, we don’t have the inventory liability, but we have the opportunity to have the sales demand. That gives us a lot of flexibility to really lean into the notion of sku productivity
