Despite the rise of people shopping online at sites like Amazon on their tablets and phones, Terry J. Lundgren, the CEO and Chairman of Macy’s believes that the in-store shopping experience isn’t dead.
In an interview on the CNBC program On the Money,” Lundgren noted that the death of department stores is a “grossly exaggerated statement.”
To make his point, he used the example of when Macy’s flagship store in Manhattan’s Hearld Square opened at 6 p.m. on Thanksgiving evening, a time many like to spend with their families at home.
“If you saw the traffic when we opened the doors at 6 pm, flowing into stores like Macy’s Herald Square, you’d say people definitely want to shop on that night and in a store like Macy’s,” said Lundgren, who noted that many people were buying products at the chain’s over 700 stores across the country.
Despite this “great start” according to Lundgren, he recognizes that consumers are shopping much differently than they did even as recent as five years ago. He claimed that Macys.com is the “seventh-largest internet company retailer in America,” and that the rise of online shopping has greatly benefited the chain’s website.
“Consumers are starting the journey with their phone, doing their research,” said Lundgren. “Then they come into the store to try on the clothes, or touch that handbag, or have makeup applied.”
In keeping in with the tradition of Cyber Monday, the Cincinnati-based Macy’s offered it’s customers many discounted deals according to the website 24/7 Wall St.These included 60 percent off for women’s coats and dresses, as well as 60 percent off men’s dress shirts and ties. Even jewelry such as diamond stud earrings and 14k gold chains were discounted to as much as 65 percent off, and customers are were offered free shopping with a purchase of $25 or more. This year, the National Retail Foundation expected 121 million consumers to shop online, compared to 127 million consumers last year.
According to CBS Money Watch, the chain has been faced with their stock plunging more than nine percent since August, as well as an announced plan to close up to 40 under-performing stores in September. Despite this, the chain had planned to open the first four Macy’s Backstage stores in the fall. These stores would sell discounted wares, similar to the discount stores operated by Nordstrom and Saks Fifth Avenue.
One of the more unusual problems facing the chain and other retailers was the unseasonably warm weather this November, which had customers delaying their purchases of winter jackets and other related products.
“I think it’s been now documented that November has been warmest November in the Northeast in 251 years,” said Lundgren, who warned that inventory was high and there were likely to be markdowns. “So that’s hard on the cold weather goods that we’re all trying to sell.”
However, according to a Business Insider article, analysts point out a permanent trend of many Americans who would spend more of their money on big-ticket items like electronics and experiences rather than clothes. This in turn would affect department stores like Macy’s, which saw their same-store sales decline for the third quarter in a row this month, along with other chains like Nordstrom.
Lundgren, according to Macy’s official website has been the CEO of the chain since January 2004. He previously served as president and chief merchandising officer. Lundgren first worked with the chain when it was known as Federated Department Stores in 1975 as a trainee with the store Bullock’s and was executive vice president of Neiman Marcus from 1988 to 1994, before returning to Federated Department Stores.
[Photo by Spencer Platt/Getty Images]