Online sales increase 34% at Macy’s in the first quarter

Online sales represented 37% of total sales for Macy’s Inc. in its first quarter of fiscal 2021 ended May 1, compared to 24% of sales in the first quarter of 2019. Online sales for the department store of clothing reached $ 1.7 billion for the quarter, a year of 34%. -year increase from Q1 2020 and a 32% increase from Q1 2019, Macy’s reported.

Macy’s provided comparisons to Q1 2019 in addition to Q1 2020 due to changes in purchasing behavior over the past year that were likely attributable to the pandemic. Macy’s says the Q1 2019 comparison provides a better comparison.

Net sales reached $ 4.71 billion in the first quarter, an increase of 56.0% from $ 3.02 billion in the first quarter of 2020, but a decrease of 14.4% from 5, $ 50 billion in the first quarter of 2019. Due to the pandemic, Macy’s and other department stores struggled last year. Many physical stores have been closed for weeks or months because of the coronavirus. Additionally, once stores reopened, shoppers still avoided interior spaces, such as interior department stores.

Macy’s attributes its good quarter to consumers with more household savings, more socialization outside of consumers’ homes, as well as the U.S. stimulus package and vaccine rollout, CEO Jeff Gennette told investors according to a transcript by SeekingAlpha.

“The stimulus has encouraged more customers to use cash and debit cards instead of credit, and the increased level of immunization has boosted store traffic – all encouraging signs as consumers move towards a fad of post-pandemic life and start spending more on in-person activities, travel and events, ”Gennette said.

The average Macy’s customer spent 10% more in the first quarter of 2021 compared to the first quarter of 2019. Macy’s reported sales in categories fueled by the pandemic have not slowed, such as furniture, sleepwear and clothing. luxury items such as fine jewelry and perfumes. Additionally, categories that did not perform well during the pandemic are now starting to rebound, such as luggage and clothing. In the first quarter of 2021, clothing saw an improvement of 8 percentage points compared to the fourth quarter of 2020.

Macy’s is confident that sales growth will continue throughout the year and is not a short term “pop”. One of the reasons is its new buyers. In the first quarter of 2021, Macy’s acquired 4.6 million new customers, an increase of 23% from the first quarter of 2019, Gennette said. Of these new buyers, 3 million were brand new and 1.6 million were “sleeping customers” that Macy’s has reactivated. What is encouraging is that its newly acquired buyers are making repeat purchases. Of the new customers acquired by Macy’s in 2020, 17% returned for an additional purchase in the first quarter of 2021. Additionally, many of these new customers were online shoppers.

“Our digital channel feels a lot of this activity. 47% of our new customers in the first quarter made their first transaction digitally, an increase of 74% from the first quarter of 2019, ”said Gennette. “And even more encouragingly, 82% of digital orders in the first quarter were from loyal customers, the highest repeat order penetration we’ve seen in a single quarter. “

The addition of the Klarna installment payment button has helped Macy’s acquire customers, especially younger ones, Macy’s says. In October 2020, Macys.com added Klarna to its website, allowing shoppers to break up their purchases into smaller chunks and pay over time. It has since added the button to its other brands, including Bloomingdales and Bluemercury.

“With Klarna, we continue to experience higher spend per visit and increased acquisition of new, younger customers. 45% are under 40, ”said Gennette.

The goal is to convert these new buyers into loyalty program members to ensure they repeat their purchases. Macy’s strives to do this through personalization, such as suggesting custom sizes and colors to buyers, and personalizing the browsing experience based on what Macy’s knows about its buyers, Gennette said without revealing. more.

“Our opportunity is to make sure they’re not one and that they don’t come for one purchase,” Gennette said. “Everything we do with data analytics, everything we do with personalization really helps us make sure that we get it through our loyalty channel. “

Macy’s has several other new digital initiatives that it hopes will continue to drive results, such as providing more specific delivery dates for online orders and launching an enhanced in-app returns experience. Macy’s. He’s also experimenting with live video shopping, in which his in-store associates will host live events “to make online shopping as social and fun as it is in person,” Gennette said.

The brand claims that Macys.com’s conversion rate was 4.0% in the first quarter of 2021, up 9% from last year, and 60% of its sales are via mobile devices. For its other brands in the first quarter of 2021, online sales represent 40% of sales for the Bloomingdales department store and 21% for the Bluemercury cosmetics brand.

Macy’s is no. 13 in the 2021 Digital Commerce 360 ​​Top 1000.

For its first fiscal quarter ended May 1, Macy’s said:

  • Net sales of $ 4.71 billion, an increase of 60.0% from $ 3.02 billion in Q1 2020
  • Net profit of $ 103.0 million vs. a loss of $ 3.581 billion in the first quarter of 2020
  • Comparable store sales increase of 63.9% compared to a decrease of 10.0% in Q1 2019

Percentage changes may not add exactly to dollar figures due to rounding.

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David A. Albanese