Dive Brief:
- Macy’s saw 5% year-over-year NPS growth at a collection of its high-performing stores, dubbed First 50, CEO Tony Spring said on a Q1 2024 earnings call Tuesday. The retailer is paying close attention to the stores in an effort to identify how the investments impact various growth metrics.
- Updates to First 50 stores include changes to staffing, focusing on key departments and the checkout areas. The company also tasked workers with making product displays look “crisp” and “compelling,” Spring said.
- Macy’s will continue exploring opportunities at its First 50 locations. “We're still experimenting,” Adrian Mitchell, COO and CFO of Macy’s, said during the call. “There are still more changes coming into the store based on what our customers expect of us.”
Dive Insight:
The right combination of “people, product, presentation and experience” is responsible for positive customer response at Macy’s First 50 stores, Spring said.
Macy’s is using traffic and sales data, broken down by the day and the hour, to ensure the right number of workers are in a given department at the right time, according to Spring.
“Our teams are collaborating to make quick and strategic decisions, and we're making investments to create an improved experience that will better serve our customer and sets the foundation for our future,” Spring said during the call.
Macy’s is also leaning on experiences, like personal styling sessions and fashion shows, to drive traffic and sales, according to Spring.
These early efforts have helped First 50 locations achieve NPS scores 2.5% higher than all other Macy’s stores, Spring said.
However, Macy’s has more work ahead as it pursues a return to sales growth. The retailer is closing 150 underperforming stores over the next three years as part of an effort to cut costs.
The First 50 stores achieved 3.4% year-over-year comparable sales growth during Q1. The other Macy’s stores not slated for closure, which didn’t receive the same investments in experience, saw comparable sales fall 1.3% during the quarter.
Macy’s is balancing CX investments against other operating expenses, Mitchell said. Inventory control and markdowns are also top of mind for the company.
“We're very much focused on delivering on our customer experience,” Mitchell said. “But we also recognize that the customer is under pressure, the macro environment remains uncertain and that we can only control what we can control.”
