Macy’s has 783 stores in the United States, making them one of the largest department store chains in the country. It started its journey by providing its customers with high-quality products and exceptional customer service and still does the same.
In its 165 years of journey, the company has gone through two world wars, many pandemics, and thousands of issues and is still standing. In this Macy’s swot analysis, we will learn more about the company’s current situation.
Macy’s: Company Overview
| Company | Macy’s |
| Industry | Retail |
| Founded | 28 October, 1858 |
| Founder | Rowland Hussey Macy |
| Chairman & CEO | Jeff Gennette |
| Headquarter | New York City, U.S. |
| No. of Employees | 75,711+ |
| Annual Revenue | $25.71 billion (FY 2022) |
| Website | macys.com |
Macy’s history goes back to the nineteenth century, when the company was founded by Rowland Hussey Macy in 1858 with only one store. More than 150 years later, Macy’s operates over 508 stores in the United States, Puerto Rico, and Guam, as well as an online store, and the company’s flagship store is located in Herald Square in Manhattan, New York City.
In 2022, Macy’s reported total revenue of approximately $$25.292B and employed over 88,857 people. The company focuses on providing a wide range of merchandise, including clothing, accessories, cosmetics, home goods, and furniture.
Product & Services of Macy’s
Apparel And Accessories | Cosmetics | Home Furnishings | Other Consumer Goods
Macy’s Competitors
Kohl’s | JCPenney | Nordstrom | Gap | Belk | Target | Walmart | Dillard’s | TJ Maxx | Burlington | Ross Stores Inc. | Stein Mart | Saks Fifth Avenue | Lord & Taylor | Neiman Marcus | Bloomingdale’s
Did You Know?
Macy’s is one of the largest consumers of helium in the world, second only to the US government. It is used by Macy’s to inflate the balloons, around 400,000 cubic feet, for its famous annual Thanksgiving Day Parade in New York City.
Strengths – Macy’s SWOT Analysis
Wide Product Range: Macy’s offers a diverse range of products, including clothing, accessories, cosmetics, home goods, and furniture, which allows the company to appeal to a broad customer base and attract customers with diverse needs and preferences.
Positive CRM: Modern companies are built on customers and fulfilling their demands. In this case, Macy’s is known for its high level of customer service. The company has a customer-focused approach and offers various services to enhance the customer experience, such as free shipping, easy returns, and personal shopping appointments.
Steady Cashflow: The company has a solid financial position, a strong balance sheet, healthy cash flow, and a history of generating profits. As per the data, in 2022, the total revenue was $24.58B, and the net profit margin stood at 4.82%, which was around the same for the last few years, indicating healthy and steady cash flow and profitability.
Successful Branding: Macy’s is known for its successful branding and marketing efforts can be seen in its iconic Thanksgiving Day Parade, which has become a cultural event in the USA. Additionally, the company’s “My Stylist” personal shopping service has helped to differentiate Macy’s from its competitors and provide a unique and personalized shopping experience.
Excellent Positioning: Behind building a loyal customer base by offering a wide range of merchandise, high-quality products, and exceptional customer service, it has the perfect positioning strategy as a household brand. Besides, the company was ranked 144th in the Fortune 500 list in 2022, indicating its popularity.
Weaknesses – Macy’s SWOT Analysis
Single Market Dependency: According to data, around 35% of the revenue comes from the USA market alone, even though they are an international brand with a presence in 91 countries. As a result, the company’s revenue is highly dependent on the USA market, and product designs are also USA-cultured, which makes it difficult for the company to compete with global retailers and tap into new markets.
Complex Company Structure: The company has multiple divisions and brands, such as Macy’s, Bloomingdale’s, and Bluemercury, which can make it challenging to manage and coordinate operations. One of the primary reasons they couldn’t successfully and effectively execute the Polaris plan was poor management structure.
High Employee Turnover: According to data, the company’s employee turnover rate is around 3.726%, higher than the retail industry average (3.1%). Behind this incident are multiple reasons, such as low pay, lack of career growth opportunities, and a challenging work environment.
Unsuccessful Execution: Macy’s opened stores in underperforming malls and expanded its footprint beyond financially viable. As a result, the company closed more than 100 stores recently, and its stock price has fallen by more than 50% in the last seven years. Besides, Macy’s plan to expand into Abu Dhabi ended for many reasons.
Poor Quality Control: The company has recently faced criticism for poor quality control. Three years back, the company was forced to recall a line of ceramic mugs due to lead contamination. In 2020, it faced backlash for selling a “super-absorbent” towel that shed fibers and disintegrated after washing. These incidents have raised concerns about Macy’s quality control processes.
Opportunities – Macy’s SWOT Analysis
Market Expansion: By opening new stores in locations where it does not currently have a strong presence, Macy’s has an opportunity to expand its market locally and globally. The company recently opened a new store in Abu Dhabi, United Arab Emirates, and plans to open additional stores in international markets and smaller-sized stores in many places.
Sustainable Offerings: Every industry is adapting to the new trend of making everything eco-friendly and offering consumers products with sustainable materials. Macy’s also committed to creating a more sustainable future through it’s operations.
Utilizing E-Commerce: Macy’s could expand its e-commerce presence in international markets as online shopping grows globally. In 2022, the company’s e-commerce sales increased by 12% compared to the previous year. Along with all these, the company also invested in improving its website and mobile app, offering customers a seamless shopping experience.
Diversify Product Lines: The company can diversify its product lines and expand into new categories to appeal to a broader range of customers. As mentioned in the previous point, the company could expand its selection of sustainable and eco-friendly products and other demandable categories to meet the growing demand for environmentally friendly options.
Strategic Merger & Acquisitions: Macy’s has been involved in several mergers and acquisitions since its inception. They started by acquiring the department store chain May Department Stores in 2005. And after that, they acquired three more companies, and recently, Macy’s will acquire Bluemercury soon.
Threats – Macy’s SWOT Analysis
High Competition: Macy’s faces increased competition from other department store chains and e-commerce retailers. Amazon and Walmart have been expanding their fashion offerings, and Target has gained market share in the apparel category. Additionally, fast-fashion retailers such as Zara and H&M have been gaining popularity among younger consumers, resulting in sales declining over the past few years.
Changing Consumer Behavior: People always want new things, and companies must keep up and adapt to consumer behaviors, and that’s the norm. But, for brands like Macy’s, it is getting difficult to keep up, and retail stores’ sales are in decline. Besides, the prediction shows that because of the change in consumer behavior, sales might decline more in 2023.
Declining Foot Traffic: Since Covid-19, foot traffic in retail stores has declined and dropped almost 63% in the last three years. As most of the revenue of Macy’s comes from their physical stores, the sales have dropped significantly and influenced the overall revenue because of this particular reason, and it will continue to do so.
Economic Influence: Macy’s has faced challenges due to economic downturns, including inflation and recessions, as 2022 has been quite a year, and 2023 is a strong possibility for the recession, and it will hit the retail and department store industry. The company must also navigate rising inflation, leading to higher materials and shipping costs.
Labor Issues: Macy’s has faced labor issues in recent years, including concerns over wages and working conditions for its employees. Three years back, the company faced a class-action lawsuit from employees who claimed they were not paid for time spent undergoing security checks.
[Bonus Infographic] SWOT Analysis of Macy’s
Recommendations for Macy’s
Macy’s has come a long way in a short time with many ups and downs. And to survive further, they must prioritize what they should do.
- As e-commerce continues to grow, Macy’s needs to prioritize its online shopping experience, which should be its top priority.
- Consumers are increasingly interested in sustainability, and Macy’s can appeal to this growing trend by prioritizing sustainable practices.
- They should consider expanding their product offerings by partnering with new and innovative brands.
- Expanding into new markets and acquiring new businesses in another way to step ahead of the competitors.
Frequently Asked Questions (FAQs)
Is Macy’s a US Brand?
Yes, Macy's is a US brand.
What is the Largest Us Department Store?
Macy's Herald Square is the largest US department store.
Final Words on Macy’s SWOT Analysis
Macy’s is a well-known and established department store chain in the United States, offering a wide range of in-store and online merchandise. While the company has faced labor issues, high competition, economic downturns, and lawsuits, it is a popular shopping destination for many Americans, with a loyal customer base and strong brand recognition. Macy’s strengths, such as its product variety, excellent customer service, and successful positioning and branding, continue to attract customers and drive the company’s success.
References
- Wikipedia contributors. (n.d.). Macy’s. Wikipedia.
- Repko, M. (2023, March 2). Macy’s shares jump after holiday-quarter profit tops expectations. CNBC.
- Duncan, G. (2018, November 1). Exclusive: Macy’s pulls out of Abu Dhabi’s upcoming Al Maryah Central mall. The National.
- Thomas, L. (2022, July 20). Macy’s speeds up plans to open smaller stores outside of malls. CNBC.
- Berthene, A. (2022, March 1). Macy’s commits to keeping its stores and online business linked. Digital Commerce 360.
- Anyanwu, O. (2015, March 10). Macy’s announces acquisition of Bluemercury. FashionNetwork.
- Meyersohn, N. (2023, March 2). Target, Macy’s and Best Buy see consumers cut back, search for discounts. CNN.
