Macy’s Chairman and CEO Terry Lundgren recently sat down with CNBC’s “On the Money” to discuss the reported “death” of brick-and-mortar shopping.
As online shopping numbers look strong for the Black Friday weekend, brick-and-mortar sales lagged. This shift in holiday spend from offline to online set off a series of rumors around the imminent demise of in-store retail.
However, the retailer’s CEO takes a pithy note from famed American author Mark Twain, telling CNBC that reports of the perceived death of the department store have been “grossly exaggerated.”
He was adamant during the interview that in-store retail was, in fact, alive and well. When referring to the retail chain’s Thanksgiving Day bustle, he stated: “If you saw the traffic when we opened the doors at 6 p.m., 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. So, we feel great about what’s transpired here.”
But despite his enthusiasm for the future of in-store sales at Macy’s, Lundgren admits the way consumers are shopping is “quite different than it was even five years ago.” He goes on to detail the patterns they are seeing at Macy’s: “Consumers are starting the journey with their phone, doing their research,” then they come into the store to “try on the clothes, or touch that handbag or have makeup applied — all those things that are more tactile.”
The tricky thing for Macy’s and other major retailers, according to Lundgren, is that consumers “might buy it in the store, or they’ll buy it at Macys.com or Bloomingdales.com. That’s what’s changed.”
After a rough fall season for Macy’s that saw a disappointing sales report for October — which Lundgren chalks up to warm temperatures that resulted in weak winter wear sales — the retailer was left with an excess of fall merchandise and was forced to liquidate inventory by deep price cuts. But Lundgren believes the retailer is on its way to bouncing back and told CNBC he was “encouraged” by a “great start” to the holiday shopping season.
He noted this was not just in the iconic New York store, “but across the country in our stores. The traffic was there. People were buying.”