Research Note: Macy’s stores draw investors as its digital strategies stagnate

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Macy’s buyout offer targets its valuable real estate

Breaking News: Macy’s has received a $5.8 billion buyout bid from Arkhouse Management and Brigade Capital Management, investment groups that already own shares in the retailer. In particular, the investment groups have their eyes set on Macy’s retail locations as many of the stores occupy valuable land, and the investors are willing to pay a premium for it.

As Macy’s has struggled to keep up with changing consumer behaviors, particularly the uptick in e-commerce purchases, the retailer has seen its sales decline over the years. With the new buyout offer from its investors, the retailer may experience a large overhaul soon.

Questions: How has Macy’s tried to keep up with the changing times, especially against online competitors? How have its digital investments panned out?

Answers From Research:

In Modern Retail’s Index of retailers’ top digital strategies, Macy’s led the e-commerce dimension in 2022 – both overall and within this cohort – through its continued investments in digital. Along with having official accounts on newer social platforms like TikTok and hosting live streaming events, the retailer also launched a third-party marketplace on its website. 

The digital venture, a “curated marketplace” on macy’s.com, was launched in September 2022 in partnership with tech provider Mirakl. “As brands look at omni-channel e-commerce and having a presence where their customers are shopping, we love what Macy’s is doing with Mirakl,” said George Hatch, director of marketplaces at Pattern, an e-commerce accelerator that provides marketplace analytics, in an emailed statement. “It’s a win-win-win scenario. Macy’s is able to offer more products to its customers, more brands are able to reach Macy’s consumer base, and consumers have an additional curated selection of top products to choose from.” 

While the retailer has been struggling to meet financial goals over the last few years, Macy’s has made a concerted effort to boost its e-commerce capabilities in order to try to drive sales – after realizing that its e-commerce experience was holding it back against competitors. Despite its efforts, Macy’s Q3 2023 results showed that sales were down 7% year over year. 

Want to learn more: Modern Retail+ Research’s report on e-commerce strategies examines how different retailer cohorts benchmark against each other in terms of e-commerce experiences.

READ MORE ABOUT RETAILERS’ E-COMMERCE STRATEGIES

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