10

September, 2020

Don’t Let Macy’s Earnings Fool You

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Summary:

As ZM’s report Monday highlighted, changing quarantine behavior can create some big winners.

But it can also highlight companies on the wrong side of the shift. For example: Macy’s.

On Wednesday, the company announced Q2 earnings that highlighted stronger than expected online sales growth.

Digital sales were up 53% compared to a year ago, and the company even said it expects “a healthy double-digit [digital] growth rate through the back half of the year.

Great news, right?

Not so fast.

Is Macy’s Rush to Digital Creating Consumer Chaos?

LikeFolio data shows that while more consumers are indeed moving to Macy’s digital platforms, the company is doing a terrible job of fulfilling their expectations.

One look at Likefolio Consumer Happiness levels tells the story:

From March to mid-June, Consumer Sentiment fell 25 points, and now settling in 12 points below March levels.

What are consumers talking about?

Mentions were riddled with discussions surrounding an employee being beaten inside a store, a flopped “surprise” fireworks show (these tweets went on for 3+weeks), but most importantly, poorly executed digital services during the pandemic.

Bottom Line

We’ve seen how companies with a great ecommerce solution (think Target, Walmart) have been able to thrive under the new pandemic rules and restrictions.

But companies like Macy’s, who were essentially forced into bringing their half-baked digital strategy into the spotlight in 2020, are having a tough time keeping up.

While Macy’s may have been able to patch together a satisfactory Q2 by leaning hard on digital sales, it could come at an exceptionally large long-term cost as frustrated customers look to more competent ecommerce offerings in the future.

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