Macy's to invest $1B in CapEx as omnichannel grows
Macy's (NYSE:M) is putting its money where its mouth is, promising to invest up to $1 billion in technology and infrastructure to support online and omnichannel efforts.
"Internet-generated demand continues to grow rapidly and we believe that will continue, particularly now that we have rolled out Buy Online Pickup In Store, which some people refer to as click and collect, to all the Macy's and Bloomingdales stores," CFO Karen Hoguet told analysts during a conference call.
Macy's rolled out a buy online, pick up in-store feature to 675 full-line stores in early August. And while the program was too new for Hoguet to comment on, she highlighted the initiative as one that holds big promise for the holiday season.
"We haven't even marketed this capability yet, and we are already finding that many customers like this option," Hoguet said. "Once in the store, these customers are often buying other items as well. We are excited though by what we have seen so far and expect it to be a help in the holiday selling season. Omnichannel strategies are clearly enabling us to accelerate growth and we are just at the early stages of exploring all the opportunities."
Macy's is investing primarily in technology that builds out omnichannel programs.
"Behind the scenes, we are also managing expense prudently, so we can continue to invest to advance the progress in our core strategies," she said. "We are taking a more holistic view of inventory, so we can effectively and efficiently fulfill customer demand from all directions. We are applying our $1 billion-plus annual CapEx budget to projects that will continue to build our infrastructure for growth."
The department store chain is among a growing group of retailers to report growing sales through online channels. Best Buy (NYSE:BBY) and DSW (NYSE:DSW) both announced higher online sales even as those at stores open for at least a year struggled. But unlike Macy's, Best Buy plans to focus its investments in customer facing initiatives to improve the in-store experience, while DSW has formed a partnership with eBay to expand fulfillment capabilities.
"Internet-generated demand continues to grow rapidly and we believe that will continue, particularly now that we have rolled out Buy Online Pickup In Store, which some people refer to as click and collect, to all the Macy's and Bloomingdales stores," CFO Karen Hoguet told analysts during a conference call.
Macy's rolled out a buy online, pick up in-store feature to 675 full-line stores in early August. And while the program was too new for Hoguet to comment on, she highlighted the initiative as one that holds big promise for the holiday season.
"We haven't even marketed this capability yet, and we are already finding that many customers like this option," Hoguet said. "Once in the store, these customers are often buying other items as well. We are excited though by what we have seen so far and expect it to be a help in the holiday selling season. Omnichannel strategies are clearly enabling us to accelerate growth and we are just at the early stages of exploring all the opportunities."
Macy's is investing primarily in technology that builds out omnichannel programs.
"Behind the scenes, we are also managing expense prudently, so we can continue to invest to advance the progress in our core strategies," she said. "We are taking a more holistic view of inventory, so we can effectively and efficiently fulfill customer demand from all directions. We are applying our $1 billion-plus annual CapEx budget to projects that will continue to build our infrastructure for growth."
The department store chain is among a growing group of retailers to report growing sales through online channels. Best Buy (NYSE:BBY) and DSW (NYSE:DSW) both announced higher online sales even as those at stores open for at least a year struggled. But unlike Macy's, Best Buy plans to focus its investments in customer facing initiatives to improve the in-store experience, while DSW has formed a partnership with eBay to expand fulfillment capabilities.
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