January 12, 2017
Two recent announcements underscored the continuing evolution of retail from a physical to a blended and digital experience. Headlines blared last week that Macy’s, one of the flagship brands in U.S. retail, would lay off more than 10,000 workers and shutter 100 of its 730 locations. Buried in the same announcement, though, the company said it will invest much of the $550 million in cost savings it expects from the closings into its digital channels. Like many other traditional retailers, Macy’s intends to use its physical presence in hundreds of locations to implement omnichannel capability that could be a strategic advantage over online-only retailers.
“Our omnichannel strategies continue to evolve based on the changes in our customers’ shopping behaviors, including a focus on buy online, pickup in store and mobile-enabled shopping,” said Terry J. Lundgren, chairman and CEO of Macy’s, Inc.
Amazon is the name most frequently cited in the U.S. when talking about the brutal competition physical retailers are facing from online-only foes, but the largest e-commerce merchant in the world—Alibaba—thinks it is going to have a profound impact on the U.S. economy in the near future. The company’s founder, Jack Ma, met with Donald Trump in New York last week, promising that easier trade between the U.S. and China—specifically making it easier for U.S. businesses to sell to Chinese consumers via Alibaba’s e-commerce sites—would result in an employment creation boom.
“Alibaba will create one million U.S. jobs by enabling one million American small businesses and farmers to sell American goods to China and Asian consumers on the Alibaba platform,” the company said in a statement.”
The announcements from Macy’s and Alibaba are more indicators that CNP transactions will continue to grow, resulting in increased opportunities and increased threats.