Macy's is among the large retailers that have condemned racism after the killing of George Floyd, but the company was fined $650,000 in 2014 by New York state following a racial profiling investigation
Macy's is among the large retailers that have condemned racism after the killing of George Floyd, but the company was fined $650,000 in 2014 by New York state following a racial profiling investigation GETTY IMAGES NORTH AMERICA / Scott Heins

Retailers are facing a challenging environment in 2022.

Competition is growing due to the merger of online and offline sales. Merchandise inventories are hard to manage, due to supply chain disruptions. And shoppers have little discretionary income left after paying for food and energy, which takes a big chunk of the family budget. As a result, most retailers have been reporting lackluster financial results, disappointing Wall Street.

But not Macy's. Last week, the iconic retailer reported strong financial results, finding its way back to the center of the consumer universe. Wall Street cheered the comeback, sending its shares close to 30% higher for the week.

Macy's comeback may have come as a surprise to some retail experts, but not to Jane Cannon, chief retail strategy officer at NewStore. Cannon credits Macy's success to its omnichannel ecosystem.

"Consumers today need to be met where and when they want to shop — whether that's online or in-store," Cannon told the International Business Times. "Consumers ultimately care about the brand they're buying from, not the channel they are shopping through, so the retailers that are able to unify their online and physical channels to deliver consistently seamless customer experiences will be the ones who are able to succeed in the volatile market conditions of today and tomorrow."

Ethan Chernofsky, a vice-president of marketing at foot traffic analytics company Placer.ai, attributes Macy's strong financial performance to extensive investments in two processes.

"On the one hand, they strategically handled their rightsizing efforts to ensure maximum reach while lowering the overall store count," Chernofsky told IBT. "This creates a more optimized reach for the retailer across the country. On the other, new concepts like Backstage are really paying off. Pushes like these to expand the audience and create a more robust offering are creating an even greater draw to locations."

Simply put, Macy's got better by getting smaller.

Joe Ayyoub, chief revenue officer at Search.io, has another theory: the proper positioning of the company in the retail space.

"The success of Macy's compared to other retailers started with them catering more to millennials by launching several brands," Ayyoub said to IBT. "They also pushed out massive marketing and social media programs, invested heavily in the online user experience, and enabled their omnichannel and multichannel user experience."

Meanwhile, Ayyoub credits Macy's success to a couple of more factors, like the effective integration of online and offline shopping, thanks to the company's extensive store presence around the country.

"Macy's was able to merge the in-store and online experiences by allowing shoppers to buy online and pick up from stores, buy in-store, and have their products delivered," he said. "Consumers were able to return online purchases in-store and use paper and digital offers in their shopping experience."

Then there's the mastering of the supply chain to ensure that the company has sufficient inventory to meet shopper demand.

"An example of this is one order was able to be split between a store in Seattle and a warehouse in Southern California. As a result, consumers were guaranteed satisfaction, which resulted in amazing customer loyalty," said Ayyoub.

Indeed, Macy’s got its business strategy right to shake off the many challenges, competition, geopolitics, and a challenging macroeconomic environment.