Macy's CEO sees stores borrowing ideas from online

TUCSON, Arizona Thu Apr 12, 2012 7:31pm EDT

Macy's CEO Terry J. Lundgren speaks with a reporter inside a Macy's store on Black Friday in New York November 26, 2010. REUTERS/Jessica Rinaldi

Macy's CEO Terry J. Lundgren speaks with a reporter inside a Macy's store on Black Friday in New York November 26, 2010.

Credit: Reuters/Jessica Rinaldi

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TUCSON, Arizona (Reuters) - Imagine a kiosk inside a Macy's Inc store that pulls up customer reviews and lets shoppers pay on the spot, or an electronic concierge in the cosmetics section that can recommend skin care products across brands in the store that can best help with a blemish.

These are some of the ideas inspired by how consumers shop online that the department store chain is either developing or planning to roll out further in its stores in the coming year.

"It's clear to me that the consumer likes shopping online," Macy's Chief Executive Terry Lundgren told Reuters on the sidelines of the Global Retailing Conference in Tucson, Arizona. "I am focused on how do we make them feel as comfortable and ready to buy in our stores as they do online?"

Lundgren expects Macy's online sales to reach $2 billion this year, after rising nearly 40 percent last year. That would be about 7 percent of total company sales forecast by Wall Street, according to Thomson Reuters I/B/E/S. Industrywide, about 11 percent of retail sales occur online.

Lundgren, who founded the retailing center at the University of Arizona that is putting on the conference, did not want to say how much higher that percentage could rise. Online sales and in-store sales are both essential for each other, he said.

Macy's plans to have 292 of its more than 800 stores double as distribution centers for online orders by the end of the year in a bid to get products to customers more quickly as the retailer competes with Amazon.com Inc. Currently only 23 Macy's stores also serve as distribution centers.

Peter Sachse, Macy's stores chief, told the conference that the namesake chain's 130,000 sales staff have the technology in their cash registers to "search and send," meaning that if a product is not in store, a salesperson can look see if it's available on macys.com or at one of the distribution centers and land a sale. Macy's also operates Bloomingdale's.

He also said that by early next year, shoppers might be able to use in-store "Nexus" kiosks to pull up customer reviews, create a shopping list and put it on Facebook or another social media service and compare notes with acquaintances.

Sachse, who was Macy's marketing chief before taking on his new job in February, said retailers have no choice but to embrace technology, noting industry statistics that seven in 10 smartphone owners comparison shop online while they are in a store.

"Beauty Spot" kiosks, currently in a handful of Macy's cosmetics sections in a pilot program, should appear in more stores in the coming years. And in an effort to maintain sales in smaller stores, Macy's is also working on an "Endless Aisle" service that would show on a device, for example, all the Michael Kors handbags available not just in that store but across Macy's business.

Lundgren said such efforts are essential to keeping pace. "Not all boats are rising" for retailers in this recovery, he said.

(Editing by Steve Orlofsky)

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