Federated Department Stores, the parent company of Macy’s and Bloomindales, has announced that they are investing $100 million into their online operations.
Of course, not all of it is going to fancy flash widgets and outsourced Indian php developers:
Most of the $100 million will be spent on a 600,000-square-foot distribution center in Goodyear, Ariz., that will be the main West Coast shipping point for Macys.com. Construction will begin this spring and take a year.
Some will be spent in San Francisco to support technical upgrades and infrastructure improvements. It is on top of $130 million being invested in such improvements in 2006-2007, including a 600,000-square-foot distribution center opening this month in Portland, Tenn.
Over a million square feet of distribution space should help Macys.com very nicely (see: Macy’s to invest $100M to build online store operation). They want to grow their online business to be a billion dollar slice of their overall sales.
I do. I’m expecting huge things from Macy’s online division this year. I think Federated has a chance to lead all retailers into the new social media revolution. Afterall, they did a test run of IconNicholson‘s “Social Retailing” concept at Bloomingdale’s in NYC last month (see: Bloomies woos young shoppers with social retailing).
Bloomingdales may be known as a fashion destination, but that doesnt mean it cant reach out more to teens and young adults. So in a recent test at its flagship 59th Street Store in New York, it offered an interactive sales-floor mirror that let shoppers view themselves in outfits as well as commentsand images of alternate garmentssent to the mirror by their online friends.
If the shopper likes the looks of a dress suggested by a friend, she can touch the mirror to make the image of the dress appear life-size, then stand in front of the of it to virtually try it on.
Voilasocial retailing. If web-based social networking can work wonders as a marketing and branding tool, online social retailing just might do the same for in-store retailing, says Tom Nicholson, CEO of IconNicholson, the company behind the Magic Mirror.
We see this is a way of bringing the power of the web into stores to support customer sales, he says.
Back in January, I got to see this concept first hand at the NRF Expo and let me say, I was floored. I think that IconNicholson has developed a very brilliant concept – a way to bridge the physical shopping experience with an online buddy list. It’s a costly project, but I think that a retailer is going to score a home run with it in 2007.
Macys could get their billion dollars in sales if they keep doing what they are doing. Invest in infrastructure, better order fulfillment, and stay on top of trends in technology.