Macy's Inc (M) online sales hit $1 billion in December

Mobile devices driving growth

NEW YORK -- Macy’s Inc. celebrated its first billion-dollar month on digital platforms in December. This, after its first Black Friday in which more than half Macy’s web traffic came from smart phones.

Coincidence? Yasir Anwar thinks not.

“The mantra I’m preaching is mobile first,” said Anwar, group vice president of digital technology for Macy’s and Bloomingdale’s, in an interview at the National Retail Federation’s 2016 convention in New York.

Anwar is a self-described “innovation enthusiast” who leads Macy’s digital team from San Francisco. That team was one of the few bright spots in the holiday shopping season for Macy’s, which announced 40 store closures and thousands of job cuts Jan. 6 after disappointing sales results in November and December.

The NRF announced Friday that retail sales grew 3 percent nationwide to $626.1 billion in the 2015 holiday season. Online sales grew 9 percent to $105 billion. For Macy’s, same-store sales declined 5.2 percent while online revenue increased 25 percent.

“We filled nearly 17 million online orders at macys.com and bloomingdales.com – a new record for our company,” CEO Terry Lundgren said in a press release.

So, Anwar filled the room when he joined a sales executive with the software firm Salesforce to describe Macy’s online efforts.

“It’s coming very fast, digital disruption. It’s all around us,” Anwar said. “The largest car rental or cab company does not own any cars. The largest media company in the world, Facebook, doesn’t own any content.”

In the retail industry, digital technologies have shortened the development cycle for new products. What used to take months now takes weeks.

“That has allowed us to experiment with our customers many different times a year,” he said. “The best way to do it is learn faster than others and do it with the customer looking. I always talk about (developing products) not only for the customer but with the customer. Our cycles have to be shorter.”

That’s why Anwar is growing the number of “lean startups” at Macy’s Labs, an incubator for new product ideas in San Francisco.

“Lean startups are small, empowered teams that are going against a particular idea, working an experimenting with the customers very, very fast,” he said.

Macy’s had one lean startup active in 2014 and expanded to a dozen last year. In 2016, Anwar expects to have 18 teams in play.

Among the new products developed by the group so far is an “image search” feature on the Macy’s app. It lets shoppers take a picture of an item instead of typing in a search term. During the 2015 holiday season, Anwar’s digital team produced an e-gift product that let shoppers send a gift for a dress or sweater, allowing the recipient to choose the size and color.

“Customer behavior changes every week, every month, right? So, the key is innovating with the customer,” he said. “That is a big paradigm shift in terms of how we start looking at things, not from inside out. As Steve Jobs said, you start with the customer experience then work your way backwards into process and technology.”

That approach has put Macy’s in a leadership position when it comes to mobile technology, said Shelley Bransten, senior vice president for Salesforce.

“The shopper is the quarterback,” she said. “The shopper is completely driving how the game is going to get played in retail. It’s all about knowing me and making it easy for me.”

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