Mapping Macy’s Biggest Market Share Losses

  • August 23, 2016 at 11:29 AM EDT
  • By Glenn Taylor
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In preparing to close another 100 stores in the U.S., Macy’s has been the poster child for the difficulties that have plagued department stores in 2016. With the retailer aiming to optimize store space, it must narrow down which stores aren’t performing up to par, as well as monitor the climate surrounding the stores.

Between 2014 and 2015, Macy’s lost the most market share in two cities: Milwaukee, Wisc. (14%) and Pittsburgh (12%), according to a study from business analytics platform provider 1010data. 1010 data used its Local Marketing Intelligence (LMI) product to research metrics such as basket size, trip frequency and market share to identify potential problem areas within Macy’s locations.

The data indicated that out of the rest of the top 10 cities where Macy’s experienced the most significant negative changes, five were located in the Midwest, including:

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  • Hartford, Conn. (9.4% market share loss);

  • Philadelphia, Pa. (9.1%);

  • Detroit, Mich. (8.2%);

  • Cincinnati, Ohio (7.5%);

  • Daytona Beach, Fla. (7.4%);

  • St. Louis, Mo. (6.2%);

  • Columbus, Ohio (5.9%); and

  • Cleveland, Ohio (5.7%).

Macy’s performance in these cities may be reflective of a larger trend — that Midwestern shoppers may have grown disenchanted with traditional and department store shopping, particularly in malls.

At least in the case of Pittsburgh, the 1010 data revealed that Macy’s appears to be cannibalizing its own sales efforts, lending further credence to the idea that more store closures may be necessary for the brand. Although Macy’s had nine stores within the Pittsburgh area while Nordstrom had only one during the monitored time frame, Nordstrom actually held 44% of the market share in the region and even had an increase in basket size, despite 37% fewer store trips.

The dip in traffic and juxtaposed basket size increase indicates that shoppers are still spending a money at these locations, but are picking their spots of when to do it. With that in mind, Macy’s and other traditional brands with similar market share issues are going to have reassign their resources to other channels as well as focus on getting the customers into the store and keeping them there beyond the purchase.

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