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Macy’s CEO: COVID Resurgence Could Require Temporary Store Reclosures

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COVID-19 cases spiking in communities across the U.S. could force Macy’s, and presumably other brick-and-mortar retailers, to temporarily reclose stores, said Macy’s CEO Jeff Gennette during a Nov. 19 conference call with analysts.

“We’ve modeled closures [but] don’t anticipate them — but if they were to happen, we’ll be ready,” said Gennette. “It’s heartening to hear about vaccines. But when you look at the surging that’s going on right now in the country, we’re mindful of that. So we have a dashboard that looks at all those metrics, what that means in terms of the customer sentiment, our staffing levels or what we need to do with our services. We’re getting expert at this and we’re ready to go no matter what comes our way.

Gennette believes retailers that are capable of operating safely should be allowed to stay open, regardless of the types of products they sell. “We don’t believe that designation of essential and non-essential should play in retail,” he said. “We believe you need to have a safe environment or not [and that] we should be held accountable to health and safety standards. And we stand by those.”

While Macy’s has had to close its store in the Cielo Vista Mall in El Paso, Texas, due to a surge in cases in the area, the retailer is continuing to use this and another shuttered location as  dark store fulfillment centers. “We have a flexible business model that enables us to remain relevant to our customers,” said Gennette. “We can adjust formats, channels, categories, brands, services and price points to meet our customers wherever and however they’re shopping.”

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Macy’s Customer Acquisition Efforts Net Younger Shoppers

Like many other omnichannel retailers, Macy’s has focused more of its efforts on ecommerce in 2020. Gennette reported that the retailer has been successful in attracting a large number of new shoppers. “Of the 4 million new customers that came in the second quarter, they were much younger and more diverse than what we’re seeing in our core business,” he noted. “A nice chunk of those have already gone on to a second purchase, mostly online, but a number of them have also come into our stores.

“We’ve also seen that trend of new customers, again, more diverse and younger, [with the] 3 million new customers that came in during the third quarter,” he added. “We’re trying to get them into our loyalty programs, and a number of them have converted into the Star Rewards program. This gives us the opportunity to track them very carefully, look at the cohorts they might behave like and look at their signals, and then feed them personalized content based on that. The 7 million customers that have come into the brand has been a great opportunity for us to build on their lifetime value with us.”

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