February 28, 2013, 4:06 PM

Online sales surge 41% in 2012 for Macy’s

E-commerce comprises most of the department store chain’s growth.

Kevin Woodward

Senior Editor

Lead Photo

Department store chain Macy's says mobile commerce is aiding the growth in online sales.

Macy’s Inc. says increased traffic and improved conversion rates for its online sites, Macys.com and Bloomingdales.com, resulted in a 41.0% growth in its online sales in 2012 compared with 2011. E-commerce accounted for most of the chain’s growth, especially during the fourth quarter, which included the holiday season.

Fourth quarter online sales were up 47.7%. Macy’s did not provide dollar figures for online sales for the year or the fourth quarter. Macy’s sold $2.25 billion online in 2011, according to Internet Retailer’s estimate.

For 2012, Macy’s, No. 14 in the Internet Retailer Top 500 guide, reported:

  • Total sales increased 4.8% to $27.69 billion from $26.41 billion in 2011.
  • Same-store sales, which include e-commerce, grew 3.7%. Of that, e-commerce contributed 2.2%.
  • Net income of $1.34 billion, a 6.3% increase from $1.26 billion.

“Sales transactions over the Internet were very strong,” Karen M. Hoguet, chief financial officer, told analysts during an earnings conference call. “We are very pleased with Macys.com and Bloomingdales.com efforts to grow our customer base and increase the spending with existing store customers.”

Macy’s was buoyed by mobile commerce from smartphones and tablets, she said. “Particularly encouraging was the growth in mobile traffic, where conversion does tend to be lower than on desktops,” Hoguet said. The growth in mobile sales is making it more difficult to distinguish which transactions count as store sales and which are mobile, she said. “Sometimes a product is being bought on a mobile device inside a store,” Hoguet said. “I’m not sure how to define that.”

Because of the growth in e-commerce sales, Macy’s has embarked on an overhaul of its fulfillment process, Hoguet said. Currently 292 of its 844 stores are set up to fulfill orders for online purchases, up from 23 a year ago, she said. “By this fall, we expect to have 500 stores,” Hoguet said. “Customers don’t really care from where we pull the goods, as long as we fill the order accurately and the delivery is timely,” she said.

Macy’s plans to open only three stores in 2013, compared with seven planned in 2012 when it closed eight stores.

For the fourth quarter ended Feb. 2, Macy's reported:

  • Total sales increased 8.0% to $9.4 billion from $8.7 billion in Q4 2011.
  • Same-store sales, which include e-commerce, grew 3.9%. Of that e-commerce contributed 3.3%.
  • Net income decreased 2.0% to $730 million from $745 million.

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