At Federated, the web focus is on driving multi-channel sales
Federated Department Stores Inc. has built up its e-commerce unit into a business that “generates several hundred millions of dollars per year,” but Federated is most concerned with using the web to identify and drive multi-channel sales, chairman and CEO Terry J. Lundgren told attendees Monday at the National Retail Federation convention in New York City.
Federated, which operates Macys.com, Bloomingdales.com and about a dozen other e-commerce sites it acquired when Federated bought the May Department Stores Co., employs about 100 people in San Francisco and another 125 in New York City to support the web and e-commerce, Lundgren says.
But Federated’s top job is using the Internet and e-commerce to promote its brands and drive multi-channel sales. “Our two-channel customers spend about 29% more each time they make a purchase than if they just shopped in one of our stores or on the web,” Lundgren says.
Almost 59% of customers who shop online at Macys.com, Bloomingdales.com and other Federated sites also shop the company’s network of bricks-and-mortar stores. On the web about 40% of all customers use a Federated private-label card to make purchases, Lundgren says. “Using the web we can reinforce the Macy’s brand across other channels,” he says.
When Federated acquired May in August in a deal valued at almost $17 billion, Federated added several hundred new stores to its store network and now has almost 900 stores in 49 states. As Federated re-names more former May stores as Macy’s locations, Lundgren says the company is seeing a big spurt in both online and offline sales. “When we converted stores in Florida we saw a big spike in sales from that region on Macys.com and now we are seeing the same trend in Atlanta,” Lundgren says. “The web has an impact on our stores and the stores help drive more online sales.”
Federated was a pioneer in web retailing, but Lundgren says e-commerce at the company is still growing and evolving. “It’s hitting its stride,” he says. “I used to think of Macys.com as a single store. Now I see it as one of our single best stores and a store that’s still gathering momentum.”
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