May 14, 2010, 3:51 PM

Where Macy’s goes, other chains must follow

Pure and simple - when it comes to the web, Macy's Inc. gets it.

Pure and simple - when it comes to the web, Macy’s Inc. gets it. When we launched the very first issue of Internet Retailer in the spring of 1999, we put CEO Kent Anderson on the cover. We did so because it was obvious even then that Macy's, unlike many other chain retailers, saw the opportunity in e-commerce. Fast forward more than a decade later, and Macy's is way ahead of many other chain retailers on another industry game changer: the growth in retailing will continue to come from the web and not stores. In April, Macy's online sales increased 23.4% while comparable-store sales rose just 2.8%. For the first four months of the year, e-commerce sales are up 34% while same-store sales grew just 1.1%. Macy's has built its online channel into a business that generated an Internet Retailer-estimated $1.2 billion in revenue in 2009. CEO Terry Lundgren also has told Wall Street analysts that in the future Macy's will commit more of its annual $100 million capital improvement budget to e-commerce over building new stores. In the last three years Macy's has spent money on better e-commerce, order management and warehouse management technology. It opened a state-of-the-art distribution center in Arizona to better serve its online shoppers that live in the western U.S. Macy's clearly sees its future success tied to building up its e-commerce channel even more. That's a lesson other chain retailers still need to learn – and fast. Macy's, No. 20 in the Top 500 Guide, knows that consumers are shifting even more of their shopping online and finding fewer reasons to visit stores. Macy's understands the web, unlike many other store-based retailers.

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