The Problem Facing Macy`s The Impact of Online Shopping on Retail Stores in the US

TheProblem Facing Macy’s: The Impact of Online Shopping on RetailStores in the US

ResearchProposal

CHAPTERI: INTRODUCTION

Background

Theadvent and increasing use of online shopping platforms is havinggreat impacts on the lives of shoppers, especially as it iseliminating the need to travel to stores and reducing costs oftravelling and carrying items back home. Nevertheless, the newshopping method is also having negative impacts on retailers,especially by reducing the number of visits in their stores. One goodexample of a company that is facing this problem is the Americandepartmental store Macy’s, which is facing reduced visits andsales.

Originallyknown as R. H. Macy &amp Co., Macy’s is an American departmentalstore and one of the oldest of its kind, having been founded 158years ago in New York City. The company is one of the two divisionsowned by Macy’s Inc., a holding company whose headquarters are inCincinnati, Ohio. The other store chain owned and operated by thesame company is Bloomingdale’s. Macy’s specializes in footwear,clothing, beauty products, accessories, furniture, bedding and housewares. Apart from its various stores across the US, the company alsooperates other stores in Guam and Puerto Rico.

Bythe end of 2015, the company was operating more than 725 departmentalstores, the majority of them being located in various American cities(Li, 2016). Nevertheless, starting early 2016, the company facedmajor problems and was forced to close over 40 of its stores, whichwas followed by a significant round of layoffs (Li, 2016). Further,Macy’s sales continued to decline throughout 2016, and by early2017, it had lost more than 80% of its sales. In addition, thecompany’s stock has reduced by more than 50% since 2015, indicatinga major problem at the old departmental store (Li, 2016). So, whatcould be the problem? While many analysts argue that competition andtrend of purchasing could be the cause of Macy’s woes, it is quiteclear that the modern purchasing trend is the main issue. In thiscase, the problem with Macy’s is the emergence of online purchasingplatforms, which gives shoppers an opportunity to make purchasesthrough online platforms, thus reducing the need to visit stores.Combined with other economic problems in the country, the newshopping behaviour has greatly affected Macy’s, thus the problem atthe departmental store (Li, 2016).

Reference

Li,S. (2016). Macy`swoes could signal trouble for retailers.Retrieved fromhttp://www.latimes.com/business/la-fi-macys-retail-20160108-story.html