Macy's puts India among top three focus markets

Mumbai: America's biggest mid-range department store, Macy's, has trained its guns on India. The store has been serving India through its website for the past two years. According to Macy's, it saw 29 per cent increase in walk-in Indian customers at its stores in the US, leading to 19 per cent growth in sales. India has moved up from being the 28th market in terms of in-store sales to 22nd in a short span of time. That's not all. India is now among the top three focus markets for Macy's, thanks to rising online sales.

Strong online sales are a reflection of the popularity of the Macy's stores in New York, which see the maximum number of Indian shoppers. "We usually have eight focussed markets for e-commerce and tourism. India is now as powerful as the Chinese customers," said Keri Hanson, director, tourism and development at Macy's. But these sales contribute to only single digit values so far.

Macy's is mostly shipping Michael Kors handbags and accessories. "A lot of what we sell online are our own brands. INC, Charter Club and others like it are on the website. These brands are merchandised in a certain way in the US, so without that they don't have any relevance for customers," said Hanson. With the web and in-store market growing, the company does not have plans to come to India either through a merchant tie-up or by opening stores.

"Our first international store opens in 2018 in Abu Dhabi. I don't know if India is on the list right now," she said. Macy's, however, is open for joint venture if a suitable partner comes along. The company already sells its products in rupees as opposed to dollars, if the website is accessed via a desktop from India.

Macy's has just started to venture out of the US market. Like most other big box retail chains, Macy's too is struggling to grow in the home market.

Its growth over the past five quarters has dipped consistently from $8,869 million in December quarter to $5,5771 million in March quarter.

The company, despite showing profits, is losing out to Amazon. Other big box retail stores like Sears, JC Penny and NordStrom aren't doing too well either. The chain's first physical store will come up in Abu Dhabi in 2018. Macy's has also tested the waters in China with a tie-up with Alibaba-backed Tmall to open its first virtual store outside the US. Despite its success, the company prefers to be conservative in the approach. "Before we entered China and did our partnership with Alibaba's Tmall, we tested if there was a marketplace for our brands, especially for customers who have not been to the US," she explained. The tie-up means it has started to heavily market its products via the e-commerce website, which includes setting up regional warehouses. But these warehouses can't serve Indian customers. Hanson admits that delivery times for Indian and Chinese customers would vary.

"Unlike other European brands which have been in the market earlier, we don't have regional warehouses. We ship from the US. So, speed to market, speed to customer, all of those logistical pieces need to be worked on and we need to be very transparent with the customer," she said.

While there are no plans to open stores in India anytime soon, the focus will be to develop the mobile website to entice Indian customers. "Some of the things we used were shipping incentives for those who haven't shopped with us before. If you don't have to pay shipping or some of the ancillary cost and we have a great sale online, it is often at par at what you can get locally," she said.

"We want to get a sense of what is trending locally and to start providing some type of market customisation, not only in terms of currency but also sizing and specification" Hanson added. Macy's has no plans for a marketing push in India and will rely on bloggers to attract customers to its website.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.