Why Macy’s Struggles Expose a Deeper Crisis in B2C Marketing Automation

By: Sameer Patel | January 9, 2017 | Artificial Intelligence, Marketing Automation


Tragic news has just come out stating that over 10,000 people will lose their jobs at Macy’s. The iconic retailer is struggling to adapt to a more modern and relevant form of consumer engagement and commerce.

Contrary to what the media suggests, the lessons here aren’t just about transitioning to online sales. Retailers are succumbing to a much broader phenomenon that goes far beyond a binary analysis of brick & mortar vs e-commerce.

Instead, it points to retailers needing to embrace 3 data-driven cross-channel marketing approaches that progressive marketers have already ingrained in their DNA:

1. Be data-driven at every step so that you can adapt to changing consumer preferences and buying journeys, in real-time

Consumers are willingly exposing digital bread crumbs about themselves on mobile devices every day, such as location, wish lists, and unchecked shopping carts, and so they expect that you use this information to market to them in an informed and respectful way.

2. Employ a channel-agnostic approach that’s more nuanced than broad brick & mortar vs e-commerce brush strokes

Amazon wrote the book on e-commerce vs brick & mortar a decade ago. That show is over. Now, it’s about a more surgical understanding of micro-segments within and across digital and physical engagement touchpoints. Today this entails in-store retail vs email vs smartphones and tablets, and even the good old PC. Tomorrow, add chatbots, beacons, and internet-enabled devices to this dynamic list. And with Alexa and Google Assistant, voice and natural language processing based consumer engagement isn’t too far away. And the interplays between specific channels that influence vs those that convert is a whole other dynamic.  No one is truly immune to this change. Expect to see both e-commerce and traditional retailers face the same risks as the engagement touch points expand—and at a much much faster rate.

3. Leverage machine learning and artificial intelligence to treat every consumer as an audience of one

Marketers must evolve from a process flow-based marketing automation platform to an engagement-centric technology platform. The former was designed to make the lives of the marketer more productive and to reach higher campaign volumes. The latter is designed to make the retailer fanatical about serving every consumer—and on her terms. You never feel like you’re being marketed to when you request an Uber or add an Amazon recommendation to your shopping cart. The automation smarts used by modern marketers makes lucrative offers look like useful information.

What the 2016 holiday shopping season teaches us

The 2016 online holiday shopping season was a blow out. TechCrunch and Adobe Systems reported that e-commerce activity was up overall, Black Friday sales increased by 26%, and mobile continued to play a central role, and interestingly, tablets and PCs accounted for better conversions. Email (yes, email) still accounted for a fifth of holiday online sales. And to give consumer marketers a serious headache, the journey spreads across touch points: when research starts on a mobile device, 79% of shoppers buy within the day, and it’s highly likely that the purchase ends up happening at a physical retail store.

Clearly, maintaining a fragmented view of the customer across a growing set of channels will not suffice. Nor will it be OK to not be able to engage consumers at exactly the right touch point, at the right time. In 2017, marketers will need to look for true cross-channel solutions that can provide a single profile of the consumer and can respect the pace at which the consumer wants to traverse the purchase journey, engaging him on just the right channel with the right message and at the right time. It could be one of a growing list of digital channels. It could well be in-store. But a mobile-only strategy, or an email-only strategy, or worse, a multi-channel-lets-bombard-every consumer-on-every-channel strategy, just won’t cut it.

Retail and e-commerce in 2017

If you’re a marketer, the Macy’s episode proves beyond a doubt that the roof is on fire. Fortune Magazine throws down the gauntlet with this scathing comment:

“2017 will be a decisive year for many retailers, as investors will feel many have had enough time to show they can figure out a way to update how they do business in the e-commerce era.”

Cross-channel marketing automation software that lets the consumer engage with a brand on her terms is here. Modern marketers aren’t waiting. They’re moving now, well in advance of the big shopping days of 2017. As major retailers begin to re-tool for a digital-first commerce experience, the silver lining in all of this is that they have an opportunity to embrace a modern cross-channel marketing strategy and technology stack.

Game on.


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Author: Sameer Patel

Sameer Patel joined Kahuna in August 2016 as CEO. Prior to Kahuna, Sameer was GM/SVP at SAP/SuccessFactors where he led the team responsible for making SAP a leading provider of customer and employee collaboration solutions, serving over 35 million subscribers. Prior to SAP, Sameer worked consulting and systems integrator business. He has keynoted over 50 industry and venture capital/private equity events and has been quoted in publications like The New York Times, CNBC, The Wall Street Journal, TechCrunch, and HBR. Sameer received his Bachelor’s in Finance and Economics from Babson College and his Master’s in MIS from Boston University. He enjoys writing about leadership and high-performing enterprises on his blog, Pretzel Logic.

Fun fact:

Sameer has worked in seven countries, was a nationally-ranked squash player, and has swum 3 open water races. His current passion is subjecting his family to his (mis)adventures in the culinary arts.



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