Our Macy's SWOT analysis provides insight into the strengths, weaknesses, opportunities, and threats that Macy's faces.
If you've never been to Macy's, don't even call yourself a US resident. No matter in which state you live, it is simply not possible that you've never been there.
Macy's is one of the most famous department stores in the US. This is because its stores have a wide variety of brands in them. Such variety provides a significant number of options to the customers; that's why they prefer going to Macy's.
People have given Macy's the status of the US's national store, which is impressive. In this article, we will first share Macy's background with you, then conduct a SWOT analysis on Macy's.
Macy's SWOT analysis will provide us insight into the strengths, weaknesses, opportunities, and threats that Macy's faces.
Jim Makos
Okay, so we will start off by sharing the history of Macy's quickly so that you know about the business in advance. Macy's is an American department store chain. It was founded in 1858.
In 1994, it got associated with Bloomingdale's, America's other big store. Later in 2007, it was renamed Macy's; it has gained skyrocketing popularity from there onwards.
Macy's is considered a home for all the fashion industry's top brands. Therefore, customers prefer visiting Macy's since they get access to all the top brands, such as Puma, Zara, Under Armour, H&M, etc., in one place.
Macy's offers personal use products to its customers, from clothes to kitchen use products, furniture, home decor products, and dining products.
Besides its majestic stores and state-of-the-art facilities, Macy's is also known for its Thanksgiving day parade. Macy's conducted the first Thanksgiving day parade in 1924. Since then, a parade is organized by Macy's to celebrate Thanksgiving every year.
The parade has always been a center of attention for the people of New York. Every year, millions of people gather to witness one of the most vibrant parades, including helium balloons, marching bands, floats, and much more.
Macy's has many stores opened up across the US in every state. There are 570 stores present at 510 different locations across the US.
Macy's is financially powerful. In 2020, Macy's was ranked the number one department store in the entire US since it had the highest sales, worth $17.35 billion.
Moreover, Macy's International presence has also helped it generate vast sums of revenue. Macy's is considered the market leader since it was named the world's largest department store chain in terms of revenue after generating revenue of more than $24.97 billion in 2019.
In 2022, Macy's managed to generate revenue of $25.3 billion which tells much about its popularity.
Looking at the rich history of Macy's and how it has managed to become the market leader in the industry of department stores, we feel the need to carry out a SWOT analysis to see what strengths, weaknesses, opportunities, and threats it has to face.
The SWOT template of Macy's will give us complete insight into the internal and external factors affecting Macy's.
Strengths of Macy's
Strengths are the strong points of an organization. Factors considered as strengths help an organization to move upwards in the market.
Here we will discuss some of the strengths of Macy's that helped it grow over time.
Vast Variety
Macy's offers a large variety of products to its customers. So if you want to buy furniture, home appliances, clothes, and toys for kids, you don't have to go to different shops; just visit Macy's, and you can get all of that in one store.
Macy's has a wide variety of products that have helped it increase its customer base. Customers feel much more satisfied shopping at Macy's than at any other store.
Customer Relationship Management
Macy's is known for excellent customer service and relationship management. When you have a problem with your purchase, their customer service agents go out of their way to ensure you are satisfied.
Macy's understands the value of excellent customer service and excellent quality and tries its best to accommodate its customers to the maximum. This is why Macy's is considered among the topmost retailing brands in customer satisfaction.
Marketing
Marketing is an essential tool to attract customers; without effective marketing, it is impossible to compete in such a competitive market.
Macy's has probably the most amazing and unique way of doing marketing all across the globe. Instead of spending millions of dollars like its competitors on printed and digital advertising, it carries out a Thanksgiving day Parade. This parade serves the purpose of both a cultural event and a marketing act for Macy's.
Macy's Popularity
Gaining popularity among the masses is the dream of every brand. To become a household name, years of marketing and a good reputation are needed. However, Macy's has managed to become a household name.
The company has been around since 1858, and its stores are popular among all consumer demographics due to their wide-ranging products. This provides Macy's competitive advantage over its competitors.
Use of Technology
In the era of technology, Macy's is using technology for its own benefit. Macy's has expanded its operation with the use of technology. In addition, the retailing brand is using digital channels to increase its sales.
It is predicted that by 2023, Macy's sales worth $10 billion will be made from digital channels.
Weaknesses of Macy's
SWOT analysis is incomplete without discussing the weaknesses of an organization. The letter W in the acronym SWOT represents the weaknesses an organization possesses.
Weaknesses are the shortcomings of a company that stops it from achieving its potential.
After discussing the strengths of Macy's, In this section, we will shed light on some of its shortcomings.
Failed Expansion Projects
When the New York retailer announced that it would follow its previous US expansion and open stores in the UAE, loyal American customers living abroad rejoiced in anticipation for their favorite department store to arrive.
But a few years later, Macy's canceled their expansion plans without any direct explanation as to why. Macy's has disappointed many international customers with this move, and now those customers may have lost trust in Macy's long-term commitment to global expansion plans.
High Dependence on the US Market
Macy's has a strong market position and has a high market share. However, the company has a heavy dependency on the US market which increases its vulnerability to the negative socio-economic issues of the country, such as increasing unemployment, poverty, inflation, etc.
Although Macy's also has an international presence, it is nothing compared to its presence in the US. Out of 787 stores in total, 570 of them are present in the US.
Expansion
The most used strategy to increase revenue and market shares is to expand the company's operations. For example, Macy's has been dominating the US market for quite some time now, but it hasn't grown outside the US as much as it could.
Macy's wasted its potential to dominate the world market. Instead, it could have increased its market share to a great extent by entering untapped markets across the globe.
Opportunities for Macy's
Opportunities are the chances that are provided to the organization to grow. These changes arise naturally due to the external environment.
Now we will have a look at some of the opportunities ahead of Macy's to attain growth and expand its operations.
Increase Global Presence
Macy's has achieved a lot in the US. It is already considered the market leader in the US. Since operations of Macy's are going well in the US, this is the perfect time for Macy's to increase its global presence by focusing on international markets.
This will help Macy's increase its revenue and market share. It will also help Macy's gain popularity all across the globe.
Diversify
Macy's sold men's and women's clothes and accessories, cosmetics, home goods, and other items for decades. However, since Macy's has now managed to hold a significant market share, it could now diversify what it has to offer.
Besides offering the usual, Macy's can now diversify its operations by offering second-hand clothes, or it could use its name to enter the food and beverages industry. This will increase Macy's revenue stream and expand its customer base.
Mergers and Acquisitions
Macy's has reached the point where it could merge or acquire its competitors. However, with many competitors in the surrounding area, it does get suffocating. Therefore, in order to remove competitors from the market, Macy's can apply mergers and acquisition strategies.
The acquisition of a competitor could be just what Macy's needs to expand its operations. By gaining new market share, Macy's could sustain its position as the market leader in the future.
Threats Faced by Macy's
For any organization, factors that can adversely impact the organization's performance are considered threats. Now we will discuss some of the threats that Macy's is facing currently.
COVID-19
Macy's is one of the companies that observed severe losses during COVID-19. The US was one of the most affected countries during COVID-19. Due to its strict lockdown policies, Macy's observed an almost $1.1 billion loss during COVID-19.
After the vaccination process, an ease in the lockdowns was observed, and everything started getting back to normal. However, still, there's a threat of further waves of COVID-19. These upcoming COVID-19 waves are considered a threat to Macy's.
Tough competition
No matter how well a company is doing, it is always worried about its competitors. Being part of a market full of competitors always trying to take your position can be stressful. Cutthroat competition is observed in the department store industry.
Although Macy's has a significant market share, it still has to watch its competitors ensure its position in the market. Several retailing brands such as Nordstrom, TJ Maxx, and Kohls are always chasing Macy's to steal its market share.
Macy's competitors are a threat to Macy's. To stay one step ahead of its competitors, Macy's should look for ways to gain a competitive edge.
Global Recession
Recessions are always painful for businesses. What they actually do is take away wealth from people and lower their standard of living. Other than that, during recessions, there is always uncertainty. Due to uncertainty, people save more and spend less.
After COVID-19, as the world came back to normal, significant inflation was experienced worldwide. In addition to that, due to the current tension between Russia and Ukraine, it is expected that the world will experience a recession soon.
The global recession risk can be considered a threat to Macy's. As the living standard would drop because of the recession, sales of Macy's would experience a considerable drop that can result in serious financial problems for Macy's.
Macy's SWOT Analysis: Final Thoughts
In this article, we shared the history of Macy's with you and told you about how it has a significant share in the US market.
Then we moved on to the SWOT analysis of Macy's, where we learned the strengths, weaknesses, opportunities, and threats that Macy's faces.
We carried out this SWOT analysis in the form of an article. Still, the highlights of this SWOT analysis can be represented through a SWOT Matrix, which is a more efficient way to describe SWOT analysis.
After reading this article, now you know what external and internal factors influence Macy's. We assume that now you also have an idea about how to conduct a SWOT analysis.
SWOT analysis is a handy tool to analyze internal and external factors affecting the operations of a business. To understand what SWOT analysis is in detail and how it is conducted, look at some of our examples of SWOT analysis.
