Commentary

Macy's Names eBay Exec As Prexy, Unifies 3 Units Under Kantor

Macy’s has named eBay SVP Hal Lawton as its president and is combining its merchandising, planning and private brands functions into one division that will organize around five “families-of-business” — Ready-to-Wear, Center Core, Beauty, Men’s and Kid’s, and Home.

“The changes we are making today maintain our core merchandising skills while massively simplifying our structure and processes for greater speed and flexibility. We are also further strengthening our consumer insights and data analytics capabilities so we can make better decisions faster, balancing the art and science of retail,” says Macy’s CEO Jeff Gennette.

Lawton, 43, has been in charge of all aspects of eBay's Americas business unit since May 2015. He spent 10 years in executive positions at Home Depot before that, and had been an associate principal at McKinsey & Co. He will report to Gennette.

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“If there is one thing you should know about Hal Lawton, he is passionate about connecting with customers,” reads an eBay blog post and interview from October 2015. “With just six months under his belt as the head of eBay’s North American business, he has been busy connecting with customers around the world at events like last month’s seller summit and through social media.”

The consolidated merchandising group “will be run by Jeff Kantor, a 35-year Macy’s veteran who is currently head of stores and human resources. As chief merchandising officer, he will succeed Tim Baxter, who is expected to leave the company early next month,” reports Suzanne Kapner for the Wall Street Journal

“We had a lot of decision makers at the table, and we weren’t as fast as we needed to be,” Gennette tells Kapner.

Or, as Phil Wahba writes for Fortune: “Macy's is getting serious about shedding the bureaucratic culture that has caused it to fall behind in the retail wars.”

The result of such stagnation, as Wahba points out deeper in the story, is that “Macy's and other department stores have seen sales decimated by the ‘sea of sameness’ in their product offerings, leaving them with deep discounting as a key means of enticing customers. But those tactics have damaged their brands and hurt the image of the vendors they rely on to get shoppers into stores.” 

About 100 jobs will be cut because of the consolidation.

Yesterday’s moves “suggest Macy's is trying to bulk up its online efforts,” writes Angelica LaVito for CNBC.com

“Macy's has suffered from less foot traffic at malls, which many other retailers have also experienced. Last August, the company announced it would close 100 stores. Macy's stock has plummeted more than 45% this year,” she continues. “Gennette has tried to change that since taking over in March. He has expressed a desire to take on discount retailer T.J. Maxx with Macy's off-brand price offering, Macy's Backstage.”

But the primary threat to the Cincinnati-based retailer, of course,  is not at the malls.

“In the era of online shopping when consumers can buy around the clock from their digital devices, retailers are feverishly focusing on boosting business by gaining deeper, actionable insight into key metrics like inventory levels and consumer buying patterns via data analytics,” observesForbes contributor Barbara Thau. 

“That push is fueled in part by the unyielding encroachment of Amazon, whose data analytics acumen — from its pricing precision to product recommendation prowess — is pretty much unparalleled in the industry. (One telling statistic: 45% of shoppers in the U.S. now start a product search on Amazon.)

Lawton, the incoming Macy’s president, “has been a key player in eBay’s turnaround effort following its 2015 split from PayPal, helping lead initiatives such as guaranteed delivery for millions of items in three days or less, as well as price-matching,” the WSJ’s Kapner points out, and he himself became a top-rated seller on the auction site.

Among the best practices for the holiday shopping season Lawton outlined in his interview with the aforementioned eBay Community blog: “Always be looking ahead. Plan your inventory 4-5 months out.”

He starts at Macy’s Sept. 8, presumably with some last-minute ideas to again make the season merry on Herald Square besides keeping temperatures low. The company blamed last year’s 5.2% drop in comparable sales for the period — which led to the loss of nearly 4,000 jobs — to unseasonably warm weather in the fall and early winter, as Fortune’s Was a reported at the time.

 
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