Major retailers like Macy's have significantly invested in omnichannel retail to meet rising consumer demand for seamless shopping experiences across channels. Macy's sees omnichannel strategies as crucial to boosting revenue and has created the new position of Chief Omnichannel Officer to better integrate its stores and digital platforms. Saks is also investing in omnichannel and updated its inventory systems while working to improve its omnichannel offerings. Both retailers reported online sales growth and aim to continue providing customers with seamless shopping experiences online and in-store.

1. Omnichannel Retail
Major retailers including Macy’s have made significant technology investments in this area which is being led
by consumer demand. Omnichannel retail has reached a tipping point. Retail technology is rapidly evolving from
serving customers through bricks-and-mortar stores to now having to serve them from through a number of different
channels. Macy’s clearly understands generating increases in revenue is paramount and the key to success.
Macy’s will continue its plans this year integrating new strategies in omnichannel, localized merchandise
assortments and marketing. These strategies will continue to be integrated in both Macy’s and Bloomingdale’s to
meet customer demand.
Macy’s Omnichannel Outlook
In fiscal 2013, Macy’s Inc. announced it created the new senior executive position Chief Omnichannel Officer.
Robert B. Harrison appointed the new position, reporting to Terry J. Lundgren, CEO of Macy’s Inc. Macy’s Robert
B. Harrison will manage strategies to integrate bricks-and-mortar to online and mobile channels, working with
logistics and related operations.“2012 was another great year in our company’s evolving story of growth. The
numbers reflect our success in pursuing the right strategies, and executing them with conviction in every part of the
business with a talented team we consider to be the best in retailing,” said Terry J. Lundgren, chairman, president
and chief executive officer of Macy’s, Inc.
For the quarter, online sales at the company that also operates the Bloomingdale's chain of luxury stores, soared
47.7 percent. The retailer reported net income of $730 million, or $1.83 per share for the quarter that ended Feb. 2.
Excluding pretax expenses, it earned $2.05 a share, while analysts, on average, were expecting $1.99 a share.
52wk Range 32.31 - 42.18
Volume 4,119,182
Avg Vol (3m) 5,383,530
Market Cap 15.98B
P/E (TTM) 12.73
EPS 3.24
Div & Yield 0.80 (2.00%)

2. Online sales for Macy’s surged 51.7% in December 2012. Total sales revenues grew to 7.2% to $9,350 million in
the quarter from $8,724 million in the year-ago period. Macy's cash equivalents closed at $1,836 million, its long-
term debt at $6,806 million. Macy’s currently operates approximately 840 department stores in 45 states, the District
of Columbia, Guam and Puerto Rico.
Saks Omnichannel Outlook
Saks is about halfway through a three-year $100 million project to update its inventory management. Chief
Executive Steve Sadove stated on a conference call to analysts "There's no question in my mind that omnichannel
is the future of where retail is, that there is a brick-and-mortar play and a dot-com play." The retailer has had
challenges in its past. Saks has closed 10 department stores since 2010 and is looking to shut a few more. It currently
operates 43, in addition to its lower-priced Saks Off Fifth chain. The company also was affected by Hurricane Sandy
with consumer spending.
Saks for the 14 weeks and 53 weeks ended February 2, 2013 compared to the 13 and 52 weeks ended January
28, 2012, total sales increased 5.6% for the fourth quarter and 4.4% for the full year. For the fourth quarter ended
February 2, 2013, the Company recorded net income of $20.4 million.
Key Stock Data
Dividend Yield
SKS has not issued dividends in more than 1 year.
P/E Ratio
27.26 Trailing 12 months
Market Cap
$1.75 Billion
Shares Outstanding
151.33 Million
Public Float
94.41 Million

3. Stephen Sadove, CEO stated “We posted a 0.7% comparable store sales gain in the fourth quarter, essentially in
line with our expectation of relatively flat comparable store sales. This modest gain was on top of a very solid 7.7%
comparable store sales increase in the fourth quarter of 2011. When including a number of stores that were indirectly
affected by Sandy, Saks estimates that about 55% of its total revenue base was in some way hit by the multi-billion-
dollar hurricane.”
Net capital expenditures were of approximately $140 million to $150 million for the full year. Approximately $75
million relates to Saks Fifth Avenue store renovations and new vendor shops, and approximately $55 million relates
to Project Evolution and other information technology enhancements. The balance primarily relates to OFF 5TH
and maintenance capital. The planned increase over the 2012 spending level of $115 million primarily relates to
incremental Saks Fifth Avenue and OFF 5TH store renovations and information technology spending.
Consumer Demand
The new omnichannel consumers are able to research offers online, discuss information over video, have tablet
access to sales associates from the stores, and have abilities to shop in real time or make payments using their
mobile retail apps. Susan McPartlin, PwC’s US Retail & Consumer Sector leader states “As we enter an increasingly
complex retail landscape with accelerating competitive pressures and digital shopping options, retailers will need
to prepare for a wall-less omnichannel retail world, one where shoppers will come to expect a seamless brand
experience online, in-store and across multimedia touch points. This multi-format portfolio combined with the
proliferation of small, urban, alternative retail formats will pave the way for future growth, dismantling the mass
homogenization and scale assumptions that propelled two decades of retail growth.” Mobile retailer apps popularity
offered by the largest retailers increased 525 percent in December 2012 when compared with the previous year.
More than 18 percent of consumers used a mobile device to visit a retail store and 13 percent used a smartphone or
tablet to make a purchase. Over 95 percent of U.S. retailers have optimized their websites for smartphone traffic.
Investor’s Outlook
Omnichannel is a priority initiative for leaders in 2013. Omnichannel objectives for both Macy’s and Saks will
be the differentiation of its customer experience. Retailers will be investing in customer analytics, merchandising
planning, and digital marketing technologies. Converged operations across mobile, social, ecommerce and store web
based technology will be key and improvements in brand strength.