Macy’s is committed to helping its customers shop anywhere, anytime, and anyhow they choose, by leveraging the entire inventory of the company to satisfy demand: “buy anywhere, fulfill anywhere” model. By working with Tyco Retail Solutions and leveraging the TrueVUE™ RFID Inventory Visibility platform, Macy’s was able to establish a foundation of inventory accuracy in key replenishable product categories across all stores.

1. Mario Beltrami
May 2016
The Magic of Macy’s:
Leveraging RFID for
“Pick to the Last Unit”
Omni-Channel Fulfillment

2. 3© 2016 Tyco. All Rights Reserved. 3
$10+ Billion
Annual
Revenue
Market Leadership
R&D Spend:
$275 Million
Providing
Customer Value
Through Innovation
Strategic Customers
Global Support
Scale & Experience
57,000 Employees
// Global Leader in Technology and Innovation
Global Reach
Presence in 94 countries
50 Direct;
44 Indirect
Copyright © 2016 Tyco. All Rights Reserved.

3. 4© 2016 Tyco. All Rights Reserved.
Tyco’s Key Enterprise Solutions
Fire Protection Integrated Security Solutions
Electronic Article Intelligence
High Theft Solutions
Source Tagging Solutions
Traffic Intelligence
Video Based In-Store Analytics
RFID- Enabled Solutions:
// Inventory Intelligence
Integrated Store Performance
Professional Services
Retail Store Performance
& Loss Prevention
Supply, design, installation, monitoring,
maintenance and auditing services for:
Fire alarm and detection systems
Water based fire suppression:
Sprinkler, deluge & water mist
systems
Special Hazard Systems:
Foam, clean agent and inert gas
Mass notification systems
Emergency fire response
Mechanical products including valves,
piping and coupling for engineering
and design projects
Life Safety
Supply, design, service &
installation of:
Access control / Biometrics
Intrusion detection
Perimeter protection
Video surveillance
Security Monitoring
Command & Control (PSIM)
RFID, Real Time Location
Systems (RTLS)
Vehicle & Gate Management
Duress & notification systems
// Respiratory protection systems
// Thermal imaging products
// Gas and flame detection
// Personal protective
equipment
// Compressors
// Communication Systems

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One Company with a Portfolio of Flagship Brands
FIRE PROTECTION
ELECTRONIC SECURITY
RETAIL
LIFE SAFETY
Copyright © 2015 Tyco. All Rights Reserved.
GLOBAL INTEGRATED SOLUTIONS
AND SERVICES

5. 6© 2016 Tyco. All Rights Reserved. 6
$1B
Business Unit
Market
Leadership
Solution
Portfolio
Global
Customers
Scale &
Experience
With nearly
of excellence in retail, we
have the expertise to
understand your needs, the
technology to meet them,
and the comprehensive
technical, professional and
support services to ensure
your long-term success.
Tyco Retail Solutions // Industry Impact
Global
Reach

6. 8© 2016 Tyco. All Rights Reserved.© 2016 Tyco. All Rights Reserved.
8
IBM RFID Prediction – Nine Years Ago

7. IBM RFID Prediction – Nine Years Ago

8. © 2016 Tyco. All Rights Reserved.
Agenda
10
Summary
Welcome to Macy’s
Aligned with the Customer, Prepared for Growth
The Challenge
The Solution
Macy’s «Pick to the Last Unit» Program
The Results

9. 11© 2016 Tyco. All Rights Reserved.
Summary
Increased sales & margin
Reduced markdowns
Enhanced customer experience
Industry: Department store
Solutions: RFID Inventory Visibility
Benefits: Improved inventory accuracy &
visibility
Inventory optimization
Omni-channel fulfillment

10. 12© 2016 Tyco. All Rights Reserved.
Welcome to Macy’s
• Established 1858, New York City
• Retailer with nearly 800 stores + online at macys.com
• Sales of over $28B
• Its famous flagship located at Herald Square in New York
City is known as the “World’s Largest Store,” with over
1.1 million square feet of retail space
• Shopping experience: the customer is paramount, as in
the brick & mortar stores as online

11. 13© 2016 Tyco. All Rights Reserved.
Aligned with the Customer, Prepared for Growth
• Macy’s is committed to helping its customers shop
anywhere, anytime, and anyhow they choose, by
leveraging the entire inventory of the company to satisfy
demand: “buy anywhere, fulfill anywhere” model
• M.O.M. “My Macy’s merchandise assortments, Omni-
channel integration, and Magic Selling customer
engagement”

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“You don’t want to
make decisions
based on bad data”
Peter Longo, Macy’s President
of Logistics and Operations

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The challenge
• Inventory degradation occurs at a rate of about 2-3% a month
stating
• Item-Level RFID: to help ensure inventory is optimized across
the entire enterprise
• By working with Tyco Retail Solutions and leveraging the
TrueVUE™ RFID Inventory Visibility platform, Macy’s was able
to establish a foundation of inventory accuracy in key
replenishable product categories across all 800 stores

15. 17© 2016 Tyco. All Rights Reserved.
The solution
• The overall changes to inventory management in support of
this omni-channel strategy have enabled Macy’s to reduce
$1B of inventory from its stores
• The company realized that brick and-mortar stores could be
their greatest asset for single unit orders, essentially
functioning as robust and flexible “warehouses” to utilize the
full assortment of owned inventory. With item-level RFID,
Macy’s can focus on assortment and service while using their
existing inventory to address fulfillment demands

16. 18© 2016 Tyco. All Rights Reserved.
Gather new insights into the
sources of fraud, shoplifting
and internal theft.
Achieve real-time inventory
visibility to improve inventory
accuracy and operational
efficiency.
Attain increased
shopper visibility
by capturing and
analyzing customer
traffic patterns in and
around the store.
Complete In-Store
Visibility Solutions
Connecting Data and
Devices and across all
Solutions Sets to a Single
Integrated Platform
Reducing Theft and
Improving Store
Operations
Copyright © 2014 Tyco. All Rights Reserved.

17. 19© 2016 Tyco. All Rights Reserved.
Macy’s «Pick to the Last Unit» Program
• P2LU for omni-channel fulfillment attempts to ensure
that the last unit of an item in any store is able to be
easily located and made available for sale
• The success of this strategy is possible due to the
inventory accuracy and visibility enabled by RFID
technology

18. 20© 2016 Tyco. All Rights Reserved.
The Results
• The use of RFID has been a game-changer for Macy’s in
driving inventory accuracy which is critical to execution
and omnichannel fulfillment
• In addition to sales lift on regular and first markdowns
with the rollout of RFID, Macy’s has reduced inventory
costs by lowering interim inventory requirements by one
third

19. 21© 2016 Tyco. All Rights Reserved.
Macy’s RFID Journey
• Inventory count 1x / year
• Inventory accuracy deteriorates
2-3% per month
• Inventory accuracy 60-70%
BEFORE RFID
• 1x / year & can cycle count up to
24x / year
• Achieve nearly 99% accuracy
w/annual inventory
• Annual inventory accuracy 95%
• RFID categories out performed
non-RFID categories with avg.
10% sales lift
WITH RFID
• B2F – Back to Front, Sales Floor
Replenishment
• Increased sales and margins,
reducing MDs
• 1/3 reduction in basic stock
required on-hand
• Improved display compliance from
avg. 65-70% to nearly 100%
• P2LU – Pick to the Last Unit
• Leverage 15-20% of store
inventory that exits in single units
• Omni-channel readiness enabling
$1B reduction in store inventory
• Sales lift on regular & 1st MD
merchandise
BEYOND
REPLENISHMENT
Peter Longo
Macy’s, President,
Operations and Logistics -
January 2015
RFID is your foundational ‘air supply’
to deliver an omni-channel promise.
Source: GS1 panel discussion -- January 13, 2015 at NRF Big Show

20. 22© 2016 Tyco. All Rights Reserved.
Age of Amazon:
Challenges & Opportunities
Source: RIS / Gartner Retail Technology Study 2016
1.
Developing personalized
marketing capabilities 51%
2.
Network and IT systems
security 47%
3.
Leveraging social media
(for sales, CRM, hiring,
customer service, etc.)
46%
4.
New payment technologies
(EMV, contactless, mobile,
etc.)
45%
5.
Expanding unified
commerce (omnichannel)
initiatives
44%
Top 5 major strategies
over the next 18 months
Top 5 challenges
over the next 3 years
1. Customer data security 49%
2.
Retiring legacy
systems 46%
3.
Optimizing digital
commerce as growth
channels
39%
4. Application integration 35%
5.
Optimizing stores as a
growing channel 29%
Investments in technologies that improve the
retailer’s ability to meet customer
expectations, exploit innate strengths,
overcome weakness and disintermediate
others, will move the needle.
Make wise choices.

21. 23© 2016 Tyco. All Rights Reserved. 23
Technology Will Continue to Disrupt the Store

22. 24© 2016 Tyco. All Rights Reserved.
Mario Beltrami
RFID Presales Support
mbeltrami@tycoint.com
+39 328 4208713
Thank You