NEW YORK — In a dramatic buildup of its online operations, Macy’s Inc. will add 725 positions at macys.com and bloomingdales.com. over the next two years.
Macy’s said it was the single biggest growth maneuver to date in the 15-year-old online operation. Macys.com was launched in 1996 as an information-only Web site but later that year started selling merchandise. Macy’s relaunched the site in 1998, recognizing the potential of the channel. Bloomingdales.com was launched in 2001.
The announcement has broad implications for the retail industry, which in the past two years has done more firing than hiring but now sees e-commerce as the biggest avenue for growth.
“Macy’s is just the tip of the iceberg. What you see happening here is going to accelerate throughout the industry,” said Les Berglass, chief executive officer of Berglass+Associates executive search firm. “E-commerce represents the greatest need for talent, relative to its size, both for top talent and the folks to support this talent.”
According to Berglass, brick-and-mortar retailers experienced a 25 percent average increase in their e-commerce business this holiday season, more than double their overall increases. “Add smartphones, iPads and soon-to-be-released new versions of the tablet, the growth accelerates even more,” Berglass said. “While e-commerce now is 10 percent of the retail universe, it accounts for more than 20 percent of our search practice today.”
Macy’s said the recruitment drive for its online businesses centers around midlevel positions and lower — rather than senior level. “There are a lot of young people coming out of college excited about the new vistas in retail,” said Hal Reiter, ceo of Herbert Mines Associates, another executive search firm. “At the senior level, there is always a challenge of recruiting. But in this case it will be eclipsed by the excitement of the opportunity. It won’t be a traditional war for talent.”
Terry J. Lundgren, chairman, president and chief executive officer of Macy’s Inc., said the recruiting for macys.com and bloomingdales.com will be across merchandising, marketing and site development, complementing ongoing improvements in systems infrastructure, fulfillment capacity and customer service. “This is a business that thrives on unrelenting creativity and innovation,” Lundgren said. “Having the right talent in the right place is vital as we seek to sustain and accelerate our sales growth online, as well as in the stores.” Lundgren said Macy’s Inc. would build “one of the largest, most efficient and resourceful e-commerce organizations in American retailing as part of our comprehensive omni-channel strategy.”
In the 2006 to 2008 period, Macy’s made another big maneuver online, investing $300 million to scale up online operations, including delivery efficiency, functionality of the Web sites and customer service.
“The substantial investment in the e-commerce business by increasing personnel just reinforces Terry Lundgren’s previous commitment to the sector,” said Elaine Hughes, president of executive search firm E.A. Hughes & Co. “He bet on the success of Macy’s e-commerce business when there was an overall decline in retail sales. His bet proved successful, and he put Macy’s at the forefront of combining a national direct-to-consumer distribution with a traditional retail experience.”
Macy’s Inc. doesn’t specify the volumes for its two Web sites, but combined they exceeded $1 billion in 2009. Total Macy’s Inc. revenues were $23.5 billion in 2009. In the first 10 months of fiscal 2010, Macy’s online sales rose 29 percent compared with the same period the previous year. In 2009 and 2008, online sales grew 20 percent and 29 percent, respectively. “It really doesn’t matter to us where the transactions take place,” said Macy’s corporate spokesman Jim Sluzewski. “What really matters is giving the customer a 360-degree view of both brands so the customer can access Macy’s and Bloomingdale’s in the way they prefer at any given point in time.”
There was some speculation Macy’s was pouring resources into its Internet operations at the expense of renovating the Herald Square flagship here, where a major overhaul is contemplated. “That’s not necessarily the case,” Sluzewski said. “These are expense dollars associated with a revenue-generating business, p&l [profit and loss] dollars, not capital dollars. Dot-com are separate organizations. People building Web sites are not people designing stores.”
Regarding the flagship, Sluzewski said: “We continue to improve it and make plans, but there is nothing new to report at this point.”
Macy’s said it will set up a dedicated microsite for people to apply for online jobs by the end of this month. Macy’s also expects people to be able to apply for positions at macys.com via a mobile device and to register for e-mail notifications. Macys.com information will also be available on certain social-networking sites by early spring.
Over the next two years, macys.com’s merchandising and marketing organizations in New York will add about 260 positions. Macy’s has leased additional space at 1440 Broadway, where there are currently 420 macys.com associates, to accommodate the growth.
Also, macys.com will expand its site development and operations teams in San Francisco by 200 positions and has increased its space at 685 Market Street near Union Square, where there are currently more than 300 macys.com associates.
Bloomingdales.com expects to expand its merchandising, marketing and operations organizations in New York by about 115 positions and is negotiating a lease for additional space in Midtown Manhattan. There are currently about 200 bloomingdales.com associates.
Macy’s Systems & Technology organization, supporting the macys.com and bloomingdales.com e-commerce technology platform, expects to add about 150 positions at its central campus in Johns Creek in suburban Atlanta, bringing the total to more than 1,200 employees. The company is purchasing its office location at 5955 State Bridge Road and expanding there.
Overall, the company expects to add nearly 3,500 full-time, part-time and seasonal holiday associates in the next two years to its online businesses. This includes a new online fulfillment center to be built near Martinsburg, W.Va., and the expansion of a fulfillment center near Portland, Tenn., both previously announced.