Credit card data pulled from Macy’s to avoid taking excess inventory

October 06, 2022

Macy’s competitors have been forced to pack and hold large amounts of excess inventory, but the department store giant says it has been able to avoid this scenario in many cases by paying close attention to its card data. co-branded credit.

The retailer is heading into the holiday season with more than half of its merchandise being new, according to The the wall street journal. Not a complete success, but an improvement over Kohl’s, according to the article, which placed large orders at the start of the year just as consumers began to cut spending on discretionary items.

Macy’s was able to identify some key consumer trends in early 2022 that allowed it to cancel orders and adjust spending on merchandise requested by its customers.

Leaders from various departments began meeting monthly in January and discovered data from its co-branded credit card indicating consumers had increased spending on food and gasoline due to rising inflation. They also found that consumers have started to spend more on travel and entertainment away from home. The group also determined that demand for work and formal wear was increasing as people returned to their offices and attended social events, such as weddings.

Macy’s, according to the Logwas able to adjust its orders more easily than many of its competitors, as it sells a lower percentage of private label merchandise, forcing retailers to appropriate merchandise ordered earlier in the production cycle than with brands exterior.

The department store was successful, at least relative to Kohl’s, according to Citi retail analyst Paul Lejeuz, who found Macy’s sales-to-stock gap was much closer than its rival.

Macy’s and Kohl’s have joined a list of retailers that have been forced to deal with inventory issues as demand dwindles. Target, Walmart and others have canceled orders this year as they attempt to scale their inventory.

Chains are expected to ramp up their discounts this holiday season, with, Target and walmart all kicking off pre-Christmas sales in October and pressuring other retailers to follow or fall behind.

DISCUSSION QUESTIONS: Are some retail forecasting systems missing important data to project future consumer activity? How do you explain forecast failures in 2022 as more retailers rely on machine learning and artificial intelligence to make decisions?


“This trend is really gaining momentum in retail, and I’m thrilled to see Macy’s bringing attention to this capability.”

“It’s a combination of information, art and science that must be applied with the right parameters at the right time to make decisions.”

“Most retail forecasting systems don’t run out of data – the data just isn’t being leveraged. It’s a trust issue.”