As online giant Amazon.com Inc. charges into the $300 billion U.S. apparel market, Macy’s Inc. is running for the dressing room.
Even Macy’s acknowledges there’s little it can do to keep customers from shopping online for basic clothing -- like T-shirts, men’s jeans and tighty whities. Yet the department store chain is clinging to the idea that many consumers will want to try on other kinds of apparel, such as bikinis, bras and high-fashion items, before making a purchase.
So the company is using high-tech gadgets like tablets to upgrade fitting rooms, leaning on one of the few advantages that brick-and-mortar retailers have over Web-only stores.
“That is the one weapon they have against Amazon,” said Bridget Weishaar, an analyst at Morningstar Investment Services. “When you’re shopping for certain things, you’re going to want to try it on and see it on you.”
Amazon, which has wooed shoppers by offering speedy delivery and low prices, is disrupting the clothing industry. Its apparel and accessories sales will more than triple to $52 billion by 2020 and reach 14 percent of the market, according to estimates by Cowen & Co. In the process, Amazon will supplant Macy’s as the No. 1 apparel retailer in the U.S. in two years, Cowen said. Yet Amazon has nowhere for customers to see how they look in the latest styles.
As part of its effort, Macy’s recently revamped its fitting rooms in the women’s swimsuit and athletic department at its Manhattan Beach, California, store. Macy’s is using technology - - smartphones and company-provided tablets -- to make it easier for customers to try on items without having to leave the dressing room or ask a sales clerk for more help.
The company won’t say whether it will expand the trial to other locations. Even so, a successful test could be replicated elsewhere in the 885-store network.
Shoppers browse swimsuits and yoga pants displayed on mannequins. When a style looks interesting, they use a Macy’s app on their smartphones or the tablets to select their sizes. The items are delivered to a fitting room through a chute. Once in the fitting room, customers can request more sizes and other items using the app.
The result is that shoppers spend more time browsing and less time undressing, redressing and rummaging through racks, increasing the likelihood they’ll find something to buy.
The closest option from online-only retailers is to deliver many items to a customer’s home knowing that almost all of them will be returned -- at a substantial cost to either the retailer or the customer.
The bout pits Amazon’s extensive clothing inventory -- Cowen estimates 19 million items compared with Macy’s 85,000 -- against the retail chain’s abundant stores. Clothing, accessories and cosmetics account for 84 percent of Macy’s $28.1 billion in department-store revenue, making it a critical area to defend as the company fights sluggish sales growth by closing stores.
Amazon declined to comment on the issue. The Seattle-based e-commerce company’s list of best-selling clothing skews toward men’s jeans, shorts, golf shirts, underpants and socks. Amazon offers free returns on many clothing items for Amazon Prime customers, who pay $99 a year for membership. Customers still must purchase the clothing first and get their money back later.
Vicky Hernandez, 48, recently ordered a bunch of swimsuits online and returned them all. For swimsuits, she said she preferred Macy’s Manhattan Beach fitting room.
“I came here and loved how easy it was to pick different sizes and to return the ones that didn’t fit, especially since I usually come here during my lunch break,” said Hernandez, who works in the area as a data manager.
Macy’s likely will expand the trial to lingerie, allowing shoppers to try on what they want without having to interact directly with sales associates or hunt the racks for intimate apparel, spokesman Jim Sluzewski said. The swimwear trial had a “fair amount of use,” he said, without disclosing specific sales figures.
The cost of retrofitting Macy’s Manhattan Beach store was minimal, said Nadia Shouraboura, a former Amazon executive who founded Hointer, a Seattle-based company that helped the department store chain revamp its dressing rooms. The companies converted an old storage room into a mini-warehouse and cut holes in the fitting-room walls for the chutes.
Keeping the cost to about $200 per fitting room speeds the return on investment, she said. Tablets minimize staff costs, allowing one person to get inventory in the mini-warehouse for several shoppers at a time, she said.
Shouraboura monitored the dressing-room activity from her tablet during a recent visit. She watched as customers entered fitting rooms with one or two items and within seconds requested a dozen more.
“E-commerce will win on simple things, and apparel is not simple,” Shouraboura said. “It has too many size dimensions and feel dimensions. Online they look exactly the same and you can’t differentiate at all.”