Macy’s new media network is a growing income stream, execs say
Last year, Macy’s quietly launched its own retail media network, working with advertisers to provide Macy’s shopper data. The program, called Macy’s Media Network, began in August and has already grown to generate more than $35 million annually as a new income stream for Macy’s, according to CEO Jeff Gennette.
“We are also continuing to build on our customer value ecosystem, which would be loyalty, monetization and personalization enabled by our Star Rewards Loyalty Program,” Gennette said on a conference call today to discuss Macy’s fourth-quarter earnings. “In August, we grew this ecosystem by launching the Macy’s Media Network to connect strategic brand partners to our customers, which created a new fashion and beauty publishing model.”
He expects that programs like the media network, coupled with more customers using the loyalty program and Macy’s credit card, will lead to “up to $60 million in monetization income in 2021.”
A Macy’s spokesman said the program is run through a specialized in-house advertising team, and includes targeted retail media such as website display ads and sponsored products, as well as offsite digital and physical media ads.
The long-struggling department store chain is one of a host of retailers recognizing the value of their own customer data for outside advertisers. Last year alone saw the rollouts and expansions of media networks from retail giants such as CVS, Walgreens and Home Depot. Experts expect more of such programs on the horizon as marketers try to monetize their shopper information into new revenue streams.
This week, Macy’s reported fourth-quarter earnings that topped its own expectations, though the chain is still playing catch-up as the pandemic continues. Net sales, at $6.5 billion, were down 18% over the year-earlier period. Same-store sales declined 17% for the quarter, but digital sales were up 21%. Digital sales accounted for nearly 40% of revenue in the period. Macy’s said it generated $160 million in net income for the quarter.
Executives said the company is making good on its promise to recruit younger shoppers, something Macy’s has struggled with as recently as late 2019. In the fourth quarter, Macy’s counted 7 million new customers, and many of them were under 40 years of age, Gennette said.