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BM255 CASE STUDY 3

Macy’s: Omni-Channel retailing
After selling for decades from its department stores, Macy’s has made a big push into omni-
channel retailing, allowing customers to have a seamless experience between shopping online or at a
store. Customers can browse online and then experience the product at a store or order online after seeing
a product at the store. Omni-channel is not just about ordering, however; it is also about fulfillment.
Orders placed on any channel have access to Macy’s entire assortment. By 2012, Macy’s had
equipped 292 Macy’s stores to fulfill online orders or orders from other stores that were sold out of a
particular item. If customers desire, orders placed online can be picked up at select stores and items
purchased online can be returned to stores.

1. What is the main focus of Macy's big push into omni-channel retailing? (1
mark)
Streamlining the order fulfillment process?????? 🥸💀

2. Should returns be kept at a store or sent to a fulfillment center? (1 mark)

See migu bahh

3. Describe the concept of omni-channel retailing and explain why it is important

for businesses like Macy's. (5 marks)
Omni-channel retail aims to fulfill customer orders through a variety of channels,
allowing customers a seamless connection between their shopping experiences across
them so they can utilize many channels simultaneously. Customers can integrate
customer data, enabling them to shop whenever and wherever they choose, and
merchants can access their omni-channel consumption data in real time whether they
browse physical stores in person, shop online using computers or mobile devices, or
browse retailers' social media pages. Omni-channel retail is very important to Macy's,
which not only brings profits to businesses, but also provides convenience for all
customers. Through various channels to interact with customers and meet their orders,
Macy's can track the interaction of all channels, and then more comprehensively
understand the identity and needs of customers, and obtain the information of their
purchase requirements. This information can help them optimize marketing strategies
and improve customer service, so as to meet their fulfillment. In addition, the most
important thing is that customers can buy products from Macy's more easily, thus
Macy’s can save cost. For example, if a customer likes a certain product through omni-
channel retail, such as browsing the product introduction of the live broadcast platform,
then they can directly order it online or by telephone.

4. Discuss the benefits of allowing customers to pick up online orders at select

stores and return items purchased online to stores. How does this contribute to
the omni-channel experience? (5 marks)
Offering customers the option to pick up online orders at select stores and return items
purchased online to stores can contribute a number of convenience and flexibility to the
omni-channel experience. Customers are able to pick up their orders anytime and
anywhere that is convenient for them to go. They also don’t have to worry about their
parcel being delivered while they are unavailable. Besides, customers can avoid the risk
of their parcel being stolen or damaged. If they have any problems regarding their
orders, they can directly contact the staff to solve the problems. By allowing customers
to return items purchased online to stores, customers can return items that they’re
dissatisfied with directly to the shop and receive a refund or exchange immediately.
They don't have to worry about packing the item and going to the post office just to
return the item, which things much easier. With all of these benefits, it can positively
impact the company’s reputation and lead to customer satisfaction. Customers most
likely will visit the store again and recommend the retailer to other people. Lastly, when
the customers return the items back to the stores, the staff may identify the issues of
returning items and take appropriate action against them.

Between Walmart and Macy’s which company are performing better ? Justify
your answer. (5 marks)
Between Walmart and Macy’s company, Walmart appears to be performing better in
various financial and operational aspects, such as in Return on Assets(ROA), Return on
Equity (ROE), Return on Fixed Liabilities (ROFL), Profit Margin, Asset Turnover,
Account payable turnover (APT), Account receivable turnover (ART), inventory turnover
(INVT), and Property, Plant, and Equipment Turnover (PPET). According to the result, a
better ROE indicates that Walmart is giving its stockholders better returns. As a result,
Walmart has a higher ROE which shows that it is more effective at making money off its
assets. A greater ROE also shows that Walmart has succeeded in its goal more
successfully than Macy's because shareholders normally invest in a company to obtain
a return on their investment. Besides that, a negative Cash-to-Cash (C2C) cycle like
Walmart's is more favorable because it means they receive cash from customers before
they need to pay their bills. In contrast, a positive C2C cycle, like Macy's, means they
must pay their bills before receiving cash from customers, which can tie up their money
for a longer time. Therefore, Walmart is better because it's exceptionally efficient at
converting investments into cash, while Macy's takes longer.

Topic 04 Zara: Apparel Manufacturing and Retail (20 Marks)

1. Being highly responsive to changing trends
2. Zara primarily manufactures in Europe and Asia. ( 👍
3. By investing in information technology for sales data analysis ( 👍
4. 解释 Zara 实现对不断变化的流行趋势做出快速反应的任何三 (3)个策略，以及它与传
统服装制造商有何不同？
The manufacture of Zara is split between Asia and Europe. They produce
commodities with uncertain demand in Europe, while Asia produces more
predictable ones. Zara can efficiently manage their production costs and quickly
adapt to local trends. However, traditional manufacturers often depend too much on
Asia, which makes their production processes slower and less flexible. Therefore,
the lack of flexibility of traditional manufacturers makes it difficult to quickly adjust
their production plans to adapt to market changes. Next, Zara stands out by
producing over 40% of its goods and conducting most in-house production during the
sales season. This in-season production reduces the risk of creating an excess of
unpopular items. In contrast, some traditional apparel manufacturers produce the
majority of their inventory before the season starts. Traditional manufacturers usually
need to plan and produce clothes in advance, because they usually bear large
inventory risks to adapt to seasonal sales, so products will be manufactured in the
sales season in advance. However, just because they have to decide and produce
clothes several seasons in advance, this leads to a long design-to-sales cycle. Zara
distributes products from eight distribution centers in Spain to the whole world. The
average delivery time of European stores is 24 to 36 hours, and the longest delivery
time of American or Asian stores is 48 hours. This enables Zara to move new
products from design to sales more quickly and meet the needs of customers all over
 the world. Usually, the distribution center of traditional clothing manufacturers is
usually located in the production place, and their distribution center usually adopts
the mode of mass production, which enables them to produce a large number of
products at a lower cost, such as saving transportation costs. However, this
approach may also lead to the problem of overstocking and the inability to keep up
with fashion trends.

5. Firstly, it can reduce shipping costs by sourcing from Europe for European markets as
well as Asia for Asian markets, they can lower shipping expenses which resulting in
more cost-effective products for local customers. This will lead to a competitive
advantage for Zara’s business. Secondly, when Zara source from both Europe and Asia,
they can look at the local job markets. This allows them to hire skilled workers in
different places and change their sourcing decisions if wages or the job market
conditions change over time. Thirdly,

（你看需不需要换掉 or 塞进去，我觉得你的有点点怪怪所以不敢乱塞）
Through research, the living standards and labor laws in European countries are
relatively high, which will lead to relatively high production costs in Europe, including
high labor costs and raw material costs. On the other hand, Asia has relatively low
production costs, including relatively low labor costs and raw material costs, which will
affect that some countries in Asia can provide relatively cheap labor and raw materials.
For example, China, India and Indonesia can produce low-cost fabrics for Zara
manufacturing. As a result, Zara can distribute production to different regions by
comparing the cost differences between the two sides, and decide where to manufacture
according to the product characteristics and market demand, thus reducing the total
cost.

Due to the high labor cost and raw material cost in Europe, the production will certainly
be able to quickly respond to products with uncertain demand, such as new or limited
fashion trends and styles. This enables Zara to manufacture and launch these products
more quickly to meet the ever-changing market demand without mass production in
advance, thus reducing the inventory risk. In addition, because of the lower cost in Asia,
production can meet the demand of more predictable products, such as a large number
of basic styles and traditional styles. These products usually have a more stable market
demand, so manufacturing in Asia can reduce production costs while ensuring supply.
Zara can adjust the production plan more flexibly and optimize it according to the
 product type and market demand. This means that they can better meet the needs of
different product categories without being limited by fixed production capacity.

Zara distributes goods to stores around the world from eight distribution centers in
Spain. The average delivery time in European stores alone is 24 to 36 hours, while the
longest delivery time in American or Asian stores is 48 hours. This means that Zara can
launch new styles before its competitors and attract consumers' attention. In addition, it
also means that this stable global supply chain can meet the needs of consumers in
every region, and Zara can quickly respond to market demand and bring the fastest
distribution to consumers in every region to meet their needs.

6. In my opinion, Zara's strategy for inventory management and sourcing products

is likely to be sustained in the long term. By utilizing both inexpensive Asian and
European manufacturers, Zara's business model reduces costs and enables the
company to respond rapidly to market changes. Moreover, through the
distribution centers around the world, rapid distribution enables customers to get
their favorite products faster, thus improving customer satisfaction. Customers
are usually more willing to buy the new products they are eager for than wait for
a long time. For example, if a customer sees a new dress online and immediately
decides to buy it, they hope to receive the goods as soon as possible. Zara's
rapid delivery can meet this demand, thus improving customer satisfaction. As
long as these approaches remain more cost-effective and efficient than other
alternatives, it should continue to be effective.