NEW YORK (TheStreet) -- To get its sales and profits back on track, department store retailer Macy's (M) is trying to work a little magic not in its sprawling stores but in the wide-open digital arena.
"We are focusing on things like how quickly a Web page loads on our Web site and how we provide information on a mobile device -- we think the consumer is looking for choices in how they interact with us and in terms of convenience," said Macy's chief omnichannel officer Robert B. Harrison in an interview. For Harrison and his team of product merchants and tech wizards, that means trying to respond to and shape how people will want to shop in the future.
Macy's is in the process of enhancing its mobile wallet, so as to enable a consumer to upload coupons ahead of a store visit. The Macy's customer, who has historically enjoyed snipping coupons before heading off on a weekend splurge, will be weaned off paper via the improved mobile wallet. That new feature could also help Macy's track which promotions have consumers responded to the most and when -- aiding in future marketing plans.
Another area that Macy's is exploring is on-demand delivery. Companies such as Starbucks (SBUX) Whole Foods (WFM) and Chipotle (CMG) have partnered with outside firms to offer same-day delivery services so customers can shop for food and other products whenever and wherever they want.
Last fall Macy's rolled out same-day delivery service to customers in eight major U.S. markets -- Chicago, Houston, Los Angeles, New Jersey, San Francisco, Seattle as well as San Jose, Calif., and Washington, D.C. The company's Bloomingdale's division offers same-day delivery to customers in four major markets -- Chicago, Los Angeles, San Francisco and San Jose, Calif. Deliveries to customers are being powered by a third-party firm called Deliv.
Harrison said Macy's would shortly announce same-day delivery services in additional cities.
In a significant move in 2012, Macy's stopped breaking out online sales as distinct category from in-store sales in reporting its results. According to a spokesman, "Frankly, we don't know how to do so -- ours is an omnichannel business, so if a customer spends an hour shopping online for a mattress, then goes to a store to [lie] on the chosen mattress before buying it in a store, is that on online sale or a store sale? So it is one seamless business today, with no sense in trying to break it apart."
The renewed focus on digital sales by Macy's follows a reorganization earlier in the year that executives admit became bit of a distraction in the first quarter.
In January, Macy's announced it would close this year 14 stores -- a move that along with restructuring its field operations, was expected to save about $130 million in 2015. A good chunk of these savings is being reinvested in developing a crop of outlet stores called Backstage, as well as opening new Macy's stores and bolstering the company's tech talent and capabilities.
Net sales for Macy's in the first quarter dropped 0.7% from a year earlier to $6.2 billion, below analyst's expectations, even as same-store sales declined by 0.1%. Macy's stock performance has lagged that of the Dow Jones Industrial Average and S&P 500 for much of the year prior to speculation in late May about potential real estate sales. At the market's close on Thursday, Macy's shares were priced $68.92, showing a rise of .55% for the day and 4.82% for the year thus far.
Analysts are banking on Macy's digital initiatives paying off financially for the longer term and rejuvenating the stock price.
"The clear market share leader in the department store space -- we believe Macy's can, and will, continue to win through focusing on its own strategy (brands, price, quality trio) and through internal initiatives (My Macy's, omnichannel, Magic Selling)," said JP Morgan analyst Matthew Boss in reiterating an overweight recommendation on Macy's shares in April.
When asked whether Macy's might soon have a robust Apple Watch app by Apple (AAPL) to help it drive sales, Harrison said that was unlikely.
"To build an experience specific to an Apple Watch is probably not where I am going to spend a lot of time in the near-term because despite the success they are having, it has a small base," said Harrison. "I'd rather focus on the experience on an Apple phone and Android."
Harrison added, however, "If we had the opportunity to sell Apple Watches, I am sure my merchants would be interested."