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Macy’s, Sears, Borders: Is IT Braggable?

Written by Evan Schuman
January 6th, 2011

There isn’t a CIO alive who doesn’t understand the extreme value of technology to his/her chain. But how their fellow C-level execs perceive IT—and how corporate thinks that others perceive it—that’s where things get interesting, as the different approaches of Macy’s, Sears and Borders this week demonstrate.

Publicly held companies have to wrestle with a delightfully subjective concept known as material information. Its essence is, “would this information be something that would likely impact how an investor makes decisions?” On Monday (Jan. 3), Borders filed an 8-K form to the U.S. Securities and Exchange Commission, notifying the investing public that the chain’s CIO—D. Scott Laverty—had left Borders after about 20 months. And it said that he had resigned that same day. But in early November 2010, when Sears parted ways with its CIO—Timothy Kasbe—it felt the need to say nothing. No SEC filing, no news release or statement whatsoever.

What does that say about how much the two chains value IT? Is Sears saying that the loss of its IT chief wouldn’t make a difference to any investor? Does Borders see its technology as more strategic?

In a broader sense, is there a changing sense of technology’s importance to retail? We’re seeing many companies announcing vague IT investments that seem to trumpet little other than that they are indeed investing in IT. On Tuesday (Jan. 4), for example, Macy’s issued a statement that it will be adding 725 new positions for E-Commerce over the next two years.

What’s interesting about the Macy’s move is the rationale behind the statement. It didn’t announce any new initiative (such as “we’re going to make mobile integration with POS seamless, so we now need to invest millions more into POS” or “In an effort to make our stores more friendly to customers who speak Spanish, Japanese and Russian, we’ll be spending $40 million for native-speaking associates and tri-lingual kiosks”), nor did it say how the funds would be applied.

The only point of the statement seemed to be that it was investing in E-Commerce. Given that no one was suggesting Macy’s was somehow ignoring E-Commerce, was the point to simply trumpet that investing in IT will attract investors? Is IT suddenly sexy? The fact that Macy’s seems to believe that is how it’s perceived says much about how the chain values IT. And by acting that way, its IT forces are likely to feel much more appreciated.

The Macy’s investment was interesting also in the few specifics it offered. It’s hard to interpret 725 new positions as a maintenance move, even in the anticipation of ever-increasing online traffic. That’s especially the case because about 150 of the positions will likely be software engineers, according to Jim Sluzewski, the Macy’s senior VP in charge of corporate communications. The move reflects the need for many additional online programs that will have to be created, he said.

Said Macy’s CEO Terry Lundgren: “These expansions to macys.com and bloomingdales.com represent investments in merchandising, marketing and site development, which complement ongoing improvements in systems infrastructure, fulfillment capacity and customer service.”

A company’s belief that spending money to boost IT is a good reason to buy that company’s stock? Now that’s nice and material.


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