Evan Schuman's StorefrontBacktalk

Hoguet probably really is surprised. Maybe she shouldn’t be. With a cheap project, ROI is easy, which means store managers can afford to experiment. Do they add hours for part-time associates who then have the flexibility to shift to filling orders when things are slow in the store? Do they put trainees on a pick-and-pack shift until they know the store better? Do they rotate all associates through the back room to see how it settles out best? With no high project cost to justify, there’s less urge to micromanage to get ROI, and everyone is happier.

And every in-store technology improvement can feed this effort. RFID tags can improve inventory accuracy, which means the fulfillment logic that picks a shipping store does a better job. The same RFID tags can simplify finding the correct size and style quickly, which is crucial for Macy’s because the items being shipped are often coming off the store’s racks. Because the RFID’s ROI is already assumed to come from replenishment improvements, store-to-door gets that virtually for free.

Is this all part of a big plan? Almost certainly not. Big plans quickly grow complex. This approach is all opportunistic. Anything can be added, if there’s no added cost.

So when an analyst asked Hoguet whether Macy’s is “poised” to start doing same-day delivery through store-to-door, her answer—that “if we decide it’s an important need for the customer, I think we’re going to be very well positioned to do so going forward”—was blown up in some quarters into an imminent challenge to Amazon’s and eBay’s same-day delivery programs.

Will it be? Maybe. But for Amazon and eBay, same-day delivery requires commitment to a lot of build-out to create local distribution centers—lots of CapEx, lots of ROI. For Macy’s, adding local delivery from any particular store just requires finding a local delivery service. If things don’t work out with the service, it’s easy to drop.

Likewise, if Macy’s decides it wants to expand store-to-door beyond 290 stores, it’s just a matter of adding associate hours at each store involved. If it turns out a store isn’t worth the trouble, it will just turn off the lights in that room in the back and re-adjust schedules.

There is, of course, an endpoint to this lightweight planning, low incremental cost approach. But Macy’s doesn’t know where that is—and doesn’t have to know where it is. Macy’s doesn’t need a big plan—just a stream of small, incremental ideas that cost almost nothing to add or shut down, built on top of local stores where the rent has already been paid.

After all the disadvantages that physical stores have faced in dealing with E-Commerce, for once it looks like all that expensive real estate is actually an advantage.