Impact of Technology on Customers - Essay Example

Impact of Technology on s - the case of Macy’s Impact of Technology on s - the case of Macy’s Introduction Most commonly, the potentials of organizations to stabilize their position in the global market are depended on their ability to identify strategies that will offer them a competitive advantage. The introduction of new technology can help to the achievement of the above target under the following terms: the technology involved is carefully chosen, taking into consideration the firm’s internal and external environment and its available sources; also, it is necessary that the benefits expected are in accordance with the cost of the whole project, meaning that investing a significant amount of money on new technology could cause severe losses for the organization if the relevant investment is not paid back within a particular period of time. Current paper focuses on the new technology that Macy’s introduced to its customers. This technology incorporates a wide range of advanced technological features, such as digital receipts and free Wi-Fi. The initial responses of the firm’s customers to this technology seem to be positive, at least as revealed through the reports developed in regard to this issue. In the near future, a more accurate view of the effectiveness of new technology introduced in Macy’s would be available. Taking into consideration the existing findings in regard to this project, as presented below, it could be noted that the particular initiatives have significantly supported the performance of the organization helping towards the improvement of its relationship with its customers. 2. New technology in Macy’s In Macy’s the introduction of new technology was considered as the most effective method for improving the relationship between the firm and its customers. The term ‘new technology’, as used in the case of Macy’s refers to a wide range of features of advanced technology and not to just one technology. In this way, it is expected that the firm will acquire an advantage towards its rivals, a target that has been achieved, as proved by the performance of the firm up to now. Currently, the firm’s stores have been estimated to 850, operating under the name of Macy’s and Bloomingdales (Business Wire 2011). The successful implementation of new technology in all the firm’s stores can be characterized as a challenging task, even if the capital availability of the organization is significant, taking into consideration the fact that in 2010 the sales of the firm reached the $25 billion (Business Wire 2011). 2.1 Overview of technology introduced in Macy’s for increasing customers’ satisfaction The new technology that Macy’s introduced to its customers has the following forms: ‘free Wi-Fi, digital receipts, cosmetics kiosks and computer tablets for product demonstrations and furniture deliveries’ (Chang 2011). In addition, the Backstage Pass is a scheme offering to the firm’s customers the chance to use their mobile phone for being informed on a series of critical issues related to fashion and the market trends, as reflected in the firm’s products (Veras 2011). Through these initiatives the managers of the organization aims to increase customer satisfaction, thus to develop the firm’s existing customer database. At the same time, efforts are made so that RFID technology is established in all the firm’s stores (Macy’s 2011, press releases). In this way, it is expected that the management of ‘item-level merchandise inventories’ (Business Wire 2011) will become more effective, allowing the firm to respond on time to all its customers’ orders. More specifically, through the RFID technology the following two benefits will be achieved: the inventory accuracy will be increased, reaching even a percentage of 97% (Business Wire 2011); moreover, the RFID technology can help the firm’s employees ‘to count inventory faster’ (Business Wire 2011) completing faster all pending orders. It should be noted that not all these features are available in the firm’s stores. The above fact can be explained as follows: certain of these features are quite complex and demanding, either in their installation or in their monitoring; in this way, they require a particular period of time for being fully established in all the firm’s stores. For confronting this problem the firm’s managers have chosen to introduce these features gradually, ensuring that failures are avoided, as possible, and that the target of the particular initiatives, i.e. the increase of customer satisfaction, will be fully achieved. 2.2 How Macy’s introduced the new technology to its customers The introduction of the new technology to the firm’s customers has been developed in the following way: by visiting the firm’s stores customers can enjoy the new technology features the firm launched for improving customer satisfaction. For example, customers can access the Backstage Pass through their mobile devices when they are within the firm’s stores; the relevant code exists across the stores that have launched the particular scheme. In the specific case, a free QR reader application is provided to the customers (Veras 2011); through this application customers can enter the scheme and get informed for all new market trends, meaning the trends on which the firm’s products are based. Also, the digital receipts (another advanced technological feature available to the firm’s customers) are available to customers as follows: after having paid for the firm’s products the customers can choose to have their receipt e-mailed to them (Chang 2011). Free Wi-Fi is also available within the firm’s stores, even if the particular initiative is still in progress, meaning that this feature is not still available in all the firm’s stores (Chang 2011). As for the RFID technology, the details of the particular project are still under processing. In accordance with the above, the firm introduced new technology to customers using their physical presence within its stores. In other words, in order for customers to have access to all these initiatives it is necessary for them to visit one of the firm’s stores; this criterion should be reviewed in the near future, aiming to further improve the relationship between the firm and its customers. 2.3 Ways that added value from the new technology was proven The most effective way for understanding the performance of new technology introduced to the firm’s customers is through the organization’s financial performance. In the Graph 1 below, the performance of the firm’s stock for the last 3 years is presented. It is clear that for the last three years the growth of the organization has been continuous, a fact that indicates the potential of the firm to increase its competitiveness towards its rivals; the introduction of new technology has contributed in the achievement of this target. Moreover, the net sales of the organization have been increased, a fact which is reflected in the firm’s recent financial statement. Indeed, on the 3rd of July 2011, the net sales of the organization have been estimated to $5,939, increased compared to the same day of last year, when the firm’s net sales reached the $5,537 (in millions). In the future, a further growth could be expected, after the establishment of the new technology in all the firm’s stores. Graph 1 – Performance of stock in Macy’s from 2009-2011 (source: Macy’s, corporate website, investors) 2.4 Outline support plan for customers who may have questions The firm’s initiatives in regard to the introduction of new technology to its customers seem to have an important weakness: no support plan seems to exist for the case that customers do not understand one or more features of the relevant schemes; at least, no specific reference is made to such mechanism (Macy’s 2011, press releases), implying that customers can use existing, i.e. common, customer support services for addressing these issues; for example, employees across the firm’s stores or the firm’s call center could be used for handling this issue at the particular point of time. In the future, a solution should be retrieved for ensuring the performance of these initiatives, at the level that they would be fully understood by all customers. 2.5 Description of new partnerships with technology partners and enhanced customer In the context of the introduction of new technology to its customers, Macy’s has developed a series of important partnerships. For example, for responding to the needs of the RFID technology, used for improving the firm’s inventory management, Macy’s has asked for the support of ‘the Voluntary Interindustry Commerce Solutions Association (VICS) and GS1’ (Business Wire 2011). Regarding the firm’s other similar initiatives, such as the introduction of free Wi-Fi and digital receipts, such partnerships have been also established but it seems that they rather refer to the firm’s existing suppliers (Chang 2011); no reference is made to the establishment of new partnerships for the support of the firm’s new technology initiatives, apart from the case of the RFID technology where the cooperation with appropriately specialized organizations, as mentioned above, has been necessary. 3. Conclusion When having to respond to important organizational issues, such as the relationship between the organization and its customers, managers need to use a series of different criteria. A key problem when trying to promote complex organizational plans, such as the establishment of new technology in one or more departments of the organization, is the following one: the performance of the particular plans cannot be guaranteed. Only assumptions can be made, taking into consideration similar projects and initiatives. In the case of Macy’s the efforts of the firm’s managers to increase customer satisfaction seems to be quite successful. The introduction of new technology to customers has had a key role in the achievement of this target. However, still, there are the following issues that should be addressed: a mechanism should be established for ensuring the rapid development of the new technology in all the firm’s stores; indeed, it has been proved that new technology is not available to all organization’s stores, a problem that should be resolved quickly for avoiding the failure of the relevant project, even partially. Moreover, the monitoring of new technology seems to be still under-developed. Of course, primarily, the introduction of new technology in all the firm’s stores has been set as a priority; however, by ignoring the monitoring needs of the particular technology would lead to the limitation of the benefits of the particular initiatives. References Business Wire (2011, September 28) Macy’s, Inc. to Accelerate Adoption of RFID Technology. Retrieved September 4, 2011, from Business Wire database. (http://www.businesswire.com/news/home/20110928005751/en/Macy’s-Accelerate-Adoption-RFID-Technology) Chang, A. (2011, September 13) Macys adopts new technology in stores and online. Money and Company. Retrieved September 4, 2011, from Money and Company database. (http://latimesblogs.latimes.com/money_co/2011/09/macys-adopts-new-technology-in-stores-and-online.html) Macy’s (2011) Corporate Website. Retrieved September 4, 2011, from Macy’s database. (http://www1.macys.com/index.ognc) Macy’s (2011) Corporate Website. Investors. Retrieved September 4, 2011, from Macy’s database. (http://www.macysinc.com/investors/) Macy’s (2011) Corporate Website. Press Releases. Retrieved September 4, 2011, from Macy’s database. (http://phx.corporate-ir.net/phoenix.zhtml?c=84477&p=irol-news&nyo=0) Veras, O. (2011, February 24) Macy’s gives shoppers a Backstage Pass to learn via mobile technology. Retrieved September 4, 2011, from WPP database. (http://www.wpp.com/wpp/press/press/default.htm?guid=%7B01ae56de-a99f-46c2-a85d-c82fc18bc73c%7D) Read More