BREAKFAST WITH THE BOSS – MACYS.COM

Jeff Kantor – Chairman and President, Macy’s.com
Thurs June 21, 2012

Jeff Kantor, as you may remember him from being one of last year’s YMA FSF Honorees, is Chairman and President of Macys.com, although that was not the original game plan. Graduating college with a background in finance, he interviewed with Filene’s, a Boston-based department store that eventually became Macy’s, as a practice interview to prepare for finance interviews. What he didn’t expect was to have such a good time at the Filene’s interview and be bored out of his mind at the finance interviews. But finance was where the money was, and perhaps still is today.

“The advice I always give my own kids is do what you love. If you do that, you will be very successful because you will have the passion to excel,” Jeff said. It sounds so simple, yet there are still so many people out there unsatisfied with their careers. It’s hard to block out the negative influences from society, and sometimes even from your friends and loved ones. And then there’s the necessity of knowing what it is that you love in the first place. Jeff was lucky to find his passion for retail on that day he interviewed with Filene’s. “I just kept meeting all these great people, and I had a phenomenal boss, who was a buyer for almost 30 years. I was hooked,” he said.

Jeff started out as an assistant buyer in women’s shoes. In his own words, Jeff became “obsessed” with the business. When he was still dating his wife, he would ask her to come with him to look at shoes every week. “She must have thought I was nuts!” he laughed. And when he started buying cosmetics, all his wife’s friends loved him. “I was the life of the party,” he said.

After a short stunt at TJX, he came back to the company to do something different. “I was asked by the President and CEO of Filene’s at the time to be his support guy – his assistant. I said to myself, ‘look at me; I’m not a support guy!’ But I knew I was going to learn a ton, and I did,” he said. He worked under Gene Kahn, a former Chairman and Chief Executive of Macy’s known for his brilliance as a merchant.

After a while as Gene Kahn’s “support guy,” Jeff rose quickly through the ranks as GMM for men’s. He then became responsible for beauty, center core (handbag, shoes, jewelry), and big-ticket items like furniture and mattresses. Then reorganization happened and he became the President of the Macy’s home store. Finally Terry Lundgren asked him to grow Macy’s online to its full potential. “I asked him if I would make less money, because it was a smaller business at the time, and he said no. So I went,” Jeff said.

There has been incredible growth in the last couple of years in Macys.com, currently the fastest growing division at Macy’s. “With brick-and-mortar you will see growth rates of 4-5%, but with online, it’s something like 40-50%,” he said, “but it’s really not the job, or the money – it’s where you want to go in your career. Be open to opportunities.”

What has been the biggest challenge in expanding dot-com? “The first and biggest thing is how much investment do we need to make in our infrastructure – and by this I mean people, office space – to growth dot-com to a few billion?” he said, “internet is a very hard business. It’s about logistics, marketing, and it’s very detail-oriented.”

Although the growth rate at Macy’s.com is even better than Amazon’s, Jeff is still aiming for something better. “We want to be the best. We test ourselves using various different measurements, but we never give ourselves anything better than a C.”

So what’s the difference between the online and brick-and-mortar customer? “For the plus, petite, and big-and-tall customer, it’s very hard to shop in-store,” he said, “there’s just not as much selection. Also, for the fashion customer – the one who really wants the very latest assortment – there is only Herald Square and Macy’s.com that’s going to have the newest stock.”

What about integrating the new channels? “That’s really the thing we’re most excited about – omnichannel. We’re really looking for ways to work hand-in-hand with the ‘bricks’ to better serve the customer,” he said. 40% of Macy’s customers go online do to research before walking into the store.

So just how do you become a great merchant? “If you want to be successful,” he said, “it’s really more about being a good leader, than just a good merchant. Around the time you transition from a buyer to a divisional, your business really becomes your people, and not just you, because only when your people do well, can you do well. It really becomes about how good you are in strategy, in direction, and in managing the people around you.”

Most challenging part of your career? “When I had a boss I admired as a businessperson, but not as a person,” he said, “it was really difficult to engage and energize the people who worked under me while trying to relate to my boss. But no one makes ever y decision. “You always have a boss,” he said, “even as a CEO, you’ve got the board of directors to report to.”

Jeff’s expectations for the future? One word: “mind-blowing.” “We have 300 projects we have to cut down to 50 each year. The bottom line is: does it increase traffic, conversion, or average order value? We get so many great ideas every single day, and we’d like to implement each and every one of them. But the fact is, we just don’t have enough money, time, or people” he said, “it’s all about ROI. Of course, there are also certain things we do to accomplish long-term goals that may not translate directly into ROI.”

Key Lessons and Takeaways
• Don’t be afraid of taking a job that seems different from the path you are pursuing in your career, if it’s a great learning opportunity.
• It’s not the job, or the money – it’s where you want to go in your career. Be open to opportunities.
• To be successful, it’s more about your people, and less about you.
• In retail, you need to be quick, analytical, and have great communication skills.
• Watch the 80/20 rule – unfortunately, not matter what you do, 20% of what you do is going to correspond to 80% of your sales.

*Notes courtesy of Maggie Jiang

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