About

Macy’s is a legacy department store founded more than 160 years ago that operates more than 450 stores. The company has established itself as a staple within American retail, and in recent years, expanded its online footprint with more than one million Facebook followers and international shipping. In 2021, the company launched Mission Every One, its social-purpose program that aims to direct $5 billion in spending through 2025 toward a more equitable and sustainable future.

The challenge

As consumers increasingly demand personalization in their style and shopping choices, Macy’s sought to expand its offerings by including new product categories such as electronics. It also wanted to support its Mission Every One program, which aims to increase diverse-owned brand representation. The company hoped to achieve all of this without increasing its inventory and associated costs.

Like other businesses, Macy’s identified that a marketplace could meet evolving customer needs by supporting other sellers on its platform. These sellers are in large part small businesses that often lack resources to develop an online footprint and spend on customer acquisition. As diverse owners often operate small businesses, the marketplace could increase product offerings while supporting the unique needs of these diverse owners. Since marketplace sellers maintain ownership of their inventories, Macy’s also benefited from incurring no additional inventory costs.

Macy’s also wanted to offer features that would support its sellers as much as their customers, but this introduced complexities. Each time a customer purchases another seller’s product, the income must be divided into separate pools. Those two pools must remain separate, so Macy’s needed help moving the right funds to the right account after every transaction.

The solution

Macy’s chose to work with J.P. Morgan because J.P. Morgan offered the payment solutions that solved the company’s unique challenges. J.P. Morgan Concourse allows Macy's to support a large number of suppliers and their bank account details on a single platform. The solution also supports tokenization, which masks consumers’ and sellers’ sensitive payment account information. It also utilizes a single-API integration that supports ever-evolving participant expectations.

The J.P. Morgan solution also solved for complexities related to third-party money (3PM), or cash that belongs to an entity besides Macy’s — in this case, the seller. The biggest opportunity centered around leveraging J.P. Morgan’s 3PM expertise to manage the flow of funds between Macy’s and its partners — a complex process that includes state-related nuances.

Some of J.P. Morgan’s hosted payment solutions also support sellers’ biggest needs. Many small businesses operate with low cash reserves and buffers, so these organizations benefit when they can receive payments more quickly. J.P. Morgan’s solution allows Macy’s to pay sellers weekly compared to bi-weekly or monthly, placing vital funds in the hands of organizations that serve as the lifeblood of local communities. Sellers also benefit from easy enrollment and auto pay.

The results

Thanks in part to J.P. Morgan solutions, Macy’s Marketplace has been successful and continues to grow, supporting diverse small business owners and providing customers with increased selection. But some benefits cannot be quantified. When the Macy’s Marketplace team considered potential payments providers, it wanted strong solutions, top-notch partnership, and an organization, which it has found in J.P. Morgan, that would learn, grow, and collaborate with them.

Disclaimer

Member FDIC. Deposits held in non-U.S. branches are not FDIC insured. 

J.P. Morgan makes no representations as to the legal, regulatory, tax, investment or accounting implications of the matters referred herein. Not all products and services are available in all geographical areas. Visit jpmorgan.com/disclosures/payments for further disclosures and disclaimers related to this content.