Struggling Macy’s Just Brought In a Billion Dollars Online

Pete Bellis/Flickr

Macy’s may have had trouble getting holiday goers to visit its huge department stores, but its website and mobile app sure grabbed a few clicks.

Macy’s generated its first billion-dollar month of sales from its digital platforms in December, said Yasir Anwar, group vice president of digital technology for Macy’s and Bloomingdale’s. Anwar, speaking Sunday at the annual National Retail Federation’s convention in New York City, added that Black Friday saw more than half of Macy’s web traffic come from smartphones — another first.

Macy’s no longer breaks out what percentage of its business is derived from digital sources as compared with physical stores, arguing the lines between the two have become too blurred. But, there are several clues to suggest the digital business is growing while the brick and mortar business is shrinking.

“We are buoyed by a very strong performance in our digital business, with continued double-digit increases in online sales,” said Macy’s chairman and CEO Terry Lundgren in a Jan. 6statement. Lundgren, trying to thwart pressure from activist investor Starboard and reawaken a stock price that has plunged 40% in the past year, added, “In November/December, we filled nearly 17 million online orders at and — a new record for our company, and an increase of about 25% over last year — based on significant new fulfillment capacity, site functionality and aggressive digital marketing.

At least Macy’s is able to hang its hat on something in a challenging holiday season.

The company warned on Jan. 6 that same-store sales plunged 4.7% for the months of November and December combined. Same-store sales for its fourth quarter, which runs through January, are seen falling by about 4.7%, worse than previous guidance for a decline of 2% to 3%.

Macy’s also lowered its full-year earnings guidance to between $3.85 and $3.90 a share from its prior expectations of a $4.20 to $4.30 a share range.

The company will close 36 stores by the spring as part of a broader reorganization. After those stores are shuttered, Macy’s will operate about 730 locations in the U.S.

Macy’s did not immediately respond to additional request for comment.

Written by Brian Sozzi of TheStreet 

(Source: The Street)

Uber Teams with Airbus for On-Demand Helicopters

Uber teams with Airbus for on-demand helicopters
Provided by MarketWatch

MUNICH — Airbus Group SE will provide helicopters to Uber Technologies Inc. for its on-demand services, the European plane maker’s chief executive said Sunday.

“It’s a pilot project, we’ll see where it goes — but it’s pretty exciting,” Airbus Chief Executive Tom Enders said in an interview with The Wall Street Journal at the Digital Life Design conference in Munich, Germany.

Enders said he hoped the cost of ordering a helicopter via Uber’s app would fall over time. The project will launch in several weeks, he said.

Uber, which runs a smartphone app service that allows people to hail cars for trips, recently expanded its offerings to include other forms of transportation, including on-demand boats.

Written by Rebecca Blumenstein and Natalia Drozdiak of MarketWatch

(Source: MarketWatch)

It’s Not Just in Your Head, the Web is Slowing Down

© iStockphoto
© iStockphoto

It’s not your imagination, and it’s not because AT&T – and possibly others — is purposefully cutting speeds to unlimited data plan users. The real reason: Websites are growing in size, causing slower load times.

The average website is now 2.1 MB in size, compared to 1.5 MB two years ago, according to HTTP Archive, an Internet data measurement company. Multiple reasons can explain this increase in size.

Sites have been adding more content in an effort to drum up traffic, such as videos, engaging images, interactive plug-ins (comments and feeds) and other code and script-heavy features. Websites are becoming more and more technically advanced, and other sites have to keep adding features to stay competitive.

To keep up with the rapidly increasing number of users accessing sites on various platforms, developers are offering more versions of websites as well as apps to accommodate all devices, including smartphones, watches, tablets, and other gadgets. All of these versions require additional code, ultimately adding to the weight of a given website.

Then there are the advertisers who want to get the user’s attention by creating dramatic displays for their products that consume even more bandwidth.

Websites also want to know who is visiting their pages, both welcome and unwelcome visitors. New tools that track and analyze visitors have increased in popularity, as well as stronger encryption technology to add more security. These security measures and trackers require more code, again slowing load times.

Unfortunately for websites trying to keep up with the times, Google has just introduced a new ‘Slow to Load’ warning sign in mobile search results. Since mobile searches account for more than half of the total Google searches in 10 countries, Google wants to enhance user experience for those on their mobile platform.

Although the weight of a website isn’t all that contributes to slow loading, it’s a major factor. Other reasons include users overusing data, a poor connection, or a high level of traffic in the mobile network.

Google also changed its algorithm in April, so now ‘mobile friendly’ sites are ranked higher on search results, while those that fail to meet its criteria are ranked lower.

Although the internet is only slowing by a matter of seconds, it’s still slowing down. All the more reason for a user to become frustrated with a page that’s taking a couple extra seconds to load and go to a competitor’s site.

Written by Millie Dent of Fiscal Times

(Source: The Fiscal Times)

Apple is Finally Accepting that Buying Music is Obsolete

Apple’s decision to create a new streaming service called Apple Music is a recognition of just how much the music business has changed over the last decade. A decade ago, it was widely assumed that people would build collections of digital music just as they previously built collections of records and CDs. Apple was at the forefront of that change, with Steve Jobs convincing record labels to sell their songs for just 99 cents.

But we now know that this whole way of thinking about the music business was wrong. Customers don’t want to buy music, and they don’t want to build music collections. Smartphones allow something much better: services that allow unlimited streaming of millions of songs. These services are rendering traditional music ownership obsolete.

A decade ago, the iPod and iTunes seemed like the wave of the future. But it’s now clear that they were just an awkward transitional stage between the physical formats of the 20th Century and the streaming media services that will dominate in the future.

Music purchases are declining

As recently as 2012, analysts were predicting that paid music downloads would continue growing — albeit slowly — for the foreseeable future. But that’s not how things have worked out. In 2014, revenues from music streaming services surged, but paid song downloads in the US actually fell by 12 percent. Globally, downloads  declined by 8 percent in 2014.

Digital downloads appear to be on the same trajectory as CDs, only with a 15-year lag. As this chart from CNN shows, sales of CDs peaked around the turn of the century, and they’ve been steadily declining since then. Paid digital downloads soared in the decade after the iTunes Music Store was introduced in 2003, but they’ve now leveled off:

US music sales in various formats

© Provided by US music sales in various formats

A key thing to note about this chart is that despite all the hype about digital downloads, they’ve never come close to offsetting declining CD sales. People just spend a lot less money buying music than they used to.

Smartphones are killing music ownership

There are two big ways that the rise of the smartphone is leading to the death of music ownership.

One is the popularity of music streaming services. In the pre-smartphone era, music streaming services weren’t that useful because you could only use them when you were near your computer. So people bought iPods and filled them with music so they could listen to it on the go.

But today’s streaming services work on smartphones that can access the internet wherever they go. There’s little reason for users to have their own copies of the music they love. They can just call up songs they want to listen to on-demand.

Another trend that’s been bad for music ownership is the growing number of users who don’t own a PC. People used to keep their music on their PCs and transfer it from there to their iPods. When people bought a new PC, they’d transfer the music library from the old computer to the new one.

That’s not very practical on a smartphone, which doesn’t have the sophisticated file-management tools of a conventional PC. When people buy a new smartphone, they expect to be able to just throw the old one away.

People can sign up for cloud-based storage services from Google, Amazon, and other companies to synchronize their music from one device to another. But managing these services is a bit of a hassle, especially if you have to do it entirely on a smartphone. And if you’re going to rely on an online service to manage your music, why not just use a service like Spotify or Pandora that already has every song you could possibly want to listen to?

Buying music is for old people

Like most technology trends, the shift from owning music to streaming it has been led by young people. A 2011 survey found that almost half of people between age 16 and 24 used streaming services, compared with less than a quarter of 55 to 64-year-olds:

Streaming music penetration by age

© Provided by Streaming music penetration by age

The ubiquity of streaming services means that today’s teenagers have no reason to get into the habit of buying music. “I haven’t seen someone use iTunes in a really long time,” one college student told CNN in 2012. So as the Spotify generation comes of age, the fraction of consumers buying digital downloads will continue to shrink.

Countries with the best internet access do more music streaming

Another sign that the shift toward music streaming is permanent: some countries are way ahead of the United States.

Permanent downloads and subscription streams as a percent of total digital revenues 2014

© Provided by Permanent downloads and subscription streams as a percent of total digital revenues 2014

Overall, downloads still accounted for a slight majority — 52 percent — of digital revenues. But in some countries, streaming has become the dominant revenue source for music labels. In Sweden and South Korea, streaming accounts for more than 90 percent of industry revenues.

It’s probably not a coincidence that streaming is most popular in South Korea and the Scandinavian countries of Sweden, Norway, and Finland. These countries have long been among the world’s leaders in the speed and availability of high-speed internet access. And streaming services depend more on ubiquitous and high-quality internet service than downloads do.

This suggests that as other countries, including the United States, improve the quality and availability of their internet access, we’ll see a similar shift away from music purchases in favor of streaming.

Written by Timothy B. Lee of