Macy's Enlists Google Cloud To Revamp Distribution System

Macy's is partnering with one of the giants of the digital world to bring its flagging business out of the past.

The department store chain has enlisted the services of Google Cloud to power the operations of its Macy's Backstage distribution center in Columbus, Ohio, CNBC reports. Macy's CEO Jeff Gennette told analysts on the retailer's Q2 earnings call about the partnership, which he said will be expanded to the rest of Macy's warehouse network in 2020.

Google started offering its cloud computing services to retailers and distributors earlier this year, hoping to take some market share from industry leader Amazon Web Services, according to CNBC. The service, which manages inventory and delivery times, has already landed partnerships with Kohl's, Home Depot and Target.

Macy's Backstage, the company's off-price subsidiary that mainly operates from within its department stores, has a separate distribution network from the rest of the company to ensure differentiation from the main brand. Overall, Macy's has six supersized warehouses that service products bought online for home delivery, and 16 smaller distribution centers that stock brick-and-mortar locations, CNBC reports.

The department store's chief technology officer told CNBC that Google Cloud will eventually be implemented in ways beyond distribution.

Eager to avoid the same fate as bankrupt longtime competitor Sears, Macy's has been spending on multiple fronts to update its brand and keep itself relevant. In addition to Macy's Backstage, the company is adding experiential retail concept Story to 36 of its department stores. It has also been expanding cosmetics acquisition Bluemercury to more stand-alone locations.

Google is not the first titan to lend its expertise to Macy's as part of a partnership. Since 2016, Brookfield has held development rights at several Macy's-owned properties, and it is exploring mixed-use developments. 

None of the above activities seem to have convinced investors of Macy's future. After missing revenue projections for the second quarter, the retailer's stock briefly hit its lowest price since 2010 on Wednesday, CNBC reports.