Why have Macy's's women's handbag sales dropped 15% year-over-year in Q3?

Introduction

The 15% year-over-year drop in Macy's women's handbag sales during Q3 is a significant concern that requires a thorough analysis. To address this issue, I'll employ a systematic approach to identify potential root causes, validate hypotheses, and develop both short-term and long-term solutions. My analysis will cover various aspects, including product performance, market dynamics, and customer behavior.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be seasonal factors at play. Has there been any shift in the typical seasonality of handbag sales compared to previous years?

Why it matters: Seasonal changes could explain the drop and inform our strategy. Expected answer: No significant shift in seasonality. Impact on approach: If confirmed, we'd focus on non-seasonal factors.

• Considering potential changes in customer behavior, have we seen any shifts in customer demographics or purchasing patterns for women's handbags?

Why it matters: Changes in our customer base could explain the sales drop. Expected answer: Some shift in younger customers' preferences. Impact on approach: We'd investigate product-market fit for different age groups.

• Thinking about our product mix, has there been any significant change in our handbag inventory or pricing strategy in the past year?

Why it matters: Changes in product offering or pricing could directly impact sales. Expected answer: Some new product lines introduced, slight price increases. Impact on approach: We'd analyze performance of new vs. existing lines and price elasticity.

• Reflecting on the competitive landscape, have any major competitors launched new handbag lines or aggressive marketing campaigns recently?

Why it matters: Increased competition could explain our sales decline. Expected answer: A few new entrants in the market with innovative designs. Impact on approach: We'd assess our product differentiation and marketing strategies.