Federated’s Name Game Strategy
By George Anderson
One-by-one, the familiar banners that hung over regional department stores, such as Bon Marche, Burdine’s, Lazarus and others, were first hyphenated and then replaced by Macy’s.
Now that Federated Department Stores has agreed to buy May Department Stores’ holdings, including Marshall Field’s, Lord & Taylor, Famous-Barr, Filene’s, Foley’s, Hecht’s, Kaufmann’s, Meier & Frank, Robinsons-May and Strawbridge’s, how long will it be before the Macy’s name first hyphenates and replaces most of those?
For some, Federated’s name game strategy is much ado about very little.
Marshall Cohen, senior analyst with NPD Group, told The Associated Press he believes the fact that Federated controlled all the regional chains bred a sense of sameness over the years.
“Was Burdines so different from a Macy’s? No, not anymore,” he said.
For some, the local name of a department store is a trip down memory lane.
Louetta Payne, 70, told the AP she remembered dressing up for a day at shopping at Rich’s when she was a child.
“Those days will never come back, and I’m not saying they’re better than now,” she said. “It’s just that there was a pride to it. What you bought there was unique.”
Kim Picciola, an analyst with Morningstar Inc., called Federated’s Macy-ization strategy “a sign of the times,” adding “we are more focused on national brands as a consumer these days than we are on regional brands.”
Moderator’s Comment: Should Federated continue to follow its ‘- Macy’s’ strategy with the stores it is acquiring from May or should it just convert to
the Macy’s banner from the get go? Will it make any difference to sales, even if Federated replaces the Marshall Field’s and Lord & Taylor banners with Macy’s?
You can put Eric Stauffer, a computer technician for J.P. Morgan Chase & Co. interviewed for the AP story, under the non-plus column on the name
changes.
“What’s in a name?” he asked.
“Growing up, I remember going to Lazarus as a kid, but other than that, it’s a clothes store,” he said. –
George Anderson – Moderator
Brands – or names – do not stand alone. They achieve their notoriety, as someone mentioned earlier, because of products and functions they’ve served in the community. Filenes is a brand extraordinaire in the Boston area. My mother’s already fretting about Macy’s absorbing Filenes because the products are different. She strongly dislikes shopping at Macy’s and only does so under duress.
I think that pride goes before a fall, and when the consumer doesn’t come first, the rest will be history.
I think that most of the regional store names are so weak that they would be better off with the Macy’s banner. Marshall-Fields might be the one exception, but they may gain as much or more than they lose by switching to Macy’s. Having a single brand is so much easier and more efficient for the company. It is harder and costlier to manage marketing and promotions across multiple banners.
The more I think about it, they should start the hyphenation game with the strongest regional names only and get it over with ASAP. Full speed ahead and don’t look back!
I believe, as consumers migrate around the country, there is a need for a sense of belonging. Good, bad or indifferent, visiting a Target or Wal-Mart gives a sense of, and an expectation of, experience. I think this is a good thing. Having the Macy’s banner across the country viewed from a cost perspective of advertising and purchasing, should be an advantage. The key to this issue, as with all companies, is not to confuse the banner with the brand. The key is going to be Federated’s ability to create a shopping experience that will want me to seek out the experience in their stores, which to this point has been heading to a level of sameness and boringness.
As a consumer, I don’t find it comforting to find the same stores and restaurants everywhere I travel in the country (and now internationally).
I find it monotonous.
Putting aside Federated’s name strategy, I take issue with their strategy to buy up all the local department stores in the first place. The least they could do is let the stores retain some identity.
I agree that Marshall Field’s and Lord & Taylor should remain “as is”. They are well known names OUTSIDE of the US as well.
I don’t see any magic to changing the name to Macy’s. They did not make a lot of friends last year when they tried to take Christmas out of their stores.
Many times, when big companies try to make the local stores the same as the big ones, they end up losing. You have seen this with the food stores. Safeway did nothing to improve Dominick’s, I know they did not change the name, but they still tried to run it like a Safeway and they have become a less influential chain in the Chicago market.
Change may be inevitable but not always better.
The problem is that Macy’s is not exactly the most well respected brand name these days, or even in the top 100. These regional chains have specific attributes they’re known for, so I’d go slow before saddling them with the Macy’s name. Whatever efficiencies are derived are not as significant as the potential loss of loyal customers. L & T and MF should stay as they are or be sold, as they are more upscale than Macy’s and draw a different customer entirely.
Each brand must be treated with respect by moving the name slowly. Department stores are already having enough trouble maintaining a customer base. Growing up with the Bon Marche name, it’s been much easier to see the name change over time. A one-time change would have destroyed far too much equity. Dealing with Marshall Field’s and Lord & Taylor however is a different story. “LT” in particular has a very unique niche that requires the name to remain. “MF” has a strong history in Chicago and, if it can find a way to manage the downtown store profitably, then they should hold onto the name. Clearly the “MF” name will be harder to make work long-term.
I grew up shopping at Hudson’s in Detroit. Over the years, the Hudson’s name changed and eventually disappeared. I miss the old Hudson’s… I realize now, not so much for the name, but for the memories the name evokes.
Today, I think it matters more what is going on in the department store. If Federated gets that right, then they can call the stores whatever they want and that brand will do well. And if they do not get it right… well… we all know that story.
Here in Colorado — where May started in the 1870s, selling Levi’s to silver miners in Leadville — the company alienated its customers in 1987 after the Associated merger when it re-branded The Denver Dry Goods (“the Denver”) stores as May-D&F (that hyphenate name being a product of a 1957 merger). Then they further alienated the Colorado consumer in 1993 when they re-branded May D&F as Foley’s. (That it was a Texas name only added insult to injury.)
To re-brand Foley’s as Macy’s seems to me the best way out of a bad situation — whether this is true in other areas remains open to question (although Utahans probably resent having the Meier & Frank name on their ZCMI stores as well). Everyone has heard of it, and it has largely positive associations (maybe because Colorado has never had a Macy’s).
Most importantly: the May Company effectively “fired” its customers through years of mismanagement, fake sale prices, awful, cluttered stores, hard-to-find and poorly trained associates, etc. A name change will bring shoppers back, and if Macy’s does it right — changing the stores first, then the name — it will keep them coming back.
Along with Tom, I have great memories of the Hudson’s store in Downtown Detroit as well as their others throughout the suburbs. It’s in those memories that the name is evoked. But I suggest it was also the ‘experience’ that was there that created the memories. It was a spectacular place to go and a wonderful experience that created memories that lasted a lifetime.
When the Marshall Fields name replaced Hudson’s, while it was hard to see, it was a known name due to the Midwest connection from Chicago. It also was what I thought an equal.
In this situation, the name will not be as important as loyalties are what they are today. It will be what it was then – the experience. It’s what was lost and what must be regained. Not the old experience, but a new one. One worthy of creating memories and loyalty. The name is of less value than the experience. The experience will create the name.
What’s in a name?
I am reminded of a conversation I had with Helen Walton. At the time (I was nineteen years old), I thought I had all the answers in the world (even more so than now, if that’s possible) and had just finished a conversation with Sam Walton in which I started without even knowing who he was.
Me: “You mean he named this store (Wal-Mart) after himself?” (At this time, I was so clueless as to think that the Wal-Mart I was in (in 1990) was the only Wal-Mart — I did not even realize it was a chain.)
Helen: “Well, yes, I guess that was a bit prideful. But the Kresege family did the same thing with Kmart.”
Me: “Mr. Walton really stomped off a bit upset when I compared the store to Kmart. Do you think I should apologize?”
Helen: “Nope, it’s good for him. Keeps him humble.”
The rest, as they say, is history…
I don’t see how keeping the MF name, as part of Mr Lundgren’s long term strategy of a nationwide brand, is achievable.
That said, maybe it’s time he and Federated re-thought their strategy, especially concerning MF’s.
Marshall Field’s, in particular its flagship operations in Chicago, Minneapolis and the Detroit suburbs, is a far superior chain in terms of merchandise, display and overall ‘attitude’. Blending it into Macy’s, as it is presently run, is a huge mistake, and, if anything, Federated should be trying to adopt some of the unique ideas that MF has instituted into the Macy’s and Bloomingdale’s chain. I’ve watched Macy’s and Bloomingdale’s devolve over the years into a painful sameness and little to no-service standard that even Target can beat.
That is sad, and as Federated ate up chains across the continent, with little competition remaining in key markets, they haven’t seen the need to enhance merchandise, store design, service, or operating style. Shopping Macys and Bloom’s years ago was a treat. Now it’s a chore, and a boring one at that.
Marshall Field’s, on the other hand, reminds me of Selfridges in London, which is really the premier store in the UK, as Harrods has gone into seriously decline. Selfridges has a great deal of energy and a strong individual identity that makes shopping there an event – a feeling that most of the US chains lost over a few decades ago. If MF can bring some of that energy to the Macy’s/Bloom’s side, then Federated needs to really look at this somewhat retentive need of only having two brands nationwide, and take a cue from the way that Target began to re-invent MF’s.
I do realize that all of this is moot, compared to the Wall Street driven ideals and pension-fund/MBA mindset that has robbed many companies of any of their original identity, but retailing is different. Perceptions, image, value and history play a much bigger role in people’s minds when it comes to these dept stores.
Perhaps someone should make this point to Mr. Lundgren and the board at Federated before they destroy another great legacy and its real potential.