National Macy’s Tries Local Approach
By Tom Ryan
After spending years closing down and changing over scores of regional banners to create the country’s first national department store chain, Macy’s Inc. is making a renewed push to reach customers at a more regional level. Represented by the ad campaign, “My Macy’s,” the initiative is designed to increase sales by adapting merchandise and marketing based on area preferences.
“We want to be locally relevant,” Macy’s CMO Peter Sachse told Advertising Age.
Shifts in merchandise will be evident beginning in the second half of this year. From a marketing perspective, the program will ensure that advertising closely reflects local trends. For example, coats will be marketed more heavily in Minneapolis than they would be in Miami. The initiative is also intended to emphasize grassroots efforts to bond with communities. For instance, when the high school prom is approaching, Macy’s could run a prom ad, Mr. Sachse told Advertising Age. If a local cheerleading squad wins a competition, Macy’s could run an ad congratulating them.
The initiative comes as Macy’s is closing many regional offices. Seven regional headquarters are being consolidated into four, and Macy’s is setting up smaller regional offices in Chicago, Cincinnati, St. Louis and Seattle charged with tailoring stores to local tastes as part of the “My Macy’s” effort.
The program also comes as Macy’s continues to battle criticism from customers of the former May Co. stores, particularly Marshall Field’s, that it doesn’t understand their needs.
Discussion Questions: In becoming a national retailer, what challenges does Macy’s face in appealing to customers at a local level through merchandising and marketing? Which national retailers do a good job reaching consumers at the local level? What can Macy’s learn from them?
I am as sentimental as the next guy (and girl) and lament the loss of local flavor and local brands (W&L, Hecht Co, Robinsons, Burdines, Foley’s, MF, Strawbridge, Gimbels et al) but the fact is that they were all doing very poorly and had been losing huge chunks of market share every year since 1980. In addition they had all done a good job on their own in becoming generic stores since the all had the same Polo, DKNY, Liz C, and Tommy Hilfiger shops and the same branded make up counters. None really dared to stake out their own ground the way that Harrods and Selfridges do in London.
The changes needed are now too great and the time too late for mid level mainstream department store business to ever recover what has been lost.
This comment is as a consumer, not an expert in retail branding strategies (I’m a supply chain guy), but from everything I have observed, Macy’s national branding approach has been a disaster, taking highly respected regional brands (such as the Lazarus in Ohio) and turning them into faceless Macy’s stores that no one cares about anymore.
I know there are synergies from having one brand, and the headquarters folks always want to take over everything, because it then makes their jobs more important, but in my view, the Macy’s approach has been a big failure, and the “my Macy’s” approach won’t matter a tinker’s damn–they lost the local feel with the national strategy and will never get it back.
When a retailer becomes national in scope, logistics always becomes a cost factor and the upfront marketing and logistics costs in having a localized merchandise program is daunting. But medium and long term growth is directly affected by local demographics and how a chain caters to them. Overall, it is a great idea for Macy’s to push local wants and needs.
Although not really national in service area, Publix does a great job of catering to local cultures, especially from Miami up to West Palm Beach zone.
Retailers must listen to their customers especially on the store level. Instead of having a centralized customer service number, a great idea that really works is a number and voicemail box directly accessed by the store manager or purchaser. That phone number would be for that particular store only and customers can call or email their concerns and suggestions. Works faster than a national call center and the customer will feel a stronger connection to the store.
I think supermarket chains do a much better job of catering locally to shoppers tastes, especially the giant single regional chains such as Great A&P, HEB and Publix.
That said, Macy’s, after brainwashing their customer base to believe that “Macy’s is better” and whitewashing a zillion years of collective local and regional department store history and tradition, now wants to be known as being more “receptive” to local market needs.
Baloney! Their snowball job of creating a national department store chain is failing miserably.
I really wish they’d admit to their mistakes and bring back Marshall Field’s. That’s when I would say that Macy’s has gone back to being truly local and catering to local market needs.
Sign me up in the Dan and David camp. Here in Detroit, the story is the same (with a twist)–we started with J. L. Hudson’s which was absorbed into Marshall Field’s, which in turn has become Macy’s. Old timers still call it Hudson’s. Younger shoppers go someplace else.
I would like to know just how local the stores will become. How much independence from national buyers will each region–or for that matter each store have? Even within a region there are major differences.
I think Macy’s is under-serving markets, they’re just too big to effectively tailor each store to local needs. Macy’s is leaving a huge chunk of change on the table in so many markets, they honestly do not know their own business. Very sad, seeing as how 10 years ago we had great stores from companies like Mercantile who owned the local markets.
Someone else said it best when they stated that no one cares about Macy’s like they cared about their own local store.
This seems to be the big story that Macy’s misstepped and all of Chicago has sworn off shopping with them. If Marshall Field’s was doing so well, why were they purchased? Regionality in a department store means what exactly? A particular green in Boston is unacceptable in Miami?
The mass purchasing power of Macy’s ensures a greater selection for most markets and the ability to restock quicker by drawing from markets where risks might have been taken more than when it was a local department store.
People have short memories; if I thought there was some inherently magical service or selection with any of the purchased local brands it would be one thing but they were working off “remembered” great service of a generation (or two) ago, not actual.
Macy’s continues to be a victim of its own arrogance.
They thought could simply buy the loyalty of the customers at the chains they acquired. Then, they turned every local store into a footprint of their own Macy’s stores. Now, they think they can fix it by “tailoring to local needs.”
Their attitude seems to be “we know best; what do you know, you’re just the customer.” Even the former utilities and the Post Office have learned to be customer-driven. Why can’t Macy’s learn this lesson?
There are financial reasons to put everything under one brand name but a company has to listen to its customers or else they will have none.
This “fresh” approach is fine but also having enough sales people on the sales floor who are not only trained but who also care would be a big help too.
Macy’s doesn’t need an office in the Midwest to know that coats are more important in Minneapolis than Miami. Macy’s doesn’t need any local offices to enhance regional assortments.
Macy’s #1 problem: it isn’t special enough in any market, regardless of the location name history. For many years, Macy’s use of coupons and other price appeals has been its #1 marketing approach. Decades ago, Macy’s used assortment dominance, private labels (“Supremacy”), and Grade A publicity (the Thanksgiving Day Parade) to earn customer loyalty and great profits. Nordstrom is #1 for customer service, Lord & Taylor is trying to become #1 for famous brands. What does Macy’s mean? The department store world’s largest coupon advertiser?
The last thing that the regional department stores offered that gave them any distinction was their historic links to the local communities, and Macy’s has done all they can to destroy that.
I’ll always remember staying in a hotel in downtown Pittsburgh and asking the desk clerk where I could see something “local?” He sent me to Kaufmann’s where the Tic Toc restaurant was decorated with old photos of downtown Pittsburgh and the evolution of the Kaufmann’s stores.
Check on eBay, it is packed with memorabilia from the great department stores. Couldn’t Federated find some way to package that wonderful brand equity rather than wipe it away as though it were meaningless?
It would be hard to communicate the negative feelings the Marshall Field’s issue generated in my family, my 22 year-old will not enter a Macy’s store nor accept a gift from there. A “Field’s wedding” had been one of her dreams and we have generations of family memories associated with the store.
As the entire country “evolves” into strip malls of Starbucks-Macy’s-Outback Steak House-Hampton Inn blandness, I believe there will be a backlash for interesting local or regional merchants that could be addressed by a hip Florida chain called Burdine’s, an elegant Midwestern store called Marshall Field’s, etc.
As the last great defender of the department store tradition, I want to defend Macy’s, and want to wish them success but I simply cannot. They need to go away and sell their assets piecemeal to local and regional merchants (like Lord & Taylor’s Jane Effers) who can make a go of it with style, fun, and a touch of glamor.
This is not to suggest that Macy’s was unaware of the consequences, however, Federated (Macy’s) never should have presumed a smooth transition in customer acceptance in the markets where brand loyalty to the former retailer names were so strong.
For example, in the Chicago market, Marshall Field’s, and in the St. Louis market, Famous Barr, etc. There are other examples around the country where consumers probably view Macy’s as being a national chain much in the same way they view Sears or J.C. Penney, lacking local flavor.
Everything these days is so nationalized and generic that there is now a tremendous craving among consumers for local flavor.
You have to just love, and laugh at, the management mentality that spends millions upon millions to “chain” up the country while hearing loud and clear in every major market not to take their legacy brand away, then when it proves itself not so brilliant, put out a “campaign” of going local. This while continuing to close regional offices, of course.
Yes, consolidation can bring efficiency, strength of scale and logistics, but is there anyone out there who knows Macy’s historically for being the in-stock, merchant efficient operator? Don’t think so. More like the faceless role model for what was perceived as wrong with department stores more than a decade ago.
Dan’s perspective as a consumer may be less experienced than as a retailer’s, but far more on point. Perception is everything, and Macy’s has crossed its local base; good luck getting it back. I assure them it will take more than PR driven rhetoric.
Let me make this simple; as a good Macy’s customer, the merchandise that appeals to me as a buyer has dropped considerably. More important, the quality of service is quickly deteriorating.
I was with a group last weekend and was telling my latest Macy’s story about bad service and everyone in the group started telling stories to try and beat it. Not a good sign.
What does the group feel about the quality of Macy’s service since they have expanded?
Somehow I don’t think the problem with the concept of the national department store brand is with the words national or brand.
I think it’s with department store.
Week after week we wax nostalgic about the service we got from our downtown shopping trips to Marshall Field’s, or Stix, Baer and Fuller, or the other venerable regional names of our childhoods (or in some cases our parents’ childhoods). We were greeted at the door by name and went up in the elevator to the right department, and five people scurried around to find the right accessories to go with the perfect suit for that first job our mother interviewed for in 1949.
But for a variety of reasons, that experience seems to be unrepeatable today, except at the very high end. Whether it’s that we can’t find the right people to staff the stores or we can’t hire enough of them at the right salary levels, or we can’t stock the right merchandise mix at the right price points–something doesn’t work.
But since it seems to be endemic to Macy’s, Dillard’s, Sears and JCPenney, and it didn’t really work with Fields before, or Famous Barr and the other regional brands (there was a reason they were vulnerable to buyout) maybe it’s time to close that chapter on American business.
The next time (some) CMOs start complaining about why they’re not taken seriously around the board room table they should be required to read Macy’s CMO Peter Sachse’s comments in this article.
These are supposed to be ‘nuggets’ from a CMO?
I think Macy’s real predicament is that America simply has too many “undifferentiated” shops, all selling the same dreary “undifferentiated” clothes to an increasingly jaded public. Consolidating the nameplates ignored this, and simply pushed existing customers further away.
So now Macy’s wants to inch back a little to where they were? Seems sensible, but I feel they should “quickly” try to recapture the organizational diversity they just jettisoned and then try to create even more. With an unstable environment, they need as much diversification as possible to survive.
Many people felt the move to a national Macy’s brand would cause serious problems with local and regional merchandising, but the management in Cincinnati had already made up their minds and nothing would change their search for economies of scale. They succeeded in creating a national brand at the expense of eliminating the regional identities and cultures. Gone are the Rich’s and Lazarus’ and Hudson’s and Burdine’s that used their heritage and presence to interpret and cater to the local market. It once again underscores the value of local market presence.
The issue is more than national versus regional merchandising, it is one of cultural acceptance. Many loyal shoppers never identified with the Macy’s brand and probably never will. Wouldn’t it be ironic to see some of the former regional names reappear on stores around the country?
“For example, coats will be marketed more heavily in Minneapolis than they would be in Miami.”
Oh, So THAT’S the solution(!): I certainly hope Mr. Sachse was trying to come up with a hypothetical that was so obvious that everyone would “get” it; if this was really an idea management came up with, then Macy’s problems may be worse than I realized…something I didn’t think was even possible.
I remember when the big change to a national Macy’s happened, all I heard was “economy of scale” that was THE phrase of 2005. In other words every Macy’s from coast to coast was to be exactly the same, with the majority of the offerings being private labels.
I don’t think that’s working out for them considering they abandoned a lot of the exclusive high end designer and name brands, when they inherited Field’s but kept the premium prices of Marshall Field’s. I don’t think the public went for it. I know a lot of people who aren’t shoppers but did check out the local department store whenever they were in a new town but they all say now “why check out Macy’s in Chicago? A Macy’s is a Macy’s I’ve got one in my own town I don’t bother to shop at, they’re all the same. There’s nothing special about them anymore”.
I was recently in Lord & Taylor and it’s fantastic, sharp as a tack. People here have said department stores are dying; I disagree–mediocrity dies. I wish L&T all the best, they deserve it.
The problem isn’t that the department store sector is dead, or that downtowns are dead, or that there is too much competition from the bottom of the market (Wal-Mart) or top (Nordstrom) and too few shoppers in the middle.
The problem is simply that there are no merchandisers left in retail. Only executives, accountants and corporations who seek to squeeze every nickel (and joy) out of a retail operation in the name of maximizing shareholder value.
Were I Terry Lundgren, I would have taken Marshall Field’s and created the ultimate Midwestern store by reopening all the selling floors of the flagship and adding:
The largest White Sox, Cubs, Bears, Hawks, Big Ten and Notre Dame fan shop anywhere (hello? Chicago is sports town!)
Local retailers Jazz Mart and Prairie Avenue Books (hello? Chicago is known for its jazz, blues and architecture!)
A food hall (similar to KaDeWe in Berlin) occupying the entire basement, offering regional brands and a limited assortment line of Marshall Field’s-branded gourmet products, like organic jams and cheeses (hello? Chicago loves to eat!)
A television studio to produce cooking programs featuring the chefs on Marshall Field’s Culinary Council (hello? Chicago has some of the highest rated restaurants in the world!)
A bungalow shop selling Prairie-style and Craftsman-style indoor and outdoor furniture to complement the type of housing found in Chicago and the Midwest (hello? Chicagoans love their homes, especially in winter!)
More private labels found only at Field’s like Yo MF, a line of skateboard and hip hop-themed gear to appeal to students (hello? The Loop is the country’s largest college campus!)
Intelligentsia and Metropolis coffee cafes (hello? Chicago’s local coffees beat Starbucks and those other West Coast brands hands down!)
There are so many more things Federated could have done to capitalize on what it paid $11 billion for and increase its market share. Regional pride and nostalgia are strong emotions, the type of emotions brand managers count on to build powerful brands. That’s why I would have kept and improved all the regional nameplates and traditions, changed the name from Federated Department Stores to American Department Stores and consolidated back office functions only.
Instead of transforming its portfolio of regional stores into must-see destinations (like Harrod’s) to draw in and dazzle shoppers, Federated created a national chain like JC Penney’s and Sears where one was not needed. The process alienated millions of loyal shoppers and nothing Macy’s can do will get them back.
In retail, merchandise is important, but the local/regional resistance to Macy’s has always been far less about the merchandise and has always been about the arrogance of trying to force their unwanted brand down people’s throats. In markets where consumers had multiple other retail choices this was the kiss of death for Macy’s “national brand.” If Macy’s was going to emerge from their disastrous debut and be able to learn and recover from their mistakes it would be happening by now–and it isn’t happening.
It’s not that people in Chicago (for instance) don’t buy at Macy’s as a result of their not having enough locally favored periwinkle spring skirts, or locally favored green flip-flops in stock. Customers don’t shop at Macy’s because they destroyed iconic store culture and gave back no “magic” at all in return to replace those institutions.
This “localization” effort is just one more effort in Macy-spin to keep Wall Street at bay.
Macy’s is a New York brand…everyone knows that from the time they were 6 and turned on the Thanksgiving parade.
You can’t have it both ways: National branding program that tears down local brands/good local reputation-perception. The consumer is not that un-informed.
Macy’s bought regional stores that were successful. Those stores were successful because of their local adaptation and loyalty. Changing that approach never made sense to me, alienated loyal fans, and had nothing distinctive to offer younger shoppers.
Changing back to a regional strategy is time consuming and expensive–especially after the money spent to make the change to a national brand and label. However, they will now face the challenge that was a contributing factor to the national strategy in the first place. Adapting product and services to local and/or regional markets loses some of the efficiency of a national brand in terms of scale and efficiency. Making money is a bigger challenge with a regional strategy. Since Macy’s has invested in their national strategy, learning enough about local and regional markets to make an effective differentiation and control costs will be a huge challenge for them.
If done well, this will be better for consumers. Macy’s needs to remember that services were a big part of that local mix and that is also an expensive strategy.
Does anyone think it’s humorous that one of the big box department stores is trying to use the independent retailer model to obtain more success? Does Macy’s really think they are going to be able to reach out to the local cheerleading squads and high school proms across the nation with the way their customer service has been in the past?
I enjoyed another’s post here mentioning the retelling of bad Macy’s customer service experience stories. No matter how much Macy’s tries to go grassroots with their marketing they need to first think about their customer service and store experience because what all independent retailers know is that it”s all about the customer”s in-store experience. That”s how they keep their customers happy and their revenues up.
Has anyone noticed how Macy’s sales have been better lately than most of it’s peers? Everyone keeps harping on the changeover of the May Co. stores to Macy’s. Get over it! It’s no longer a real issue. “It’s the economy, stupid!”
Most of the May company stores are doing great now, with some very high volume stores in Chicago and Minneapolis. (I keep reading that Chicago doesn’t like Macy’s anymore–sales tell a different story with many stores having volumes that match Macy’s best stores in the ‘burbs of New York.)
Macy’s, like Dillard’s, constantly prunes stores and closes poorly performing ones on a regular basis. May didn’t do that to the same extent, so Macy’s ended up with some locations in malls profiled on DeadMalls.com. Of the 11 St. Louis (formerly Famous-Barr)stores, 4 are in dying malls where Dillard’s has already closed, and while Macy’s has been able to stop the sales free fall that F-B had been experiencing, I think these stores will close eventually as well as the Downtown store, which is only doing slightly better as a Macy’s. The old Foley’s stores in Texas and Colorado are going gangbusters with another new Denver store set to open in a few weeks. So while there are some former May stores that are still not up to par, they are individual stores in individual markets that has little to do with the name change.
The My Macy’s initiative is meant to build on Macy’s strengths, to romance the brand so to speak. It’s not an admission of or being done because of failure. Macy’s did over $26 BILLION in 2007. Millions are shopping there! The May Co., including Field’s, was failing…that’s why they ended up on the market.
I think Mary’s nailed it–the department store paradigm of yesteryear doesn’t work today except at the very high end. So generally the department store experience is just…disappointing and off. The magic isn’t there, and without that magic you notice that the assortments are uninspired, too.
When I want to feel some old-time retail magic I check out a Barneys catalog. Their marketing and their sheer nerve are like a vestige of happier and more confident times, and I love them for that, even if $4,000 deconstructed dresses are a bit outside of my personal reality.
Greetings from the Wilds of Minneapolis. I hope to not sound too smug here, but EVERYONE–yes, EVERYONE–said, “Do not mess with Marshall Field’s in the Midwest. We are not interested in having it downgraded to Macy’s. We will not shop there if you downgrade our Marshall Field’s.” However, Macy’s said it knew better than we did what was good for us and what we wanted.
In Minneapolis, we had the excellent good fortune of having more than 100 years of Dayton’s, the parent company of today’s Target, who later bought Marshall Field’s and adopted that name. These were some savvy retailers who knew retail, merchandising, finance and also community service. These people and their stores were much beloved for their style, their style of conducting business and their contributions to the City of Minneapolis, making us a cultural mecca with orchestras, theaters and museums that would have otherwise been out of reach.
Then Macy’s came along and in only a few months dismantled everything. Now the stores are filled with overpriced cheesy merchandise, the company is the butt of jokes, people tell Macy’s horror stories at parties and their stores are empty of customers. People in Minneapolis have an intense dislike of Macy’s and a poll conducted by the Center for Retail Excellence at St. Thomas University shows very dismal prospects for Macy’s in this town. They also conducted a poll before the change from Field’s to Macy’s and their interpretation was that Macy’s would be making a ridiculous mistake to drop the name Marshall Field’s and lose the brand loyalty.
I think what we all have to realize is that Macy’s is a publicly traded company. They are thereby obliged to come up with “radical” campaigns to assuage the overpaid and naive financial analysts.
Department stores the world over have a challenge to stay relevant. They just take up too much space. Their interiors are boring and bland and rarely are in the same league as their merchandise.
Macy’s is bleeding a long slow death and before you know it they will rent out their ground floor space to Zara and H&M.