Lots of companies sell merchandise, but only one promises to give consumers the “Magic of Macy’s.” Along with omnichannel retailing and a tradition of elegant, historic stores, Macy’s is synonymous in pop culture and up-to-date retailing with quality, value and exemplary customer service.
The company gets the most attention for events it creates and produces and for themes such as American Icons, which was an opportunity to celebrate the people and places that make America great. The spring campaign also included exclusive merchandise from American designers, in-store and community events, interactive digital content, patriotic advertising and a give-back program with “Got Your 6” to support America’s veterans.
Another example of Macy’s entertainment savvy is the hit NBC television show, “Fashion Star,” in which fashions bought by Macy’s buyers on each episode of the show can be purchased online during the broadcast. For its famous Macy’s Passport Presents Glamorama fashion extravaganzas, which take place annually in four cities, the company typically partners with such big entertainment names such as Cirque de Soleil and Sheryl Crow, this year’s headliners.
The company’s Indian-themed flower show this year, its Brazilian-themed flower show last year, Christmas windows and displays all create reasons for customers to flock to the company’s stores. Its partnership with the “Got Your 6” awareness initiative, part of the American Icons campaign, is working to change the conversation around America’s millions of military veterans, raising $3.4 million this past spring
The company is continuing its three-pronged strategy: My Macy’s, Omnichannel and Magic Selling. My Macy’s refers to the company’s focus on responding to its local customers’ needs and personalizing the Macy’s shopping experience in each of its 800 stores and online. This includes placing merchandising personnel around the country where Macy’s stores are located so they can understand the differences in each market and respond to them with varying product selection and unique promotions.
For example, 3 percent of Macy’s customers nationwide buy bow ties, the company calculates, but in North Carolina, 19 percent do. Why? Because they look good with a seersucker suit. “It’s a cool way to dress, and it looks very appropriate in North Carolina, bowtie and seersucker suit,” Macy’s Chairman, President and CEO Terry Lundgren maintains. “You get beat up in New York City walking around like that. We nailed it – we got it because of our local talent there driving these decisions.”
How would a tie buyer in New York know that unless he or she were located closer to that market?
Merchants can know the department personnel at each of the stores for which they are responsible, visit the showrooms of their suppliers and know the trends of the territory they are covering.
Macy’s executives know that consumers shop through a multitude of media: stores, websites, smart phones and tablet computers. That is why the company has adopted an aggressive omnichannel retailing strategy. Whether online, mobile or in-store, the Magic of Macy’s will be present.
Omnichannel retailing includes the technology that Macy’s uses to fulfill orders from other stores or even online so that wherever the inventory is and whatever channel the customer is shopping, Macy’s can get it to the customer who wants it. When a store is out of a particular item, or one is ordered online, the product can be fulfilled from the Macy’s store that has a surplus of that product.
The company participates in the customer conversation through a variety of social media initiatives including Facebook, Twitter, Instagram, Pinterest and its own Macy’s mblog. Macy’s reports that 30 percent of its customers who use online and digital methods to shop the brand are new customers. Its Facebook fans number 11.5 million, the company says.
Those fans had the opportunity to vote on some of the music that is played in the stores. Local indie music groups and fashion shows at the stores are publicized on Facebook, along with additional types of new brand marketing such as iHeartRadio.
Field intelligence and social media data are being integrated into the purchasing of merchandise and the stocking of various apparel sizes.
Brands All Over
Macy’s sells its own brands as well as name-brand merchandise, such as ABS by Allen Schwartz, Rocket Dog, Carlos by Carlos Santana, Marilyn Monroe, Paris Hilton, Tommy Hilfiger, Ralph Lauren’s Denim and Supply, Rachel Rachel Roy and BCBGeneration. Macy’s also has embraced certain brands – like Hanes underwear – for which millennial customers simply will not accept any substitute.
As an example of how the My Macy’s program is personalizing the retailing experience for customers, Macy’s men’s departments are No. 2 in sales of Hanes underwear in the United States, the company says. To meet its goal of being No. 1 in menswear, Macy’s district teams are ensuring they have the correct mix of merchandise by seeking out feedback from the field.
Additionally, Macy’s executives have sat down with their top 20 suppliers and explained to them what they wanted to accomplish with their partnership in assortment and marketing. The executives pointed out how they wanted their vendors’ field organizations to sync with theirs so both companies could prosper from the field intelligence Macy’s store and department managers were providing.
One example of how that works is the sale of polo shirts. Reports from stores in various cities and regions indicated that shirts in the colors of the local team sold best. So a supplier who wanted each Macy’s store to accept a variety of colors of polo shirts instead agreed to vary its supply according to the colors most popular in those cities and regions.
Another example is Greg Norman golf wear. The Palm Desert, Calif., store has a larger golf wear department than Macy’s flagship Herald Square store. Why? There are 109 golf courses in Palm Desert, and golf is the sport of choice for many residents.
Exclusive Within Brands
To stand out from competitors who carry the same brands, Macy’s carries products within those brands that are exclusive to it. Certain sizes and styles of Levi’s jeans – 20 percent of the Levi’s products Macy’s carries – are exclusive to Macy’s. In Dearborn, Mich., near Detroit, 55 percent of the Fairlane Town Center store’s Levi’s sales are of the 501 style of jean. At the Somerset Township store – which also is located in the Detroit area – the sales of those jeans are 2 percent.
In Miami, 14 percent of Levi’s sales are of the company’s slimmest fit. In St. Louis, only half a percent is that same slim fit. In Cincinnati, 80 percent of sales of Sperry Top-sider shoes are in brown, but in Miami, every color of Top-sider except brown is popular. By obtaining field intelligence on what customers really want – which can vary from store to store – Macy’s boosts its sales through customer relevance.
Another strategy is relying on alliances with companies that specialize in a particular product. Macy’s has entered into an arrangement with the Finish Line athletic shoe retailer to provide that footwear in its stores.
One of Macy’s most successful private brands currently is Hotel Collection, which includes bedding, bath and other home items. Macy’s carried Hotel’s red bed, and it was so successful that it was increased from the original 50 stores that stocked it and the 25 stores that displayed it without inventory to 400 stores.
The company also discovered from its website that extra deep sheets were proving popular. It used this information to stock the product in stores. It also discovered that comforters and duvets account for 40 percent of the company’s bedding sales and is experimenting online with 20 different bedding patterns to see which ones are most popular.
Macy’s is creating brands around demographic groups that it has determined are underserved or will make up a growing consumer base, such as millennial consumers from 13 to 30 years of age. Macy’s “mstylelab” department is designed to appeal to the younger side of this demographic, along with American Rag apparel, the Material Girl accessories line and Mack, whereas its “Impulse” department appeals to its contemporary 20- and 30-something consumers.
Customers coming into Macy’s can obtain great values but also great experiences. Macy’s sales associates make shopping there an experience – that is what the company calls “Magic Selling.” Macy’s sales associates ensure every customer coming into their stores feels better when he or she leaves. Sometimes, customers feel a lot better.
Macy’s executives tell the story of a woman who received a make-up demonstration but could not afford to buy the cosmetics because of the expense of the six months of cancer treatment she had just completed successfully. That sales associate gave the woman a large supply of the cosmetic samples for free. Her husband returned later and reportedly spent $500 buying the largest sizes available of the cosmetics because of the difference they made in his wife’s self-esteem.
This is an example of a policy being implemented at more than 80 of the company’s stores in which every sales associate is empowered to make decisions that previously would have required a call to a manager. Sales associates are urged in their training to make it right for the customer.
Being passionate about selling is encouraged among sales associates. Once they have been taught sales skills, they are educated about the importance of understanding the emotion behind a sale. Customers don’t always buy from the head – they buy from the heart, trainers remind associates.
In fall 2010, Macy’s took its 100,000 sales associates off the showroom floor for one to four hours of training and coaching. The company now does this twice annually, in the spring and fall, at a reported cost of tens of millions of dollars.
Macy’s is encouraging its stores to submit what it calls “magic-maker stories,” such as the one mentioned previously about the cancer survivor receiving make-up. In the first month of the new policy, Macy’s received 3,500 magic-maker stories nominating an associate for the honor. The company’s districts then chose their favorite magic-maker story, the regions selected the best of those and the regional winners went to corporate for a final selection by executives there.