As Macy’s entered fiscal 2011, it developed four primary strategies it believes will propel sales. The first is My Macy’s Localization, which was piloted in 2009 and rolled out nationally in mid-2009. The concept is based on tailoring the merchandising assortment and shopping experience in each Macy’s location to the customers who shop there.
The second is to focus on distinctive and exclusive merchandise. Throughout 2010, the company launched numerous market brands that can be found exclusively in its stores, including Kenneth Cole Reaction, Sean John men’s sportswear, and Material Girl, a junior’s collection from Madonna and her daughter Lordes. In 2011, it plans to feature rotating merchandise lines throughout the year from leading designers in Impulse, its contemporary fashion department, including a private brand called Bar III for women and men. Its success in 2010 was evident as 43% of its sales were in exclusive or limited distribution brands and labels.
Magic Selling, which is an acronym for Meet and make a connection, Ask questions and listen, Give options and give advice, Inspire to buy, and Celebrate the purchase (sales associates are instructed to make more natural connections with shoppers), is third on the list. In 2010, the company trained more than 130,000 store associates and has a refresher course planned for 2011.
Omnichannel integration is the retailer’s fourth strategy, which is intended to continue boosting sales at both Macy’s and Bloomingdale’s stores; both saw a 20% rise in online sales on each of the past three years. Key to the success of this strategy is continuing to integrate sales channels, blurring the lines between its stores, the Internet, and mobile technology so it can better respond to its customers’ needs according to their shopping preferences.
“Over the past five years, we have taken extraordinary steps to reinvent our business and organizational structure at Macy’s, Inc.,” said Terry Lundgren, chairman, president, and CEO. “Between 2005 and 2009, we nearly doubled our size through the May Company acquisition, transformed Macy’s into a nationwide brand by converting the nearly 600 stores from regional nameplates, centralized our organization for clarity and speed in decisionmaking, adopted a breakthrough localization strategy called My Macy’s, and significantly expanded our capabilities in e-commerce and digital marketing. The impact of all of these fundamental changes began coming to fruition in 2010. Simply put, it was a terrific year.”
Indeed, Macy’s same-store sales rose 4.6% and operating income rose by 78% to $1.894 billion. But Lundgren said the best part of the company’s 2010 success came from developing a culture of growth. “We believe the strategies that led to our success in 2010 are still in the early phases of implementation, with plenty of runway ahead to produce further improvements in sales, earnings, and cash flow as our execution sharpens.”