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Running Head: Case Study
Case Study:
Macy’s Customer Service
DeVry University Online
Customer Relations
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Running Head: Case Study
Abstract
Good customer service results in ensuring customer satisfaction. Customer satisfaction in return
has the capacity to foster customer loyalty which brings the customers back to the shop once and
again. Customer service can be toned up by various measures like employee service, store
experience and servicescape. All these factors are taken up for discussion in the paper with
regards to Macy’s. Based on the study of the existing customer service at Macy’s, certain
suggestions have been made for improving their customer service.
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Table of Contents
1. Customer Service – An Introduction .......................................................................................... 4
2. Interviewee from Macy’s ............................................................................................................ 4
2.1. Role and importance of customer relations/customer service to Macy’s ............................ 4
2.2. The top three concerns for the customer service department at Macy’s.............................. 5
2.2.1. Ratio between customer and assistants ......................................................................... 5
2.2.2. Customer loyalty ........................................................................................................... 6
2.2.3. Merchandise reputation ................................................................................................. 6
3. Current trends in the Retailing Industry...................................................................................... 6
4. Trends impacting customer service, customer satisfaction or customer loyalty ........................ 7
In Retail Business ........................................................................................................................... 7
5. Current business trends for the Macy’s ...................................................................................... 8
6. Suggestions to Macy’s regarding customer service .................................................................... 9
References ..................................................................................................................................... 10
Appendix……………………………………………………………………………………........11
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Running Head: Case Study
1. Customer Service – An Introduction
Retailing is one of the most dynamic businesses in USA. Increasing number of
consumers and their diversified needs created the need for more and more retailers. The advent
of internet with its extensive reach and online shopping facility helped the retailers in widening
their customer bases. As more and more customers began patronizing the retailers, they began
specializing in their activities (Selden, 1998). The retailing industry today consists of three
categories namely food retailers, general merchandise retailers and non- store retailers. Macy’s
Inc (Macy’s) belongs to the general merchandise retail category (Krafft &Mantrala, 2010).
Since retailers deal mostly in branded goods, very little scope is left to them to attract customers
by price differentiation. The only alternative available to them to impress customers is through
better customer service.
This paper consists of an interview with Ms. Carline Alexander, who is customer
relations executive in the Junior section at Macy’s. The transcript of the interview with customer
relations executive is enclosed as Annexure. The information on customer service secured
through the interview is corroborated with researched material on customer service from
scholarly and academic resources. The paper makes an attempt to discuss the importance of
customer service and good customer relations for the success of retailing business taking the
specific case of Macy’s.
2. Interviewee from Macy’s
2.1. Role and importance of customer relations/customer service to Macy’s
The customer relations executive Ms. Carline Alexander has conveyed that strong
customer relations are critical for Macy’s and it is vital for the organization. She also told that
personnel at Macy’s always communicate with their customers and are available for their
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customer needs. Apart from this she informed the excellent training is imparted to the employees
at Macy’s to tune them well to attend the customer needs. The website of Macy’s that is
http://www.macys.com/ provides a “tell us what you think” link in which customers provide their
feedback and suggest on how Macy’s can improve their customer relations (Alexander, 2011).
The customer executive also told of the process of ‘MAGIC’ Selling where they can serve
the customers better (Alexander, 2011). The principles of this ‘MAGIC’ Selling are
Meet and make connection
Ask questions and listen
Give options, give advices
Inspire to buy and sell more
Celebrate the purchase
2.2. The top three concerns for the customer service department at Macy’s
The top three customer relations/customer service issues faced by Macy’s are ratio between
customer and assistants, customer loyalty and merchandise reputation (Alexander, 2011).
2.2.1. Ratio between customer and assistants
The Company’s sales fluctuate depending on the festive season and normal times. When
the business becomes brisk, it is not possible sometimes to increase immediately the number of
assistants to cope up with the rush. So, for brief periods on such occasions, the adverse ratio of
the assistants to customers causes inconvenience (Alexander, 2011).
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2.2.2. Customer loyalty
Customer loyalty is always an issue for any retailer and Macy’s is no exception. There
seems to be something asking on the customer loyalty front always (Alexander, 2011).
2.2.3. Merchandise reputation
Inspite of the care taken by the company to ensure good quality for the products, slip-ups
do occur and the company faces the wrath of the customers. The Company deals mostly in
branded goods and quality deficiency is not due to any mistake on their part (Alexander, 2011).
3. Current trends in the Retailing Industry
Departmental stores can be classified into three categories. The first category comprises
of high fashion chains providing for costly designer ware type merchandise along with excellent
customer service. Retailers like Bloomingdale’s, Neiman Marcus and Saks Fifth Avenue fall in
this category. The second category comprises of retailers, who sell merchandise at moderate
prices with lesser customer service. Macy’s (Part of Federated Department Stores), Dillard’s and
May Company fall into this category. The third category, which thrives on price differentiation,
includes Sears, JC Penny and Kohl’s (Krafft &Mantrala, 2010).
The strength of the brands, they sell, determines the performance of department stores.
To avail this opportunity, department stores enter into exclusive arrangements with popular
brands. Macy’s, on their part, had an arrangement with Tommy Hilfiger for launching its new Hline exclusively, with advertising support from Iman and David Bowie (Franklin 2011). In line
with some of the practices of the other departmental stores, Macy’s has successfully developed
their own private brands like INC (Women’s clothing) and Tools of the Trade (housewares)
(Krafft &Mantrala, 2010).
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Running Head: Case Study
4. Trends impacting customer service, customer satisfaction or customer loyalty
In Retail Business
With Department Stores, being increasingly dependent on branded goods to pep up their
performance, there may not be much price differential contribution to its performance. Therefore
the only area, which can give a competitive advantage to a departmental store, is customer
service (Buchanan, 2011).
Customer Service is too broad a term to immediately indicate anything. There are many
factors, which influence customer service both positively and negatively. There is extensive
literary research on various factors influencing the customer service.
The simplest definition of customer service comes from Turban (2002) mentioning that
customer service is a string of actions intended to increase the level of customer satisfaction,
which is a feeling expressed when a product or service meets the customer’s expectations. The
aim of the customer service is customer satisfaction, which finally leads to customer loyalty.
The series of actions mentioned above include mainly value of money, employee
service, service experience and servicescape.
Value for money may be considered as a trade-off between expected quality of the
commodity or service and its price (Zeithaml, 1988 as cited in Yang & Chang, 2011). Sweeney
et al. (1997 as cited in Yang & Chang, 2011) opined that value for money has a positive impact
on the customer’s psychology and prompts him to buy.
Service provided by employees has an important influence on the evaluation of service
quality by consumers (Broderick 1999 as cited in Yang & Chang, 2011). Employee service may
sometimes be interpreted a part and parcel of the store’s environment. Such environment has
significant influence on the mood and satisfaction of the consumer (Grewal & Sharma, 1997 as
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cited in Yang & Chang, 2011). Customer loyalty results from the personal friendship between
the employee and the customer (Butcher et al., 2001 as cited in Yang & Chang, 2011). There are
other researches which show that employee service influences customer satisfaction (Gwinner et
al., 1998), evaluation of service quality (Bolton et al., 2003 as cited in Yang & Chang, 2011) and
customer loyalty (Chandon et al., 1997 as cited in Yang & Chang, 2011).
Service experience, also called “service encounter” is the time during which the
customer has direct interaction with service (Shostack, 1985 as cited in Yang & Chang, 2011).
This service encounter, if it is pleasant from the customer’s point of view, creates customer
loyalty (Bitner, 1990 as cited in Yang & Chang, 2011). Store environment which includes the
stores ambience, employee’s service and music, has profound impact on the service experience.
Servicescape indicates the physical setting in the organizations (Becker 1981 as cited in
Yang & Chang, 2011). Even though it influence on customer satisfaction is not acknowledged to
the extent it deserves, it is found that servicescape has significant influence on service
experience.
Various activities mentioned in the preceding paragraphs are all apart of customer
service and intended to secure customer satisfaction, which in turn leads to customer loyalty. It is
customer loyalty, which influences the repurchase intentions of the customer. Retention of
customers by fostering customer loyalty is very important for the health of the business.
5. Current business trends for the Macy’s
Macy’s has reported impressive performance for the third quarter ending October 2011.
It reported a profit a $139 million at the rate of an EPS of 32 cents. During the same period in
2010, the corresponding figures were net profit at $10 million and EPS 2 cents. The sales for the
three month period increased to $ 5.85 billion compared to $5.62 billion in the third quarter in
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2010. The online sales increased by 39.8%. Encouraged by this performance, the company is
forecasting a rise of 4% to 4.5% in sales in the last quarter (Franklin, 2011). The increase in
business of the company is heartening; particularly in the background of economic downturn in
2011 and the fierce competition the departmental stores face from supermarket chains and
convenience stores.
6. Suggestions to Macy’s regarding customer service
Macy’s has a very strong customer service policy, providing for many facilities which
really please the customers (Franklin, 2011). Particularly their return policy which allows return
of goods to any shop irrespective of the store of purchase is impressive. But a scan through the
reviews on the company through Epinions indicates that online service is defective and response
there is not proper. Macy’s management should take care that that customer service principles
are scrupulously followed by the employees.
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Running Head: Case Study
References
Alexander, C. (2011, November 1). Personal Interview
Buchanan, L. (2011, March 1). A Customer Service Makeover: Seven tips on how to completely
transform your company's customer service. Inc. Retrieved November 7, 2011 from
http://www.inc.com/magazine/20110301/a-customer-service-makeover.html
Franklin II (2011, Nov 10). Macy's reports strong third quarter and is optimistic about holidays.
Los Angeles Times. Retrieved November 7, 2011 from
http://www.latimes.com/business/la-fi-macys-earnings-20111110,0,6711113.story.
Krafft, M. &. Mantrala, M.K.(2010). Retailing in the 21st Century: Current and Future Trends
(2nd ed.). London& New York: Springer Heidelberg Dordrecht.
Selden, P.H. (1998, December). Sales Process Engineering: An Emerging Quality
Application. Quality Progress, 59–63.
Turban, E. (2002). Electronic Commerce: A Managerial Perspective. New York: Prentice Hall
Yang, H-W & Chang, K-F(2011, September 9).A comparison of service experience on
repatronage intention between department stores and hypermarkets in Taiwan. African
Journal of Business Management, 5(19), 7818-7827. Retrieved November 8, 2011 from
http://www.academicjournals.org/ajbm/PDF/pdf2011/9Sept/Yang%20and%20Chang.pdf.
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Running Head: Case Study
Appendix
Company’s Name: Macy’s The Falls
Interviewee Name: Carline Alexander (customer relations executive in the Junior section at
Macy’s)
Phone Number: 305-278-3366
E-mail address: carlinealexander@macys.com
I enjoyed doing this case study. It was a great experience.
Interview Transcript
Interviewer: Student
Interviewee: Ms. Carline Alexander, customer relations executive in the junior section at
Macy’s.
Interview Setting: Interview conducted in human resources executive office of Ms. Alexander
at Macy’s The Falls. The interview was conducted at 3:40 PM (Easter time) on Tuesday
afternoon.
(Start of Interview)
Interviewer: Hello, How are you today? My name is Lucia Carias. I’m a Devry University
student. I’m taking my customer relation class and the purpose of this interview is to learn about
customer relations/customer service role in this company and also to complete my case study.
Interviewee: Hi Lucia, I’m fine thanks.
Interviewer: Can you describe the role and importance of customer relations/customer service to
this organization?
Interviewee: yes, sure. Strong customer relations are critical for Macy’s and it is vital for the
organization. Macy’s always communicate with the customers. You know, we offer excellent
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training to our employees. We created“tell us what you think” in which customers provide their
feedback and suggest on how Macy’s can improve their customer relations. We have a process
called MAGIC you know this process very well because you work in one of our stores.
Interviewer: Can you explain me what is the key success in Macy’s?
Interviewee: Excellent customer relations and good reputation.
Interviewer: What are the top three customer relations/customer service issues faced by this
organization.
Interviewee: Well, The top three customer relations/customer service issues faced by Macy’s are
customer and assistants, customer loyalty and merchandise reputation. The Company’s sales
fluctuate depending on the festive season and normal times. When the business becomes brisk, it
is not possible sometimes to increase immediately the number of assistants to cope up with the
rush. Customer loyalty is always an issue for any retailer and we are no exception.
Merchandise reputation occurs and the company faces the wrath of the customer.
Interviewer: Thank you so much for your time.
Interviewee: You’re welcome.