Executive Summary
Macy’s Department Stores have been around for several years. The founder,
Rowland Hussey, knew his company would be a success, and that is why he gave it the
star as a symbol. Macy’s is one of the best retail stores when it comes to the products
they carry and customer service. They carry many products from clothing, makeup,
and shoes to furniture, bedding and kitchen. The company has been leading the way
for others to follow for years. Macy’s was the first to hire a woman to an executive
position and quote prices in newspaper ads. They also remember their customers
during the holidays by hosting the annual Macy’s Thanksgiving Day Parade and Fourth
of July Fireworks show.
Macy’s competes in a mid-range to upscale apparel and beauty market. Their
main competitors are JCPenney, Belk, Dillard’s, Nordstrom, Neiman Marcus, and Saks
Fifth Avenue. The company’s demographics are broken down into four groups: the
High Rise Renters, Wealthy Seaboard Suburbs, City Lights, and Urban Melting Pot.
When it comes to technology, Macy’s is open to try just about anything. Their
tech savviness is one of their strengths and always leave the customers in awe. With
technology continuously adapting there are countless opportunities available. With
that being said, there are always threats as well. The retail industry is very
competitive and Macy’s may lose customers permanently if they do not carry the
certain brands they are in search of.
The breakdown in communication concerning sales and advertisements is one
of Macy’s weaknesses. The other weakness is the scheduling of associates. A balance
cannot be met between the number of associates scheduled to work and the
estimated store traffic.
The marketing objective for this plan is to increase sales by 10% during the
month of February, when store traffic is at its least, with the help of Macy’s Stars-InA-Row. Customers will be able to participate throughout the month of February
whenever they make a purchase at a Macy’s store. Customers will then be able to
redeem 10-35% off discounts or even a $50 gift card. Through Macy’s Stars-In-A-Row,
customers will be encouraged to come back to a Macy’s location.
Internal Environment
Organizational Background
Macy’s, Inc. was founded on March 6, 1929, by Rowland Hussey Macy. It started
out as a small dry goods store and has evolved into one of the largest department
stores in the world. Mr. Macy had a red star tattoo (symbol of success) from his sailor
days, and that continues to be the Macy’s symbol today.
There are about 800 Macy’s department stores and furniture galleries in 45
states, D.C., Guam and Puerto Rico. It also includes a diverse workforce of
approximately 171,000 employees.
In 1994, Macy’s merged with Federated Department Stores, and moved its
headquarters to Cincinnati, OH. Macy’s also has a headquarters in New York. In 2007,
Federated Department Stores changed its corporate name to Macy’s Group, Inc.
Macy’s is known as a customer-centric organization and for having very strong
leadership development. Thanks to these developments, the company has earned the
nickname as the “Harvard of Retailing.” Macy’s believes “that great leadership equals
great performance...” (Macy’s). To continue with the outstanding leadership
tradition, Macy’s has developed the Leadership Institute. The Leadership Institute is
“an award-winning ‘corporate university’- to strengthen leadership and business
management skills for their top 2,000 executives” (Macy’s).
Through Macy’s leadership, the company has accumulated a number of first
including:
● The first retailer to promote a woman to an executive position
● The one-price system, where the same product was sold to each customer for
the same price
● Quoting prices in newspapers advertisements
● First to introduce the tea bag, the Idaho baked potato, and colored bath towels
● First retailer to hold a New York City liquor license
Some annual events Macy’s host include the Macy’s Thanksgiving Day Parade in
New York City and the Fourth of July Fireworks show. These events have been hosted
since 1924 and 1976 by the company.
Internal Environment
Products
Macy’s products include:
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Women Clothes
Men Clothes
Junior Clothes
Children Clothes
Shoes
Jewelry
Handbags
Fragrance
Makeup
Bed and Bath
Kitchen
Wedding Registry
Dining
Furniture
External Environment
Markets
The markets that Macy’s competes in are apparel and beauty. The
company is known for providing diverse merchandise to fit everyone’s
style.
External Environment
Competitive Environment
Macy’s is a mid-range to upscale department store. They compete with
cost efficient JCPenney, Belk and Dillard's, as well as upscale competitors
Nordstrom, Neiman Marcus, and Saks Fifth Avenue.
External Environment
Economic Environment
According to recent fourth quarter results, Macy’s has done very well
within its economic environment. “Macy’s has been beating estimates for
same-store sales for several months, posting year-over-year comparable
store sales growth of 3.7 percent. In its peer group, Macy’s is one of the
industry’s star performers. (Macy’s Wins)”
External Environment
Demographic Environment
According to Esri’s Tapestry Segmentation, there are four types of people
that shop at Macy’s: High Rise Renters, Wealthy Seaboard Suburbs, City
Lights, and Urban Melting Pot.
High Rise Renters
These are a diverse mix of races and ethnicities that speak a language
other than English. “Household types are mainly single parent and single
person; however, a higher-than-average proportion of other family
households is also present.” The median age is 30 years old, and the
average family size is 3.53. “Most employed residents work in service,
professional, and office/administrative support occupations. The median
household income is $26,297. “Because of unemployment, 18 percent
receive public assistance.” Over 60 percent age 25 and older have
graduated with a high school diploma, 33 percent attended college, and
12 percent received a bachelor’s or graduate degree. “They buy
household items and apparel at discount stores and affordable
department stores and will also search the clearance racks at Macy’s.”
Wealthy Seaboard Suburbs
“Ethnic diversity is low; most are white.” They are older and established
with the median age being 43.3 years. Two-thirds are married and more
than half of the married couples do not have children. The median
household income is $96,498. “Approximately 60 percent of the
households receive supplemental income from interest, dividends, and
rental properties; 23 percent collect retirement income. More than half
of those who work hold professional or management positions.” “They
love to shop online, by phone from high-end catalogs, and especially at
Macy’s.”
City Lights
People in the City Lights category are a part of a dense urban market that
is composed of diverse housing, household types, and cultures.
“Households include families and singles, similar to the US distribution by
household type.” The median age is 38.6 years, and they have fewer
children. “The ethnic or racial diversity is slightly higher than the US
level, with higher ratios of Asian, Hispanic, and multiracial populations.”
They work in white collar and service occupations with a median
household income around $63,959. “They shop for clothes, shoes,
jewelry, and toys at stores such as Target, Macy’s, and Costco.”
Urban Melting Pot
These are recently settled immigrants that have came to the United
States in the last 10 year. The median age is 36.8 years. They are
“distinctly diverse, more than one in four are Hispanic. Whites represent
47 percent of the population; Asians, 30 percent; and 6 percent are
multiracial.” 45 percent are married couple families and 30 percent are
singles who live alone; they remaining are a mix between single parents,
other family types and shared households. The median income for Urban
Melting Pots is $44,349. “Wages and salaries provide income for most
households. Some receive income from Supplemental Security Income and
public assistance.” The education levels vary. Nearly half of the
employed residents work in the service industry. Three-fourths of Urban
Melting Pot households rent. “Fashion conscious yet cost conscious, Urban
Melting Pot residents love to shop. Macy’s is one of their favorite
shopping haunts.”
External Environment
Social and Cultural Environment
Macy’s provides many families with Thanksgiving and Fourth of July
traditions. They have been sponsoring the Macy’s Thanksgiving Day
parade in New York since 1924 and the Fourth of July fireworks show
since 1976. These events have become significant moments in today’s
society and have given us something to look forward to every year.
External Environment
Political and Legal Environment
● In November 2012, 350,000 people signed a petition urging Macy’s
to fire Donald Trump as a celebrity spokesman.
● In December 2011, Natalie Johnson, a former San Antonio Macy’s
employee, refused to let a transgendered woman change in the
women’s dressing room. This violated Macy’s LGBT policy, and she
was fired. This brought Macy’s under fire from the LGBT and
Christian communities.
● In January 2012, Macy’s sued Martha Stewart for a breach of
contract because Stewart entered into an agreement with JCPenney
to sell products in its stores.
External Environment
Technological Environment
One reason for Macy’s success is its ability to adapt with the ever
changing technological environment. Macy’s is one of the most successful
Omni-channel retailers. Omni-channel allows associates to check
different stores, fulfillment centers, and online for products the customer
wants. There are currently 292 stores capable of fulfilling orders; it is
expected to increase to 500 by this fall. Macy’s is always in search for the
next technological advancement that will make customer’s shopping
experience better. The associates at a few Macy’s stores will now be
equipped with iPods that will make shopping much easier and faster for
the associate and the customer. These iPods will be able to complete
credit card and Macy’s card transactions for an easier checkout.
S.W.O.T. Analysis
Strengths
Macy’s biggest strength is their use of technology. With the use of Omnichannel retailing, customers can “shop seamlessly in stores, online, and
via mobile devices” (Macy’s). If a store is out of a particular merchandise,
an associate can look on a register and see which stores out of all the
800+ Macy’s has it. They can then proceed and have it sent to the
customer’s home instead of it being shipped to the store. This process is
called “search and send.” Associates at select stores are now armed with
mini iPod registers that makes purchasing and retrieving merchandise
easier and more time efficient.
Macy’s employees also offer the company another strength. Thanks to the
in depth training they are put through, they are able to insure the
company’s efficiency.
S.W.O.T. Analysis
Weaknesses
Communication is one of Macy’s weaknesses. Many employees are
unaware of the sales that Macy’s advertise. Customers approach
associates with sale questions, and associates do not know how to reply.
This results in the employee and the company looking bad. Also
communication does not take place within a timely manner.
Another weakness is the company’s scheduling system. Usually there are
too many associates scheduled to work or too few. Too many associates
are usually scheduled on non-sale days when traffic is not high. This leads
to increase competition amongst associates trying to reach their sales
goal. On sale days, not enough associates are scheduled. Employees have
to juggle multiple customers, which often results in someone becoming
angry.
S.W.O.T. Analysis
Opportunities
Macy’s has countless opportunities to expand and become better, and
they are taking advantage of those opportunities. Technology gives
Macy’s their never ending opportunities. As technology trends continue to
happen and enhance our world, Macy’s will continue adapting by using it
to enhance customers shopping experience.
Soon all Macy’s will be equipped with virtual dressing rooms
S.W.O.T. Analysis
Threats
Macy’s competes with a host of retail competitors such as Dillard’s, Saks,
Nordstrom, Neiman Marcus, and other high end retail stores. They now
have to worry about online retailers as well. The competitors really have
an effect on Macy’s when it comes to products Macy’s do not have and
the customers know other stores do. Toms Shoes can be used as an
example. Macy’s do not carry Toms, and when customers find out they
say they will go to Dillard’s or Nordstrom instead.
Macy’s business is seasonal. Majority of the merchandise is sold
during the fall and holiday season. The company “incurs significant
additional expenses in periods leading up to the months of November and
December in anticipation of higher sales volume, additional inventory,
ads, and employee” (Macy’s). This is a threat because in the event Macy’s
does not have a good holiday season, this could impact the company’s
finances.
Marketing Objective
Increase sales by 10% at all Macy’s stores during the month of February
with the use of our Macy’s Stars-In-A-Row game.
Marketing Strategies
Product
Each Macy’s department store and furniture gallery will participate
in Macy’s Stars-In-A-Row. The object of the game is to get customers to
return to the store and make a purchase throughout the month of
February, when sales are at their lowest. Customers will have the
opportunity to get a game card on which will have different task. A
special sticker will be placed on each completed task by a sales associate
at checkout. Each task will correspond with a reward. The goal for the
customer is to complete task that results in three in a row. Discount
rewards will range from 10-35% off. If a customer completes the entire
game card they will receive a $50 gift card as well.
Marketing Strategies
Target Market
The target market for this marketing promotion will be females, ages 1860, who live in the surrounding areas of Macy’s stores. Since Macy’s have
a wide selection of products, all women who love to shop for quality
merchandise at department store retail chains will be targeted.
Marketing Strategies
Price
Macy’s Stars-In-A-Row will cost approximately $60,500,000
The average advertising commercial cost is $350,000 for 30 seconds. If
the commercial is shown on the six networks mentioned below two times
a day for two weeks, commercials would be approximately $58.8 million.
Each region will be in charge of their own newspaper advertisement to
cut down the cost. The game boards will cost $1,402,500 for 3,000,000. It
will be $30,500 for 31,500,000 stickers, and $267,000 for a miscellaneous
fund.
Macy’s spent around $1.51 billion on advertising last year.
Marketing Strategies
Promotion
We will have TV advertisements that will start airing two weeks before
the month of February. The commercials will air on ABC, CBS, NBC,
Bravo, Oxygen, and ABC Family. Macy’s will also have a monthly
catalogue and newspaper advertisements in the local newspapers. The
monthly catalogue will contain a game board for the customer to tear out
and use. The regular newspaper ads will advertise the game and tell the
customers to be on the lookout for the catalogue containing the game
board. In every Macy’s store there will be signs that advertise the game
when customers first enter. There will also be banners on Macys.com, and
a link for customers to print out their own game board.
Marketing Strategies
Distribution
Customers will have several opportunities to receive game boards; there
will also be some available at checkout counters as well as online and in
the monthly catalogue. Whenever a customer makes a purchase the sales
associate will place a specialty sticker over the corresponding task
completed. During the month of March customers may redeem their
discounts when they return to a Macy’s with their game card. If a
customer succeeded in completing the entire board, managers will be
equipped with the $50 gift cards to hand out. Whenever a customer
redeems their discount or gift card, the game board will be taken by the
sale associate or manager so the customer cannot receive multiple prizes.
Customers will have until August 31 to redeem their rewards.
Timeline of Events
● January 18, 2014- Commercials start to air
● January 19, 2014- Newspaper ads are printed
● January 26, 2014- February catalogue is distributed
● February 1, 2014- First day of Stars-In-A-Row Game event
● February 28, 2014- Last day of Stars-In-A-Row Game even
● March 1, 2014- First day prizes can be redeemed
● August 31, 2014- Expiration date of Stars-In-A-Row prize redemption
References
● http://www.esri.com/data/esri_data/pdfs/tapestry/segment20.pdf
● Macy’s Wins with Technology. Loeb, Walter.
www.forbes.com/sites/walterloeb/2012/07/10/macys-wins-withtechnology/
● www.macysinc.com