3. Macy’s History and Overview
● Rowland H. Macy opens R. H. Macy & Co. in 1858, as a dry goods store in New York City
● In 1861, the red star first appeared next to the Macy's logo, which was a replica of a tattoo Roland
Hussey Macy had on his forearm when he was a Nantucket sailor in his teenage years
● In 1902, Macy's became the nation's first building to have modern escalators—made of wood—installed
● In 1912, Isidor and Ida Straus, the former co-owners of Macy's, died in the sinking of the Titanic (today, a
plaque in their honor hangs inside the memorial entrance on the main floor)
● Since 1924, the Macy’s Thanksgiving Day Parade has been a tradition in New York City
● In 2008, Macy’s consolidated three divisions - Macy's North into Macy's East, Macy's Northwest into
Macy's West; and Macy's Midwest into Macy's South
● In 2017, Macy’s net sales were $25.78 billion. However, same-store sales fell 4.6 percent, more than the
forecasted 2.7 percent drop.
6. Marketing Plan Overview
● Macy’s stores profitability and revenues have been steadily declining every quarter, as compared to
previous years for the past 3 years.
○ Operating expenses have not decreased at the same rate, which has been eating into Macy’s net
profit.
○ This has forced Macy’s to close many stores. Most recently they have announced an additional
100 store closures during January 2017.
○ These declines signal a paradigm shift in the world of retail from physical to digital.
● Short-term Goals: Enhance Store Look and Feel; Invest more into Off-Price Model
● Long-term Goals: Lead in the Omni-Channel Retail Space & BOPS; Revamp In-House Lines
8. PRODUCT
● Provide a wide array of apparel for
women, men and children
● Provide goods for the home
● Provides beauty, hair, fragrances and
cosmetic products for men and women
● Gives customers the option to consult
with professional personal
stylists/shoppers
• Provide apparel, cosmetics, and
homegoods at affordable prices
• Constant sales, coupons and special
offers
• Allows for additional savings through
loyalty programs
PRICE
PLACE
● 728 stores across the USA
● Macys.com E-commerce
● Fulfillment centers
● International shipping available in over 100
countries
PROMOTION
● TV ads
● Radio ads
● Magazine ads
● Store catalogs/mailers
9. SWOT ANALYSIS
WeaknessesStrengths
Opportunities Threats
• Loyal and steady customer base
• Supply Chain
• Strong retail presence -728 stores
• Strong Internet presence and sales
• Integrates private labels
• Easy online/pickup ordering system
• Environmentally conscious/charitable
• The Parent Company only has two lines
of business (Macy’s and Bloomingdale's)
• Not enough revenue generation
• Limited global brand recognition
• High overheads associated with scale
• Immersive AR/VR Omni Technology
• International expansion
• Domestic Discount-Model Expansion
• Additional Private Label integration
• Product Extension
• Competition from other department
stores and ecommerce (Lord & Taylor,
Saks, Amazon etc)
• Post-Economic crisis has people
spending less money towards clothing
and more towards technology and
experiences
12. Porter’s 5 Forces
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Threat of SubstituteThreat of New Entry
Supplier Power Buyer Power
Competitive Rivalry
Low- It is Challenging for a
New Market Entrant to
enter the Department
Store Retailing Industry
with the size and
economies of scale
achieved by Macy’s
High- Niche and
Specialized, exclusively e-
commerce retailers as well
as Amazon are already
driving business away from
Macy’s
High- There are already
many players in the
Department Store and
Specialized Apparel
Retailer Industry who sell
many of the same brands
that Macy’s does
Low- The are many
upstream suppliers for
Macy’s which can be
switched if needed (with
the exception very few
brands, i.e. Ralph Lauren
Polo)
Medium- Customers have lots
of access to information and are
sensitive to Macy’s prices. In
contrast, Macy’s is the largest
Department Store in the U.S.
and each customer is
infinitesimal in relation to their
customer base.
14. Primary Research (Survey)
Questions:
● Do people prefer online shopping for clothing? If so, why?
● Do shoppers prefer shopping online at other retailers over Macys.com because they offer free
shipping & free returns?
● Do Macy’s loyal customers prefer shopping online at Macys.com over in-store at because they are
able to find what they want easier?
● Are recent store closings and competitors leaving malls making the general department store retail
concept less desirable?
Hypothesis:
● Customers shop online at Macy’s online over shopping in-store to save time. Accept or reject?
● Customers prefer to shop online at retailers that offer free shipping & free returns over e-retailers
who do not? Accept or reject?
26. Marketing Strategy
●Macy’s should reposition to change and re-emerge as the leading and
most profitable legacy retailer in the U.S. market.
○ This includes apparel, cosmetics, and home goods retail;
working to systematically eliminate the pain points in both
customer experiences.
○ Offer the best prices and service through BOPS
■ (Buy Online, Pickup In-store)
■ Immersive Retail Experience
27. Marketing Objectives
● Differentiate Macy’s experience in a retail landscape from competition.
● Position Macy’s as the dominant retail and entertainment giant; delivering
on convenience, innovation, valued selection and magical experiences.
(Between Macy’s and Macy’s Backstage)
● Find the right mix of category growth, new service extensions, and
entertainment platforms.
● Continue focus on the following brand characteristics: Magical, Service,
Convenient and Inspiring
● Revamp some of Macy’s In-House brands and remove others
28. Target Market
●Macy’s should continue catering to all segments of the market as they have
from the beginning. Customers should be affording enough(middle class
and upper middle class) and seeking to benefits from a seamless omni-
channel retail experience(early adopters).
●Macy’s can concentrate on specific customers through the revamped in-
house labels.
29.
30. Positioning Statement & Value Proposition
● Macy’s should position itself to become the
market leader in omni-channel retail.
● “Shop Wherever. Smarter.”
31. Marketing Mix
● Price: Prices should be aligned and responsive to Amazon and other
Department Stores.
o (Do away with heavy discounting model- Win on BOPS model avoiding “last mile” issue”)
● Place: Items should be displayed with strong visuals on mobile and
desktop stores. In-store, mobile devices should be responsive to display
inventory and best price available and “talk” to beacons.
● Promotion: Digital Video Ads displaying product and enhanced in-store
technology. (Build awareness and engagement through social media.)
● Product: The in-house labels should be heavily focused around personas
and each one should cater to very specific segment/customer type.
36. Implementation
● Outfit Stores with Leading Omni-Channel Technology
○ Responsive Beacons
○ Smart-Mirrors
○ Seamless BOPS(Buy Online, Pickup In-store experience)
○ AR/VR Technology
● Open more Macy’s Backstage Stores
○ Within select operating Macy’s
○ Standalone Locations
● Invest in Digital Promotional Content and Social Media Management
39. Budget Allocation
● Outfit Stores with Leading Omni-Channel Technology ~15%
○ $1.5B over 3 years
●Invest in Digital Technology ~15%
○ $500MM per years for 3 years
● Open more Macy’s Backstage Stores ~25%
○ $5-7MM per location for select existing Macy’s
○ $15MM per location for Standalone Locations
● Revamp In-House Labels
○ $20MM per label - 1 year investment ~10% of investment
40. Evaluation, Risks, and Contingencies
Evaluation of Plan Execution, Risks and Contingencies
41. Evaluation of Plan Execution
● Evaluation Techniques:
○ Quarterly & Annual Audits of Spend vs. ROI
○ Surveys and Interviews - In-store and Online
● If Expectations not met <10%
○ Rebalance budget to more digital and less omni spending
● If Expectations not met >10%
○ Sit down and create new marketing plan
○ Consider selling off non performing assets
○ Seek PE/Activist Investors
42. Risks and Contingencies
• If the trend away from Brick-and-Mortar Retail continues
• Consider selling off non performing assets
• Invest in Amazon/Kiva-like fulfillment systems
• Customer Data is Compromised
• Customers will avert digitally enrolling them in Store CRM Systems
• Partner with leading data privacy firms
• Retail Technology diverts from Omni due to cost and
maintenance
• If brick-and-mortar is still being pursued, devise ways for customers to spend
more time in-store(third place. i.e., coffee bars, nails salon, fast casual dining
options)