Presented by: Alex King, Laura Robinson, Jennifer Yu, Brittany Frownfelter

Macy’s : The History

• Opened in New York

City in 1858
• Claimed to be an
innovator
• Acquired by
Federated
Department Stores,
Inc. in 1994
• Became Macy’s, Inc.
in 2007
Competitors

• Mid to High range

department store
• Main competitors
include: Nordstrom’s,
Belk, Dillard’s
• Less extent: JC
Penney, Kohl’s,
Sear’s
Current Technology
• 1997: Online retailer
through macys.com
– Home, Bed & Bath
– Women, Juniors, Mens,
Kids
– Beauty & Fragrance
– Shoes
– Handbags & Accessories
– Jewelry & Watches
– Deals & Promotions
– Gifts Cards
– Wedding Registry
– American Express Card
• Mymacys.net for
employees
Maintaining Growth

• Acquired Broadway, Emporium,

Weinstocks
• 2005: Acquired Hecht’s and Lord and
Taylor
• Grown from 240 locations in 2005 to
over 800 locations now
• Every geographic location nationwide
• Must maintain superior customer
service and continuously adapt to
change in fashion for target market
 Target Market
• Age 35-54
– Many different departments to
serve wide range of markets
• Higher than average income
consumers
– Cosmetics
– Accessories
– Clothing
• Emphasis on “affordable fashion”
• International expansion
 Retail Format
• Enclosed shopping
mall/outlet
• Broad and deep assortment

• Service representatives in
different departments

•Spine layout
•Higher than average pricing
strategy
•Coupons and store credit card
 Competitive Advantage
• “Strongest year-over-year-
sales growth at 7%”
• Exclusivity
– Private labels
– Exclusive deals on brand
names
• Example: Tommy
Hilfiger, Sean John
Profitability Macy’s Industry Median Market Median
Gross Profit 40.51% 36.02% 28.77%
Margin
Net Profit Margin 1.49% 2.59% 5.53%
Return on Equity 7.5% 10.5% 10.1%
Return on Assets 1.6% 3.7% 1.5%
Return on 2.5% 6.1% 4.4%
Invested Capital
Macy’s at PG Plaza Location
 Tactical Problems
• Insufficient inventory in Women‘s Clothing
– lost sales
– disappointed customers
NOTE: Macy's is a leader in inventory
management overall
 
• No fitting room attendant
– Merchandise susceptible to theft
– Garments not returned to racks promptly
– Possible fitting room and merchandise damages
What could happen…
 What could happen…

"After I removed my shoes so I could try on the clothes, I

stepped in a wet puddle on the ground. I was not sure of
it at first, because I thought I may have just stepped on
some cold metal, so I touched my foot. My hand became
wet, and it smelled like urine.“

–Macy's customer, Bridgewater, NJ

http://www.planetfeedback.com/macys+east/cleanliness/condition/urine+in+fitting+room/159337
Recommendations: PG Plaza

•Hire fitting room attendant

•Job description: “Supervise
the fitting room area, count &
limit the amount of clothes
customers bring into the fitting
room, thorough check of
stalls.”
-careerleak.com
•Improve inventory management
•Emphasize advantages over Big
Box Retailers
•Customer service
•Located in mall
 Retail Mix

Store Location
Merchandise Assortment
Store Layout and Design
Customer Services
Pricing
Promotion
 Store Location
•Shopping Mall location
•Produces additional traffic
•Mall events bring more people
•More expensive
•Overall the decision to locate in a
mall is not one they should change
 Merchandise Assortment
•Macys sells a huge variety of products
•Men’s, Women’s and Children’s clothing
•Accessories
•Cologne and Makeup
•Shoes, Jewelry and Watches
•They have a broad and deep assortment
•Need to improve the sizes of clothing in the Women’s section
Store Layout and Design

•A spine layout
•Main aisles and the
rest of the store is split
into different sections
according to the
category (Ex. Men’s,
Women’s)
•Is easy to navigate
and understand for the
customer
 Customer Service

•Macys has sales

representatives in each
department who ring
customers up, and assist
them with making
purchases
•Lack of effectiveness
from these associates
•Not present
•Do not know the
area
•Are not outgoing
Improving Customer Service

•Empower employees to understand that the

department is theirs and they are responsible
for its success
•Develop store leaders better so they can
teach and coach employees effectively
•Create powerful incentives so that they
engage customers to make sales
 Pricing

•Utilize both luxury and economic pricing

•Have luxury brands that bring in wealthier
customers
•Have economic pricing so that lower income
individuals can shop in a nice store for high
quality cheaper merchandise
•Two pricing points help to increase the market
they can sell to
 Promotion
•Sales promotions
•Have annual, semi-annual,
and strategically timed
promotions to gain traffic
•Are very popular and
effective
•Celebrity endorsements
•Have had many celebrities
endorse products
•Is a good idea, but is
expensive and they need do
their due diligence to be
sure that each celebrity
signed is worth the price
THANK YOU!!