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Activity No 2 Case Analysis

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21 views

Activity No 2 Case Analysis

Uploaded by

Meyah Moreno
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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MM6

RETAIL MANAGEMENT

ACTIVITY NO. 2 | CASE ANALYSIS

Read the selection and answer the following questions below.

Rethinking Strategy at Macy’s

While many business leaders claim to embrace change, Macy’s CEO Terry Lundgren may have learned
that some parts of the past were valuable keys to customer loyalty.

Throughout its 150-year history, the midrange department store had grown by acquiring small
regional department store chains such as Bamberger’s in New Jersey (1929). O’Connor Moffat in San
Francisco (1945), and John Taylor Dry Good in Kansas City (1947). These stores were usually renamed
Macy’s within a few years. Besides economies of scale in advertising and back-office operations, the
Macy’s management thought that customers would be attracted to the cachet of a New Yor City icon
in their cities and towns. While there was often nostalgia for the traditional local retailer’s name, the
renamed stores generally proposed.

The purchase-and rename strategy continued throughout the 1990s as Macy’s merged with
Federated. Indeed, the merged department store giants were renamed. Macy’s Inc., a strategy was on
place to make the Macy’s name a national department store brand. However, the recent acquisition of
the May Department Store chain by Federated/Macys meant the demise of some highly regarded
regional chains: Filene’s, Jordan Marsh, The Broadway, Emporium, Hecht’s Woodward-Lothrop, John
Wanamaker, Bullock’s, I. Magnin, Abraham & Strauss, Liberty Homes, Burdine’s Goldsmith’s, Lazarus,
and Bon Marche.

These acquired chains often had a loyal customer group that relished the unique heritage of the
regional brand. The customers of Chicago’s Marshall Field’s department stores were particularly
incensed when they learned in 2006 that Macy’s would replace the Field’s name. Field’s had always
positioned itself as an upmarket brand that attracted middle-and-upper-income customers, a notch
above the typical Macy’s positioning. Its enormous flagship on State Street has similar historic
associations and ritual destination shopping activity as to Macy’s Hearls Square location. Macy’s may
have its Thanksgiving Parade, but Field’s had the Walnut Room, Tiffany glass ceilings, and sections of
high-end designer goods such as the 28 Shop. Field’s had also developed its local identity through its
signature Frango mints, as much as embodiment of refined Chicago as the Field’s name.

Soon after the announcement of the name change, Field’s State Street location saw dozens of
customers picketing and protesting. The anniversary of the name change is still marked by
demonstration protests from those who had been Field’s most loyal customers. Credit cards were cut
up and mailed to Macy’s office. The Macy’s outlets that had been Marshall Field’s reported slower
sales, but the company’s strategy would not retreat to the past. While it had continued some
signature itens such as Frango’s mints and Chicago-themed tourist merchandise, Macy’s would focus
in attracting a new group of customers with exclusive merchandise from Martha Stewart, Tommy
Hilfiger, and Donald Trump, as well as its Alfani and I.N.C. private label brands. Its would further its
shop-within a-shop strategy with Thomas Pink shirts, Levenger leather goods, and an FAO Schwarz
toy floor. The updated glitz would come with a wine bar added to the Walnut Room and its Christmas
tree decorated by Martha Stewart.
Discussion Questions:
1. How should Macy’s balance the strength in advertising and promotion from having a national
branded tore with the strength that comes from having a locally branded store?
2. If Macy’s continues as a national brand, other that merchandising to local tastes, what can be
done to make the store more local?

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