Alvin Community College

Macy’s

(M)

Leslie Turcios

BUSI 1301

Professor Weatherford

6 May 2024
Macy’s
Macy’s Company Overview:

165 years ago, a new shop opened up in New York City. This 11-story department store

developed fast, and it is worth 3.29 billion today. Macy’s, “Americas Department Store” has

considerably gained recognition for being one of the oldest and biggest retail stores in the

country (Hotels.com).

Macy’s official name is Macy’s Incorporated (Macys Inc) and it is a single-industry

corporation. Macy’s is a retail store that offers apparel for all ages, furniture, shoes,

makeup/jewelry, home accessories, etc. (Global Data). The company headquarters is located in

New York at 151 West 34th Street. Macy’s is committed to corporate social responsibility,

which are strategies implemented to help businesses take on a more positive role in society

(Kerner). Macy’s mission is called Mission Every One (Macy’s Inc). Macy’s is on a mission “to

create a brighter future with bold representation for all” (Macy’s Inc). They will direct 5 billion

dollars towards people, products, and programs to create a better environment and future. Macy’s

states that “Mission Every One is an essential part of how we operate and make decisions as a

business. We believe that when our business enables everyone to stand in their truth and have a

seat at the table, they realize their full potential, which unlocks innovation and progress for all.”

Macy’s actively collaborates with numerous networks that “directly engage with policymakers

with international trade, human rights, and sustainability issues” (MacysInc.com). Their guiding

principles include the environment, human rights, products, and governance. CEO Tony Spring

and CFO Adrian Mitchell have a big impact on Macy’s, and they are a big part of the company’s

success.

Timeline:
 In 1858, Rowland H. Macy opened a dry goods shop in New York. It sold items such as

nuts, jams, oils, toiletries, and clothing. About 30 years later in 1887, Nathan and Isidor Straus

purchased interest in the company and by 1896 they controlled it completely (Britannia). From

here, they began to create more stores around the area and across America. In 1924, Macy’s

Herald Square location became the largest in the world and their first parade was held (Macy’s

Inc). These parades are now a tradition, as Macy’s holds the Macy’s Thanksgiving Parade every

year. These parades are a good marketing strategy for Macy’s, and it helps get them more

customers. By showing their appreciation for Thanksgiving, they are showing appreciation for

families, friends, and their customers. The parade also creates familiarity with some people.

Watching the parade every year will help people recognize Macy’s name, logo, and what kind of

store they are. The Macy’s Thanksgiving Parade is a smart way to keep the store relevant. From

here, they continued expanding until 1992, when poor business decisions and economic

recession led Macy’s to file for bankruptcy. Sales were so low during the holidays that Macy’s

was in so much debt. According to the Washington Post, Macy’s missed “a self-imposed

deadline to [pay off their debt], after banks cut off their credit” (Swisher and Fromson). Luckily

in 1994, Macy’s had the opportunity to merge with Federated Department Stores and in 2007

changed its name back to Macy’s Inc (Britannia). This led Macy’s to start growing again and

now it is one of the biggest retails stores in the country (Hotels.com). In order to protect the

environment, Macy’s launched their sustainability initiative in 2008. In 2011, they launched

Macys.com, a site where Macy’s offers international shipping to customers. With the rise of

Covid and everything moving online now, I think this helps the company tremendously. As of

the present day, Macy’s is focused on their mission to create a better future filled with

representation, kindness, confidence, and love. They will be investing in programs to assist with

implementing these qualities to society.

 Macy’s Decisions:

Macy’s has made plenty of business decisions in the past and they will continue to make

choices in the future. Businesses must make important decisions all the time. It can be stressful

and pressuring having to make the right decision daily. Macy’s has done a pretty good job so far,

considering how long they have been around and how many decisions they have had to make.

That being said, they have made their fair share of both ethical and unethical decisions. One

ethical decision they made was when Macy’s launched a Sustainable Products Sitelet. In the fall

of 2021, Macy’s launched this sustainability program, which aligns with their vision of “a

thriving planet” (Macys.Inc). With the recent rise of issues like climate change and plastic waste,

Macy’s wanted to help better society by implementing new strategies with this program. By

making this decision, Macy’s hoped to achieve a cleaner environment with less impact, less

waste, less animal cruelty, and less safety concerns. They aim to use more responsible materials

for all their products, meaning they use recycled, organic, and more sustainable growing

materials. They have listed all the materials they use on their website. Along with using better

materials, they also design their products for less waste. Macy’s tries to make their products

reusable, refillable, or re-made. They also use safer business practices for employees and the

company, such as fairtrade, B corp, and Nest. Another part of their sustainable program is the

Macy’s Jewlery and Watch Repair. Instead of throwing away old or dirty jewelry, Macy’s

provides customers with restoration services. Creating the Sustainable Products Sitelet program

was a great ethical decision because not only does it help their brand grow, but it lets customers

know that Macy’s cares about their customers. It also shows that Macy’s cares about society and

the world we live in. It is so easy for a company to tell customers that they’re focusing on being

more sustainable, but it can be more difficult to follow through with those kinds of statements.

Macy’s is showing customers that they keep their word and do what they say they will. I
appreciate that kind of attitude among companies and many others do too. While this proves that

Macy’s is capable of making good choices, sometimes things don’t always go according to plan.

While trying to be ethical, Macy’s actually did the opposite. In a 2019 press release, Macy’s laid

out a five-point plan to increase diversity within the company. Specifically, the plan was put in

place to “achieve more ethnic diversity by 2025 at senior director levels and above, with a goal

of 30%” (Marshall). As it turned out, the 30% goal had managers favoring specific races such as

Hispanic, Asian, and Black. The five-point plan also encouraged Macy’s advertising crew to

select a good amount of non-white people to be hired for commercials. Race affected hiring

decisions, which is unfair and unethical. This is a violation of civil rights laws. In 2019, the rise

of LGBT awareness and minority movements prompted Macy’s to represent more diversity.

Hence why they were aiming for more minorities in the company. They were hoping to achieve

approval from the public/customers, as well as improve their company. Having race affect hiring

decisions is completely unfair and unethical, but I understand what Macy’s was trying to do.

Instead of doing that, Macy’s should have hired people based on what they have to offer rather

than how they look. Many people in society judge companies based on the diversity they portray,

and I realize companies have to attract customers, but being unethical with hiring decisions is

going too far. This was a very poor ethical decision because the people who realize how unfair it

is may not want anything to do with Macy’s again. It could potentially lose them customers.

Marketing and Distribution Strategies:

Macy’s marketing strategies are used both online and offline. With their shopping

website, Macy’s offers catalogs, sales, coupons, bright colors and pictures to draw your attention.

In stores, Macy’s provides mannequins to display their clothes, banners hanging from the

ceilings, posters everywhere, and sales prices (Spanou). They also use TV commercials, radio,
newspapers, and social media to appeal to the public. They have 2.4 followers on Instagram,

14.65 on Facebook, and almost one million on twitter. A big social media presence is key now

that most of the world is moving online. They upload videos and photos of their merchandise,

sales, promotions, and new changes happening with the store. For example, on November 28,

2023, Macy’s posted a video on Instagram announcing their Friends & Family sale. They

promoted this sale by giving people a code for checkout in the caption of the video. The code

was “FRIEND” to get 45% off. In early November 2023, they posted about early black Friday

deals, which was a sale before the actual black Friday. Electronics were on sale specifically for

this deal. Macy’s also uses the four p’s of marketing. The four p’s stand for product, price, place,

and promotion. Macy’s has a huge variety of products, which attracts people of all backgrounds

and ages. They have clothes, shoes, furniture, food, jewelry, and more. Macy’s has a variety of

pricing. They have luxury brands, but they also have more affordable ones. They have a

discounted section of the store called Macy’s Backstage. It offers last seasons clothing and items

for a cheaper price. As for the place, Macy’s is located in many shopping centers in the United

States, and they are also online. Macy’s promotes themselves through TV, radio, social media,

billboards and more. They also send customers emails and offer the option to join the loyalty

program. Distribution strategies include investing in private brands. By doing this they increase

the control they have over production and distribution. For example, they have invested in over

25 brands including I.N.C., Sun + Stone and Alfani. In 2022, about 16% of “Macy’s sales...

originated from these private brands” (Spanou). This is why one of their new goals is to

introduce four new private brands by 2025. Macy’s marketing strategies, distribution strategies,

and plans have led them to attract many customers. I think they are doing a good job improving

the company by implementing these strategies.

Operations:
Macy’s Logistics and Operations (MLO) oversees Macy’s operations and supply chain. MLO

handles the distribution centers and “ensures efficient, timely flow of goods to stores and direct-

to-customer deliveries” (Pivotal Resources). Macy’s Logistics and Operations was created in

1994 to help with merchandise distribution, directed mainly to Northeastern United States. In

1995, MLO expanded to aid all Macy’s nationwide. In 1997, they devised strategies to focus on

operations such as “expense control, energy management, asset recovery, loss prevention,

shortage control, leased departments and maintenance functions” (Macy’s). MLO’s goal is to

decrease the cost and the processing time in merchandise distribution so that Macy’s can become

more effective. Newer technology, programs, and systems has helped Macy’s become

recognized as a “leader in improving and streamlining the distribution process through the use of

technology” (Macy’s). Macy’s daily operations include a mix of retail, corporate operations, and

website management. On a typical day, Macy’s prepares for sales by opening the store,

providing great customer service, cleaning the place, and placing new merchandise on the floor.

Meanwhile, Macy’s website team manages the website and updates prices, sales, ads, and

pictures. Macy’s customer service representatives handle customer questions and garner

feedback. In the HR department, they oversee pay, issues, and anything else. The marketing and

finance teams strategize, make business decisions and plan for the future. In the distribution

center, Macy’s employees make sure that deliveries are made on time, unload merchandise

shipments, and check inventory. To effectively run the business, Macy’s incorporates many

different people and strategies to keep their company successful.

Effects of recent recession:

Due to the recent recession, Macy’s has not been doing well as it once was. In 2015, they

had great sales and customer interaction. In the present, many factors like inflation, COVID, and
recession have slowly decreased Macy’s success. For example, Macy’s announced that its

fourth-quarter sales slipped by 1.7%. Their same store sales decreased by 6% in the fourth

quarter, and they have lost about 71 million dollars (Picchi). Due to this, Macy’s plans to close

about 150 stores in the next three years. Along with that, Macy’s announced that they are laying

off “3.5% of its total workforce, or roughly 2,350 employees” (Picchi). Even though they are

planning to close many locations and cut down on their employees, Macy’s is working to

increase sales by opening smaller luxury stores. These smaller stores are designed to be more

comfortable, easy, and convenient for customers. By investing in smaller stores, Macy’s is

hoping to connect more with customers. This is a new strategy, as Macy's is usually known as a

big mall store. Even so, Macy’s is confident that with these new ideas they will see more growth

in 2025. Since their peak in 2015, Macy’s stock has gone down 75% and customer interaction

has become weaker, which the recession has not helped (Conley). Nevertheless, Macy’s is

brainstorming and strategizing in order to become as successful as they were in 2015.

Financial statements:
 Competition:

Macy’s has had its fair share of ups and downs. They started out very successful, then

almost went bankrupt, then back to being successful again. I would say they are and have been

very successful overall. Most businesses go through periods of hardships and growth, so what

Macy’s has been through is relatively normal. Other companies aren’t so lucky, and they go

through more issues than usual. For example, take Kohl’s. Kohl’s is a department store that sells

merchandise such as clothing, shoes, jewelry, furniture, home decor, and appliances. The items

Kohl’s sells are very similar to the merchandise Macy’s sells. These department stores like

Kohl’s are competition for Macy’s. Kohl’s net income for 53 weeks ending February 3, 2023

was $353 million. In 2023, Macy’s net income was $1,177 million. Macy’s is doing better than

Kohl’s, and it is easy to see why. The customer service at Macy’s is better, the lighting, the

environment, and the discount section are all better quality. Their products are better quality too,

as they sell high-end brands. “Kohl’s has lost around 17% of its market share since 2011,

primarily to off-price retailers such as TJMaxx, as well as Amazon, according to UBS”

(Meyersohn). Even before COVID, Kohl’s was already going downhill. Kohl’s sales are slowly

dropping, and they are resorting to partnerships with other companies to help their own. They

have partnerships with Amazon and Sephora to help increase the amount of people in the store.

Even with that, there has not been significant improvement. Kohl’s needs to better themselves
without using other companies to promote their own.

Conclusion:

Macy’s has not always been successful, and it has not always been the company it is

today. But it has come a long way from the small dry goods shop it once was. In 1858, Rowland

Hussey Macy had no way of knowing that his small shop would one day be one of “America’s

oldest and biggest retail stores” (Hotels.com). Macy’s has had an impact on society with their

Thanksgiving parade, activism, representation, and sustainability efforts. Macy’s is committed to

corporate social responsibility, which are strategies implemented to help businesses take on a

more positive role in society (Kerner). They aim to service customers as best they can, and they

are always expanding their strategies and operations to satisfy customers. Even though they can

make bad decisions from time to time, most of their decisions result in happy customers. From

their sustainability efforts, they have helped the environment and from their representation

efforts, they have helped many different communities. They are constantly finding new ways to
change and grow for the better. When an obstacle comes their way (like the recession), Macy’s

finds ways to get through the hard times. Macy’s is not just a department store, but it’s a place of

acceptance, growth, and quality.

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