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 JohnProfitability Macy’s Industry Median Market Median

Gross Profit Margin

40.51% 36.02% 28.77%

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 Invested Capital

2.5% 6.1% 4.4%

Data from Hoovers

Macy’s at PG Plaza Location

Tactical Problems

• Insufficient inventory in Women‘s Clothing– lost sales– disappointed customersNOTE: 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, NJhttp://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 LocationMerchandise AssortmentStore Layout and Design

Customer ServicesPricing

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!!