Macy's transformation

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Martine Reardon, CMO of Macy's
Martine Reardon, CMO of Macy's

Reardon emphasizes that Macy's approach to marketing is “integrated” and “holistic,” touching on every channel in Macy's marketing approach. This can often mean reaching customers with marketing messages on several channels simultaneously.

She points to the tendency of consumers today who may be sitting on the couch watching television, while holding a tablet or smartphone in hand. An ad on television, or before a streamed show on Hulu, may lead the consumer to do further research about a sale or product on one of her devices.

“They are leaning more toward a customer-centric view with their user data, working with dunnhumby and getting away from that one-size-fits-all approach,” says Margie Chiu, SVP at Merkle. “Everybody talks about customer-centric marketing, so it's really exciting to see that they really are taking on that approach and kind of living that.”

Local approach

More than perhaps any other retailer, this customer-centricity puts a particular emphasis on geography for Macy's, which completely revamped its merchandising and marketing approach in early 2009 to focus more on local and regional targeting — a program it dubbed My Macy's.

Dividing its more than 800 stores into 69 districts, the marketing department empowered individuals in each area to make key purchasing decisions. While national marketing decisions came from Reardon's New York team, choices were shaped by specific input from the local level.

Reardon sums up the My Macy's approach as “think nationally but act locally.” The special event team has locations throughout the country, which tailor programs to appeal to regional interests. Just as merchants and planners customize the product offerings for local stores, the marketing team will send out geo-targeted marketing messages.

“The Kentucky Derby, although it's a national Photography by Bill Bernstein event, it's really important for Kentucky and may not be so important for Miami,” Reardon says. “We try to make sure we sort some merchandise around that and then do lots of events around that as well.”

This goes for the channel mix as well. Some markets respond strongly to newspaper advertisements, others are “all about digital,” Reardon says. Macy's may shoot a campaign, but format it differently depending on what communication method makes sense for that region. Reardon says the company is investing more now in customizing events and marketing channels than they were a year ago.

“They have to deal with things at several different levels to be able to maintain national branding and marketing, and do things on the more local basis,” says Jack Plunkett, CEO of retail consultancy Plunkett Research. “Tailoring local newspaper ads or tailoring direct mail to the local region or market is something they have really taken seriously.”

Plunkett says he believes that the big challenge going forward for department stores in general will be trying to remain relevant to the consumer when they can browse and buy online. That means carrying more exclusive items, offering better expertise in the store, and building relationships with customers at the local level, Plunkett says.

“I think we'll see more of that monitoring in store, on the Internet and in every channel you can communicate with people on,” says Tom Redd, VP of strategic communications in the retail industry business unit of software company SAP. “It's taking a different approach to how the store's run. The people at the store, we need to listen to [them], because they are the ones closest to the shopper, and have more input than we have seen at any point in the past.”

Redd is on the board of the Terry Lundgren Center for Retailing at the University of Arizona. He describes visiting the Macy's store in Tucson and seeing how the company has totally redone it to cater to people coming in from Mexico to visit, shop and go home at the end of the day. He says the store offers a very different mix of merchandise and level of presentation than would be seen in another region.

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