Macy's transformation

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

“I was just on Macys.com and they asked for my birth date, so I'm probably going to get a birthday offer. They mapped my store location. They've got click behavior because I just clicked on a coupon that I can use for President's Day,” says Arthur Sweetser, CMO at marketing agency 89 Degrees. “All of that is feeding into far more behavior-based customization than just ‘Let's take the circular we published and send it to 10 million households.”

Keeping the past alive

As Macy's moves aggressively to incorporate new technology into its stores and marketing, it has also gone to great lengths to preserve and even resurrect elements of the brand's history and legacy.

For the Herald Square store renovation, this has meant protecting the wooden escalators that have been serving customers since the store opened in 1902. The windows along Broadway, 34th Street and Seventh Avenue that have been covered for decades will be opened, while awnings and canopies reminiscent of the original building will be reinstated.

“With the awnings out there, and to blend that together with the technologies of today, you're creating a shopping environment for a broader range of people,” Redd says. “You have the Gen Y group that can shop there, and you've got another group that you can slowly push forward.”

Redd says he sees this as indicative of a broader strategy to showcase the nostalgic assets of the brand, particularly with the older generations, while moving them into the use of mobile, video and other new technologies. He describes this as an approach that other retailers are likely to imitate, even those that may not have a 110-year-old store with which to do it.

More broadly, this is the strategy that can be seen at play in the company's prominent “Believe” holiday campaign. Since 2008, when Macy's pledged to donate a dollar to the Make-A-Wish Foundation for every letter to Santa Claus that it received (eventually raising $1 million in its first year), the retailer has reprised this campaign, inspired by the legendary “Yes Virginia, there is a Santa Claus” editorial that ran in The New York Sun in 1897.

Even for a campaign that emphasizes the brand's nostalgic connection to Christmas, the movie Miracle on 34th Street, and its long-running Thanksgiving Day Parade, each year the company's holiday marketing has charted new territory. In 2009, Reardon and her team built on the original idea with an animated special on CBS and sent Macy's Santa Claus to events across the country as part of a national “Santa Tour.”

In 2011, it made mobile a more central part of the campaign with the Believe-o-Magic app, and also allowed customers to upload their photos with the “Yes, Virginia” characters to the company's Facebook page.

This strategy of taking a campaign or brand message that works and building on it, or getting more targeted in applying it, epitomizes what Capeci calls Macy's “smart experimentation,” qualifying the experimental spirit many attribute to the brand.

The campaign has proven to be enduringly potent, with the company reporting that same-store sales increased 4.8% in November and 6.2% in December. It was also strong on the cause marketing side, raising $1.7 million for the Make-A-Wish Foundation.

My Macy's follows a similar trajectory, building on what has always been an effective marketing and customer service strategy, while enhancing it with all the technical tools at the company's disposal. While much about retail is changing, Macy's prides itself on continuing to also do what's worked for more than a century and a half.

“The ultimate delivery is what it was like in early retailing, where you walk in and they know your name, your favorite shirt,” Sweetser says. “That's the ultimate, and that's great if you can use digital technology to deliver that.”

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