September 6, 2007
Name Change Not Macy’s Problem
According to a report by the Pioneer Press, Frank Guzzetta, chief executive officer of Macy’s North, is willing to admit the national chain has had rough going, especially when it comes to the former May Department Stores’ locations. What he will not agree with, however, is that the problems relate to the company changing the names above the door on those locations.
“We didn’t focus on developing new customers and explaining what Macy’s was all about,” he told an audience at the Carlson School of Management on Tuesday. “It was not the name.”
Mr. Guzzetta points to Marshall Field’s to make his point. While consumers, particularly in Chicago, have reacted negatively to the Macy’s banner, the former Field’s chain was struggling well before it was acquired in the deal with May.
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| "Field’s Fan" distributing leaflets outside Macy’s State Street, Chicago. Photo: RetailWire |
While there is no guarantee that Chicago consumers (or others in other cities) will ever come around, Macy’s believes it is making changes that will help it connect with consumers in markets across the country. Even now, stores in markets including Chicago are beginning to improve, he said.
Macy’s has also had problems in Minneapolis where stores have gone through several name changes. According to Mr. Guzzetta, Macy’s in downtown Minneapolis and at the Mall of America are doing well.
The national department store chain has turned to star power and familiar private labels to help it regain lost ground.
The company recently announced a new ad campaign that features celebrities with lines sold in Macy’s. The highest profile celeb, from a group that includes Donald Trump, Jessica Simpson, Diddy, and Usher, is Martha Stewart.
Ms. Stewart’s line, The Martha Stewart Collection, has 2,000 products including home goods, textiles, cookware and holiday decorating items. Eventually, it has been reported, the line will be broadened to home furnishings, bridal registry items and cookbooks.
Count Donald Trump among those who believe that Macy’s chief Terry Lundgren has a winning strategy. He told The Enquirer, “I believe (Mr. Lundgren) is absolutely on the right track. He’s a winner, and he’s always been a winner. This ad campaign will be very successful.”?
Discussion Questions: Has too much been made of the Macy’s name change when it comes to explaining some of the difficulties the chain has encountered? Will the company’s focus on “star power” help it to begin to attract shoppers who have refused to this point to shop in its stores?
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The format has been obsolete for years and dying, no matter what the name. The ‘moderate’ department store’s market share is 1/4 today of what it was in 1980…gone to the “better” department stores and to the discount stores. The category needs total reinvention or it faces extinction…the name on the door is a non factor.
The name change across-the-board and without regard to local preferences was myopic. Mr. Guzetta’s own words sound almost arrogant–they indicate a desire to bring in new customers, but ignore the old ones. Sure, Field’s was struggling before the acquisition, but one of the things it DID have going for it was the name. It hearkened back to grander times for the chain and the department store format, for that matter.
A better move would have been to retain the name in markets where loyalty was strong and replace it in the others, where it didn’t matter. In all markets, however, both old and new customers would certainly be looking for in-store improvements. So that mis-step is accurately discussed above and by Mr. Guzetta.
If Macy’s had spent a little moolah on market research, they could have saved it on store signage and everything else that goes along with a name change. Plus they would have attracted old customers curious about the new merchandise, rather than repel them outright.
I’m not too sure that Macy’s understands completely that it was more than just a name change in certain markets. For example, in St. Louis, Famous-Barr was an institution. “Famous” was a locally managed retail branch of St. Louis based May Co., that employed lots of people, was as synonymous with St. Louis as Budweiser, the Arch, and the Cardinals. It was more than just a new sign on the building in that market, for sure.
With over 800 stores in differing economic markets throughout the country, it is inevitable that there will be varying impressions and opinions of Macy’s. But “name change” or not, for many of us in the Midwest the converted Macy’s stores are now physically, viscerally and emotionally a wholly different and unacceptable shopping experience from the stores they replaced. Those who solely focus on the “name change” may miss the point that the merchandise at Macy’s is different and perceived to be of generally lower quality and class, the assortments are narrower, top designers have fled, entire specialty departments have been closed, and the overall upkeep of the stores seems inferior. Additionally, many long time knowledgeable employees who were raised on providing impeccable service and had a loyal customer following have left in frustration–replaced by “cashiers.” We in the greater Chicago/Milwaukee/Minneapolis/Detroit metro areas are blessed with many, many retail choices. During the past year former Marshall Field’s customers have not quit buying, but we have found other stores and boutiques to meet our needs and preferences. It is highly unlikely (OK, laughable) that Donald Trump and Jessica Simpson products will lure us back to Macy’s.
One of the many bad things about divorce is the loss of part of your life. It is hard to sit down with the kids and the new spouse and reminisce about that great vacation or adventure you all took with the ex. So over time, those memories disappear from our minds and history.
Taking the El down to the State Street Field’s to do Christmas shopping with grandma, watching the delivery truck bring home mom’s latest hat or shoe purchase, taking my own kids to see Santa; to quote Roy Batty from the movie The Blade Runner “All those…moments will be lost in time, like tears…in rain.”
Federated can advertise all they want, using a bunch of egomaniacs with poor taste but they won’t draw me into their stores until they come up with a compelling reason to shop. I used to shop Field’s because of the memories of my youth. I still find myself referring to the new dame as MF then then I remember and say mf. I do not believe that Federated understood or correctly measured the emotional heritage that the Marshall Field’s brand had achieved and while the the merchandising and operations might have needed tweaking; that could have been more profitably achieved through an encounter weekend rather than a divorce.
“Famous” was a locally managed retail branch of St. Louis based May Co., that employed lots of people, was as synonymous with St. Louis as Budweiser, the Arch, and the Cardinals.
Interesting analogy. in a town where the Football St. Louis Cardinals are now in Arizona, and the Los Angeles Rams are now the St. Louis Rams. Name changes are a part of doing business. They come whether the people of a local area are prepared for them or not.
Is the Macy’s name change as big a factor in the success or lack of success in certain markets? Perhaps short term in markets like St. Louis and Chicago where people had become so comfortable with a hometown name that was now missing. However, like all things new, a certain intrigue comes with the new kid on the block, and the same consumer who misses the store that has withstood the test of time will come to check out Macy’s if simply to satisfy a curiosity. What Macy’s, or any other business for that matter, must do from that point, is to establish a stronghold in the markets where things were weakening, and re-establish relationships with customers who were loyal to old friends.
The fact of the matter is that names matter. Companies spend millions of dollars a year to build great brands that resonate with their consumers. The “May nameplates” were unique to each of the regions they served. There was Filene’s in Boston, Marshall Field’s in Chicago, and Foley’s in Houston. Each had traditions and product mixes that matched the region they did business in. Customers liked their regional department stores–they didn’t ask for a “national brand.” In fact they already had national players like Sears, JCPenney, and Target/Wal-Mart…why would they need Macy’s?
This didn’t have to happen.
Macy’s could have quickly reaped most of the economies of scale even as they slowly morphed from well-known (even if not well-shopped) local brand to a single nationwide brand.
I couldn’t agree more with the arrogance of the Macy’s executive’s comments in which he essentially says “If you think things are bad now you should’ve seen them before!”
Can’t wait to see the ‘case study’ that some university will write on this.
This is like one of those riddles: what sailed a mile high in Denver, sank in Saint Louis, crashed in Chicago…?
At the risk of oversimplifying, what this is really about is Macy’s (questionable at best) “conversion” of Marshall Field’s, where what was a mid/high-end store is now something else: in short, the change has been both in appearance AND substance; (in markets like St. Louis, Philly, Boston, et. al., where a long established name and a downtown flagship still existed with May’s uninspiring assortment inside, the change is largely symbolic; in markets like Denver, Dallas and Hartford, which long ago succumbed to nameplate-of-the-monthism, the change is probably greeted with a yawn.)
But what to do about this (discontent) is unclear…and every week that goes by from that fateful September day, the options shrink.
The problem with all conventional department stores is that they haven’t changed with the consumer. Macy’s, Dayton’s, May, Sears, JCPenney, Donaldsons: they all had their start as regional department stores, and extension of the old general store if you will. Everybody shopped there, and they purchased all of their household needs there. There was nothing even close to specialty stores during their inception.
Over the years they have lost touch with their consumer base (some more than others) by becoming too upscale, too inflexible, or in some cases just poorly run. Department stores are still very relevant today, but they are taking a new form. Wal-mart and Target are the two largest department stores, trying to fill most of your household needs. Home Depot, Lowe’s, and Menards are the new Sears of the world. The only thing they don’t sell is clothing. The old department stores just became huge specialty retailers that tried to specialize in too much. Their product lifecycle is far in decline and needs a major overhaul to correct this trend.
I agree that it is not just about the name change. Department stores were struggling long before that and the name change just made it worse. When you have a negative trend going and add another strong negative to it, what else could you expect to happen? As has been said, their comp sales will start looking better as soon as they are working against the new low numbers but that will only make the poor performance numbers more palatable. Many former Marshall Field’s customers have found new retailers to reward with their purchases and only time will help ease the dislike over the change. A strong advertising campaign will surely help draw people to their stores but the brands and merchandising will have to be right to get repeats. One has to wonder if the savings of eliminating the Marshall Field’s name and brands was a good trade for the reduced sales levels.
While I think Federated Department Stores made a mistake integrating Marshall Field’s into Macy’s, the other May Company stores were dull with uninspired merchandise.
Many Marshall Field’s customer have good reason to be disappointed with the change, the customers of the other stores have lost nothing but the name on the door. Strawbridge’s and Filene’s were nothing of their former selves. After being taken over by the May Company, Strawbridge’s became just a shell of itself.
I shopped at Marshall Field’s for many years not because it had the broadest selection, or the lowest prices or cutting edge fashion, but because it was QUALITY. From the professionalism of the sales staff, to the care taken with the in-store displays, to the understated green shopping bags…it was an experience. Macy’s is just 800 boring cookie-cutter stores, and that’s all they ever will be, although Macy’s executives have their heads in the sand thinking otherwise. I have not spent a dime in Macy’s since last September as a protest to the name and format changes, and never will till they bring the name and the experience back.
Macy’s top management is in denial. Of course, the name matters. They were warned over and over again that it matters. They took the May Co.’s one solid asset–the enormous good will that came with the name “Marshall Field’s”–and they [threw] it away. I look forward to reading about this debacle in future business school textbooks–next to the chapter on “New Coke.”
The conversion of the Field’s nameplate was a huge mistake. Macy’s would have been better served to do the same with Field’s as they did with Bloomingdale’s. They could have converted many of the stores other than State Street to Macy’s without causing such hard feelings–Macy’s Water Tower and Field’s on State. Some of the best business plans come from failure.
It’s not the name, it’s the format.
Even though Kohl’s and to a certain degree Penney’s have been able to tweak and extend the dated Department Store value proposition for the last few years, the idea of gathering several brands of mostly apparel and accessories (other than your own) under one roof has gone by the proverbial consumer wayside. Huge, multi-level boxes with perceived luxury sentiment and impossibly cluttered isles is no longer a viable consumer notion. We just don’t shop like that (or for that) anymore.
The Macy’s “strategy” of consolidation (and massive reduction, by the way) under one name is the last gasp from a dinosaur idea birthed over 100 years ago and finally running out of gas.
Best idea I’ve seen so far has been to turn some of the real estate left over from closed department stores into lifestyle centers (Polaris Parkway, Columbus Ohio) with restaurants, grocery markets and other interesting propositions.
Let’s see more of that, regardless of name.
On 9/9/2006, Marshall Field’s was renamed Macy’s. Ever since, sales trends have been weak. As time goes on, the comparative sales trends will generally gain, because of the weak year-ago comparisons. The exceptions: periods where heavy promotions were used to introduce the new Macy’s identity. Those comp comparisons will be weak. As time goes on, the stores’ assortments and promotions will be adjusted appropriately, since Macy’s certainly has the systems, management focus, and resources to make the rollout successful, even if it takes another year or two.
In my neck of the woods (Denver), the switch has been nothing but a vast improvement. The May stores were aging, dark, dingy, and over-stuffed with junk to the point where you could hardly navigate the aisles.
When the change-over to Macy’s happened, suddenly the stores were bright, clean, well-stocked but not over-stocked. No protests happened around here!
However, I agree that Macy’s suffers from more than just a name change, and that the company has not done a good job of telling the market what it’s all about. And that is increasingly important in a time when Macy’s competition isn’t Dillard’s or whoever’s left in “mid-market department store” land, but split between cheap-chic Target and high-end Nordstrom.
Macy’s made a point last year of not reporting comp sales in the former May stores, but all the evidence suggests that the numbers were poor. So it’s disingenuous to suggest that things are improving since the comps will soon be reported against terrible numbers from a year ago. It’s likely that the sales results in the former May stores are not meeting Macy’s internal targets.
The crux of today’s question is whether the name change is the culprit. I believe that in markets like Minneapolis, where the “legacy” name was changed from Dayton’s to Marshall Field’s several years ago, the damage was already done. However, in key markets like Chicago and St. Louis (home towns of Field’s and Famous-Barr), customers have confronted the loss of their “hometown” nameplate for the first time. So Mr. Guzzetta’s point (it’s not about the name change) is valid to a point.
The bigger issues confronting Macy’s in its turnaround effort: Does the sharp swing away from May’s promotional stance now look like a big mistake, as JCPenney fills this void among mall-based anchors? Do the Macy’s stores look cluttered and disorganized? (Yes, according to this shopper of former Field’s locations.) Is the merchandise content–especially the endless, homogenized private brand product–less than compelling? I’m not sure a celebrity-based TV campaign is the cure-all when there are so many other fundamental issues that need fixing.
In some markets, Denver for example, the change from Foley’s to Macy’s was an upgrade; in others, Chicago being the most obvious, Macy’s was a downgrade (from Marshall Field’s).
Macy’s has an identity problem, that much is true. The problem, however, lies not in the Macy’s name but the disconnect between what customers expect of Macy’s and what Macy’s actually delivers. This dysfunction is embedded in Macy’s hierarchy: one of Macy’s brand values is promoting “affordable luxury”…if pressed for a definition of “affordable luxury,” I don’t believe Terry Lundgren himself could provide a decent example. Macy’s needs to come to grips with the fact it’s nothing more than a mid-tier retailer competing with the likes of JCPenney, Kohl’s, Dillards, Bon-Ton, and a handful of other regional department stores. These stores, like their target market, are being squeezed out of existence from discounters (Target, Wal-Mart) and luxury department stores (Saks, Nordstrom) who do a much better job competing on products, pricing, and promotion….
The May Company locations and former Marshall Field’s stores need to be discussed as two different issues. As one living in a former Hecht’s market, the change to Macy’s has been a blessing for our community in every way. As a member of a family with generations of tradition at Marshall Field & Company, I will never get over the eradication of that fine brand. Macy’s big mistake was not keeping the iconic State Street store in some form as “Marshall Field’s Center” and hanging onto the green bags, awnings, etc. It was a true destination but after chatting with a doorman at a major Loop hotel earlier this week, I can confirm that that era has ended.
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The format has been obsolete for years and dying, no matter what the name. The ‘moderate’ department store’s market share is 1/4 today of what it was in 1980…gone to the “better” department stores and to the discount stores. The category needs total reinvention or it faces extinction…the name on the door is a non factor.
The name change across-the-board and without regard to local preferences was myopic. Mr. Guzetta’s own words sound almost arrogant–they indicate a desire to bring in new customers, but ignore the old ones. Sure, Field’s was struggling before the acquisition, but one of the things it DID have going for it was the name. It hearkened back to grander times for the chain and the department store format, for that matter.
A better move would have been to retain the name in markets where loyalty was strong and replace it in the others, where it didn’t matter. In all markets, however, both old and new customers would certainly be looking for in-store improvements. So that mis-step is accurately discussed above and by Mr. Guzetta.
If Macy’s had spent a little moolah on market research, they could have saved it on store signage and everything else that goes along with a name change. Plus they would have attracted old customers curious about the new merchandise, rather than repel them outright.
I’m not too sure that Macy’s understands completely that it was more than just a name change in certain markets. For example, in St. Louis, Famous-Barr was an institution. “Famous” was a locally managed retail branch of St. Louis based May Co., that employed lots of people, was as synonymous with St. Louis as Budweiser, the Arch, and the Cardinals. It was more than just a new sign on the building in that market, for sure.
With over 800 stores in differing economic markets throughout the country, it is inevitable that there will be varying impressions and opinions of Macy’s. But “name change” or not, for many of us in the Midwest the converted Macy’s stores are now physically, viscerally and emotionally a wholly different and unacceptable shopping experience from the stores they replaced. Those who solely focus on the “name change” may miss the point that the merchandise at Macy’s is different and perceived to be of generally lower quality and class, the assortments are narrower, top designers have fled, entire specialty departments have been closed, and the overall upkeep of the stores seems inferior. Additionally, many long time knowledgeable employees who were raised on providing impeccable service and had a loyal customer following have left in frustration–replaced by “cashiers.” We in the greater Chicago/Milwaukee/Minneapolis/Detroit metro areas are blessed with many, many retail choices. During the past year former Marshall Field’s customers have not quit buying, but we have found other stores and boutiques to meet our needs and preferences. It is highly unlikely (OK, laughable) that Donald Trump and Jessica Simpson products will lure us back to Macy’s.
One of the many bad things about divorce is the loss of part of your life. It is hard to sit down with the kids and the new spouse and reminisce about that great vacation or adventure you all took with the ex. So over time, those memories disappear from our minds and history.
Taking the El down to the State Street Field’s to do Christmas shopping with grandma, watching the delivery truck bring home mom’s latest hat or shoe purchase, taking my own kids to see Santa; to quote Roy Batty from the movie The Blade Runner “All those…moments will be lost in time, like tears…in rain.”
Federated can advertise all they want, using a bunch of egomaniacs with poor taste but they won’t draw me into their stores until they come up with a compelling reason to shop. I used to shop Field’s because of the memories of my youth. I still find myself referring to the new dame as MF then then I remember and say mf. I do not believe that Federated understood or correctly measured the emotional heritage that the Marshall Field’s brand had achieved and while the the merchandising and operations might have needed tweaking; that could have been more profitably achieved through an encounter weekend rather than a divorce.
“Famous” was a locally managed retail branch of St. Louis based May Co., that employed lots of people, was as synonymous with St. Louis as Budweiser, the Arch, and the Cardinals.
Interesting analogy. in a town where the Football St. Louis Cardinals are now in Arizona, and the Los Angeles Rams are now the St. Louis Rams. Name changes are a part of doing business. They come whether the people of a local area are prepared for them or not.
Is the Macy’s name change as big a factor in the success or lack of success in certain markets? Perhaps short term in markets like St. Louis and Chicago where people had become so comfortable with a hometown name that was now missing. However, like all things new, a certain intrigue comes with the new kid on the block, and the same consumer who misses the store that has withstood the test of time will come to check out Macy’s if simply to satisfy a curiosity. What Macy’s, or any other business for that matter, must do from that point, is to establish a stronghold in the markets where things were weakening, and re-establish relationships with customers who were loyal to old friends.
The fact of the matter is that names matter. Companies spend millions of dollars a year to build great brands that resonate with their consumers. The “May nameplates” were unique to each of the regions they served. There was Filene’s in Boston, Marshall Field’s in Chicago, and Foley’s in Houston. Each had traditions and product mixes that matched the region they did business in. Customers liked their regional department stores–they didn’t ask for a “national brand.” In fact they already had national players like Sears, JCPenney, and Target/Wal-Mart…why would they need Macy’s?
This didn’t have to happen.
Macy’s could have quickly reaped most of the economies of scale even as they slowly morphed from well-known (even if not well-shopped) local brand to a single nationwide brand.
I couldn’t agree more with the arrogance of the Macy’s executive’s comments in which he essentially says “If you think things are bad now you should’ve seen them before!”
Can’t wait to see the ‘case study’ that some university will write on this.
This is like one of those riddles: what sailed a mile high in Denver, sank in Saint Louis, crashed in Chicago…?
At the risk of oversimplifying, what this is really about is Macy’s (questionable at best) “conversion” of Marshall Field’s, where what was a mid/high-end store is now something else: in short, the change has been both in appearance AND substance; (in markets like St. Louis, Philly, Boston, et. al., where a long established name and a downtown flagship still existed with May’s uninspiring assortment inside, the change is largely symbolic; in markets like Denver, Dallas and Hartford, which long ago succumbed to nameplate-of-the-monthism, the change is probably greeted with a yawn.)
But what to do about this (discontent) is unclear…and every week that goes by from that fateful September day, the options shrink.
The problem with all conventional department stores is that they haven’t changed with the consumer. Macy’s, Dayton’s, May, Sears, JCPenney, Donaldsons: they all had their start as regional department stores, and extension of the old general store if you will. Everybody shopped there, and they purchased all of their household needs there. There was nothing even close to specialty stores during their inception.
Over the years they have lost touch with their consumer base (some more than others) by becoming too upscale, too inflexible, or in some cases just poorly run. Department stores are still very relevant today, but they are taking a new form. Wal-mart and Target are the two largest department stores, trying to fill most of your household needs. Home Depot, Lowe’s, and Menards are the new Sears of the world. The only thing they don’t sell is clothing. The old department stores just became huge specialty retailers that tried to specialize in too much. Their product lifecycle is far in decline and needs a major overhaul to correct this trend.
I agree that it is not just about the name change. Department stores were struggling long before that and the name change just made it worse. When you have a negative trend going and add another strong negative to it, what else could you expect to happen? As has been said, their comp sales will start looking better as soon as they are working against the new low numbers but that will only make the poor performance numbers more palatable. Many former Marshall Field’s customers have found new retailers to reward with their purchases and only time will help ease the dislike over the change. A strong advertising campaign will surely help draw people to their stores but the brands and merchandising will have to be right to get repeats. One has to wonder if the savings of eliminating the Marshall Field’s name and brands was a good trade for the reduced sales levels.
While I think Federated Department Stores made a mistake integrating Marshall Field’s into Macy’s, the other May Company stores were dull with uninspired merchandise.
Many Marshall Field’s customer have good reason to be disappointed with the change, the customers of the other stores have lost nothing but the name on the door. Strawbridge’s and Filene’s were nothing of their former selves. After being taken over by the May Company, Strawbridge’s became just a shell of itself.
I shopped at Marshall Field’s for many years not because it had the broadest selection, or the lowest prices or cutting edge fashion, but because it was QUALITY. From the professionalism of the sales staff, to the care taken with the in-store displays, to the understated green shopping bags…it was an experience. Macy’s is just 800 boring cookie-cutter stores, and that’s all they ever will be, although Macy’s executives have their heads in the sand thinking otherwise. I have not spent a dime in Macy’s since last September as a protest to the name and format changes, and never will till they bring the name and the experience back.
Macy’s top management is in denial. Of course, the name matters. They were warned over and over again that it matters. They took the May Co.’s one solid asset–the enormous good will that came with the name “Marshall Field’s”–and they [threw] it away. I look forward to reading about this debacle in future business school textbooks–next to the chapter on “New Coke.”
The conversion of the Field’s nameplate was a huge mistake. Macy’s would have been better served to do the same with Field’s as they did with Bloomingdale’s. They could have converted many of the stores other than State Street to Macy’s without causing such hard feelings–Macy’s Water Tower and Field’s on State. Some of the best business plans come from failure.
It’s not the name, it’s the format.
Even though Kohl’s and to a certain degree Penney’s have been able to tweak and extend the dated Department Store value proposition for the last few years, the idea of gathering several brands of mostly apparel and accessories (other than your own) under one roof has gone by the proverbial consumer wayside. Huge, multi-level boxes with perceived luxury sentiment and impossibly cluttered isles is no longer a viable consumer notion. We just don’t shop like that (or for that) anymore.
The Macy’s “strategy” of consolidation (and massive reduction, by the way) under one name is the last gasp from a dinosaur idea birthed over 100 years ago and finally running out of gas.
Best idea I’ve seen so far has been to turn some of the real estate left over from closed department stores into lifestyle centers (Polaris Parkway, Columbus Ohio) with restaurants, grocery markets and other interesting propositions.
Let’s see more of that, regardless of name.
On 9/9/2006, Marshall Field’s was renamed Macy’s. Ever since, sales trends have been weak. As time goes on, the comparative sales trends will generally gain, because of the weak year-ago comparisons. The exceptions: periods where heavy promotions were used to introduce the new Macy’s identity. Those comp comparisons will be weak. As time goes on, the stores’ assortments and promotions will be adjusted appropriately, since Macy’s certainly has the systems, management focus, and resources to make the rollout successful, even if it takes another year or two.
In my neck of the woods (Denver), the switch has been nothing but a vast improvement. The May stores were aging, dark, dingy, and over-stuffed with junk to the point where you could hardly navigate the aisles.
When the change-over to Macy’s happened, suddenly the stores were bright, clean, well-stocked but not over-stocked. No protests happened around here!
However, I agree that Macy’s suffers from more than just a name change, and that the company has not done a good job of telling the market what it’s all about. And that is increasingly important in a time when Macy’s competition isn’t Dillard’s or whoever’s left in “mid-market department store” land, but split between cheap-chic Target and high-end Nordstrom.
Macy’s made a point last year of not reporting comp sales in the former May stores, but all the evidence suggests that the numbers were poor. So it’s disingenuous to suggest that things are improving since the comps will soon be reported against terrible numbers from a year ago. It’s likely that the sales results in the former May stores are not meeting Macy’s internal targets.
The crux of today’s question is whether the name change is the culprit. I believe that in markets like Minneapolis, where the “legacy” name was changed from Dayton’s to Marshall Field’s several years ago, the damage was already done. However, in key markets like Chicago and St. Louis (home towns of Field’s and Famous-Barr), customers have confronted the loss of their “hometown” nameplate for the first time. So Mr. Guzzetta’s point (it’s not about the name change) is valid to a point.
The bigger issues confronting Macy’s in its turnaround effort: Does the sharp swing away from May’s promotional stance now look like a big mistake, as JCPenney fills this void among mall-based anchors? Do the Macy’s stores look cluttered and disorganized? (Yes, according to this shopper of former Field’s locations.) Is the merchandise content–especially the endless, homogenized private brand product–less than compelling? I’m not sure a celebrity-based TV campaign is the cure-all when there are so many other fundamental issues that need fixing.
In some markets, Denver for example, the change from Foley’s to Macy’s was an upgrade; in others, Chicago being the most obvious, Macy’s was a downgrade (from Marshall Field’s).
Macy’s has an identity problem, that much is true. The problem, however, lies not in the Macy’s name but the disconnect between what customers expect of Macy’s and what Macy’s actually delivers. This dysfunction is embedded in Macy’s hierarchy: one of Macy’s brand values is promoting “affordable luxury”…if pressed for a definition of “affordable luxury,” I don’t believe Terry Lundgren himself could provide a decent example. Macy’s needs to come to grips with the fact it’s nothing more than a mid-tier retailer competing with the likes of JCPenney, Kohl’s, Dillards, Bon-Ton, and a handful of other regional department stores. These stores, like their target market, are being squeezed out of existence from discounters (Target, Wal-Mart) and luxury department stores (Saks, Nordstrom) who do a much better job competing on products, pricing, and promotion….
The May Company locations and former Marshall Field’s stores need to be discussed as two different issues. As one living in a former Hecht’s market, the change to Macy’s has been a blessing for our community in every way. As a member of a family with generations of tradition at Marshall Field & Company, I will never get over the eradication of that fine brand. Macy’s big mistake was not keeping the iconic State Street store in some form as “Marshall Field’s Center” and hanging onto the green bags, awnings, etc. It was a true destination but after chatting with a doorman at a major Loop hotel earlier this week, I can confirm that that era has ended.