Victoria&Soojin Park

Macy’s is formerly known as Federated Department Stores, Inc., is a national clothing retailer. It sells men's, women's and children's clothes and accessories. The company is divided into mid-tier Macy's and Bloomingdale's, an upper-tier store that sells more exclusive items. The company posted a net loss of over $4 million in fiscal 2009[1], a symptom of a challenging retail industry caused by the 2007 Credit Crunch as well as the Subprime lending crisis.

—Jewelry category is separated into three large sections, jewelry such as fashion jewelry, watches, and gemstone and these are again break down into smaller categories.

—JEWELRY

— Customers' Top Rated

— Bracelets

— Earrings

— Necklaces & Pendants

— Rings

— Fashion Jewelry

— Men's Jewelry

Jewelry Boxes & Ring Holders

—WATCHES

— Women's Watches

— Men's Watches

— Watch Brand

— Watch Set

— GEMSTONES

— Diamond

— Cubic Zirconia

— Emerald

— Pearl

— Ruby

— Sapphire

— Semi-Precious Gemstones

— Turquoise

—A|X Armani Exchange

—Adidas

—Anne Klein

—Armani Exchange

—Baby-G

—Bali

—Baume & Mercier

—Betsey Johnson

—Brio

—Bulova

—Burberry

—Calvin Klein

—Caravelle

—Charter Club

Citizen

Climax Package

CRISLU

D&G

Diesel

DKNY

Dolce & Gabbana

Ed Hardy

Eliot Danori

Emporio Armani

ESQ by Movado

Etienne Aigner

Fair Winds Trading

Fossil

G-Shock

Givenchy

Gucci

GUESS?

Hamilton

Hugo Boss

Jessica Simpson

Judith Jack

Kenneth Cole

Kenneth Jay Lane

L'una

Lacoste

Lauren by Ralph Lauren

Lenox

Liz Claiborne

Lois Hill

Longines

Lucky Brand Jeans

Macy's

Marc by Marc Jacobs

Marc Ecko

Marquis by Waterford

Michael Kors

Monet

Moschino

Movado

Nautica

Pulsar

Swiss Army

TechnoMarine

Rachel Rachel Roy

Rado

Raymond Weil

Reed & Barton

Rwanda

Seiko

Skagen

Tissot

Tommy Bahama

Tommy Hilfiger

Urban Decay

Wittnauer

ECONOMIES OF SCALE- By converting many regional chains into the singular Macy’s brand, Federated is expecting to realize greater economies of scale. Redundancies will be eliminated and everyday business functions can be streamlined.

PURCHASING POWER- One of Macy’s newfound strengths will be its size. In terms of purchasing power, Macy’s may rival Walmat in its ability to use sheer volume to secure the best prices. Additionally, Macy’s will have greater leverage in making sure that it secures the hottest merchandise.

MARKETING EFFICIENCIES- Macy’s, as a single entity, will allow Federated to better focus on its core assets and implement marketing efficiencies through national marketing campaigns. As opposed to splitting resources for regional campaigns, Macy’s will be able to buy more national advertising.

MIX NEW WITH OLD CHANNELS- To compete with pure play internet retailers, Macy’s is in the stronger position of being able to leverage the storefront and the internet. Nationwide storefronts allow Macy’s to cross promote the internet with its physical presence. Customers can research online at Macys.com and then come into a store and buy. Customers can also buy items at Macys.com with the security of knowing a return can be handled at the local store. This unique position allows Macy’s a competitive advantage over internet only retailers.

LOSS OF REGIONAL’S BRAND VALUE. Customers have a relationship with their regional department store. These regionals have often spent many years and vast resources cultivating their brand image and affixing it in their customers’ psyche. By moving to a single national brand, Macy’s negates the regionals’ established brand value.

IMPERSONALITY OF A NATIONAL BRAND. Macy’s has to overcome the perception that one size doesn’t fit all. Macy’s must realize that Manhattan isn’t small town America. One of the benefits of the regional stores was the ability to serve different markets with regionally appropriate products and experience. Macy’s must do likewise and appeal to several distinct regional markets.

REPOSITIONING. Macy’s new strategy will be “affordable luxury” which will feature new private labeled brands and brand-names such as Ralph Lauren, Jones New York, Calvin Klein and Liz Claiborne. This “affordable luxury” strategy puts Macy’s somewhere in the middle of the department store food chain.

EVOLVING CUSTOMERS. The vast majority of customers have changed their shopping habits. Today’s customers are more inclined to research a purchase online, comparison shop and then visit a store. Today’s customers are well informed. Macy’s must appeal to this 21st century shopper and meet their needs throughout the entire customer lifecycle.

<Stores and their Shoppers>

	Target	Neiman Marcus	Macy’s	J.C. Penny
Age 18-34	104	99	92	89
Age 35-64	110	112	110	105
Age 65 and older	69	70	82	97
Education high school	82	71	78	92
Education college	112	115	113	105
Household size two or fewer	88	91	91	95
Income less than $40,000	63	55	56	75
Income $40,000-$99,000	121	96	116	120
Income $100,000 and more	155	240	186	122
Source: Claritas, a Nielsen company