How Should Macy's and Sears Remake their Stores?

Posted by: Reena Jana on February 7, 2008

With today’s news of Macy’s slashing jobs and looking to “localize” their stores, coupled with recent news of Sears looking to clean-up and revamp its stores, I can’t help but wonder how these retailers will re-design their physical spaces.

And I also can’t help but wonder if the department store of the past be transformed into some fresh, new incarnation.

But what would that mean? What models would they follow?

I’m wondering if Macy’s — or Sears, for that matter — perhaps follow what some hotel chains, such as InterContinental Group, have been doing: taking cues from boutique hotels.

Who knows, perhaps the tough times at Macy’s and Sears will result in retail innovation.

Reader Comments

Jim

February 8, 2008 7:04 PM

Back in the early to mid 2000's, before a number of regional brands were "Macyized", the grande dame of them all, Chicago's Marshall Field's was enjoying a great comeback by reinventing its State Street flagship as an emporium of boutiques from Dolce & Gabbana and French Connection UK to Merz Apothecary and more to complement the quality Marshall Field's brands and goods already offered. In part inspired by Selfridge's (a store that can trade its roots to Marshall Field's), Field's was on the upswing.

Macy's destroyed all that. Many of the best boutiques left. The legendary flagship became just another Macy's when that store had been Chicago's number three destination as recently as 2005.

The real problem at Macy's is President/Chairman/CEO Terry Lundgren. His "Macy's everywhere" plan is flop. His plan to "localize" store is pretty much a half-hearted admission of that.

For Macy's to come back, Lundgren needs to go and new leadership needs to pick up the pieces, bring back certain regional stores--especially Marshall Field's, reclaiming and making the most of the great assets and brand equity which Terry Lundgren has foolishly discarded in the past two to three years.

STEVE

February 8, 2008 11:24 PM

The "My Macy's" initiative was a year in the making and is in no way an admission that Lundgren's "Macy's everywhere" plan is a flop. This is simply a natural progression of that plan. The smaller divisions (2 of which were former May Co. offices) were always scheduled for closure at the right time. What would doom Macy's is a return to the antiquated idea of multiple trade names. Recent sales declines are not that much different than it's competitors, with Macy's doing better in most cases, and much to much is being read into it. Macy's isn't doing as badly as is being portrayed.

Jeff

February 10, 2008 1:24 PM

When Macy's took over May's, its entire mantra was "Macy's everywhere" and "economies of scale". Macy's arrogantly assumed that brand recognition associated with an annual parade and a 1940s movie, along with low cost/high margin in-house brands, would translate easily across the country. Skeptical consumers would simply be "retrained" and, in a mere matter of months, Terry Lundregn and team would elevate themselves to Retailers Hall of Fame status for "saving the department store". Unfortunately, Macy's greatly overestimated the value of its own brand and greatly underestimated the value of many of the brands it usurped.

Where is Macy's approximately two years later? Their sales are falling faster than many of their competitors in the American department store sector. Almost 10,000 employees have lost their jobs under Macy's stewardship and the stock price? Don't ask.

Simple fact of the matter is that Macy's has flopped...and big time. It's now embarking on a somewhat schizophrenic attempt to redefine itself...again. How many more Macy's employees will lose their jobs? How many more communities will stand to lose tax revenue, tourism, you name it, due to Macy's continued arrogance? Probably too many. Meanwhile, Macy's will continue to blame their woes on everything from the "macroeconomic environment" to "the weather".

One more note...it seems that Macy's top brass, including Terry Lundgren, have unloaded a considerable amount of Macy's stock recently. What could that possibly mean?

Bruce Temkin

February 11, 2008 8:39 PM

Both Sears and Macys have an opportunity to cater to cross-channel shoppers. We’ve evaluated Web-to-store and store-to-Web experiences; nobody does it very well (see my research: http://www.forrester.com/Research/Document/0,7211,44252,00.html). Department stores should make it really easy for an online shopper to find and reserve products online and then go see and buy them in the store. Or let customers input a product in the store into an online wish list and then make a decision to buy it from home. But no matter what approach Macy’s and Sears take, they’ll need to master what I’ve called Experience-Based Differentiation: blending deep insights about their customers with a clear understanding of their brand attributes (see my blog: http://experiencematters.wordpress.com/2007/06/17/experience-based-differentiation/).

Diana

April 30, 2008 6:18 AM

Macys..hmmm..the concept of cloning America..taking away our choice of where and how to shop. I miss the day of Strawbridge and Clothier and John Wannamaker. The day when customer serviec was truly important and employees were cherished for their hard work and years of dedication. Terry Lundgren took away real customer service. He overloaded the workload on the associates and managers by reducing staff to such sparce levels their ability to deliver great customer service is impossible and their tasks are never ending. When the CEO sells his stock, where does his belief in his mission leave the loyal employees and customers that long for the days or the past.

D. Dornstadter

October 8, 2008 9:31 PM

As I speak at various guest lectures at Big Ten and Ivy League universities, I am continually impressed with how professors and students alike, have a great disdain and hatred for what Terry Lundgren has done to "macy-ify" the entire U.S. with plain, boring macy stores. They state that regional department stores have a distinct place in American society and business, which formerly set them apart from other stores and cities. macy's has become nothing more than what Penney's, Sears, Kohl's and Target has become, Blandness and disappearance of true customer service. Once you've been in a macy's, there is no need not desire to go into another one when traveling.
Marshall Field's was a tourist destination and world class retail emporium, which distinguished Chicago and the U.S. when compared with Harrod's, PrenTemps, and Galleries Lafayette. Macy's is laughable, if it weren't so sad by what it has taken away from us.
Boycott macy's and bloomingdales! (macy's does own bloomingdales too.)

Gretchen

August 13, 2009 10:56 AM

As a Macy's employee, I must admit that the traffic in our Michigan store is down. The Detroit area has been hard-hit due to the auto industry failures. But the current stock does reflect the mix in the community, and I am consistently making the "goals" in sales that has been preset for me by Macy's. We are surviving, and something must be working because I still am. I started working under Marshall Field's and went through the transition to Macy's. Marshall Field's was a little more conscious of the "elite" in stocking the shelves, but Macy's appears to be more realistic in view of the present economy. If you are traveling, you are not likely to find all Macy's stores the same. I spent three days in Chicago and visited the Macy's there. It was really somewhat different in consumer choices than the Michigan store where I am employed. Hope we keep on keeping on.

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