Macy’s has spent a year inundating the Colorado market with ads, mailers, sports sponsorships and charity involvement.
That blanket of targeted marketing has paid off, according to customers and executives.
The department store became part of the local landscape just over a year ago, when Macy’s then- parent Federated Department Stores purchased May Co., parent of Foley’s and several other national brands,
The move nearly doubled the size of Federated, which earlier this year changed its corporate name to Macy’s Inc.
In Colorado, 11 Foley’s stores were converted into Macy’s, and two more Macy’s opened. Customers say the chain has become a regular part of their shopping routine.
“It’s like a staple, maybe the way a Sears is to an older generation,” said Mackenzie Claypool, 26, after buying a pair of shoes at the Cherry Creek Macy’s.
To win over Colorado customers, Macy’s implemented a three-pronged strategy to quickly become a fixture in the area, said Bob Mettler, chief executive of Macy’s West and also a member of the board of National Jewish Hospital.
The three legs are: charity involvement, sports and local event sponsorships, and advertising in English and Spanish.
“There are very important things about being a national company, but I think people say ‘So that’s fine’ and appreciate it,” Mettler said. “But how they feel about the company is about how the company operates in their community.”
A benefit for Macy’s in Colorado was that the company did not have to battle a deep loyalty to Foley’s, said C. Britt Beemer, chairman of Charleston, S.C.-based America’s Research Group.
“There wasn’t any real affinity or loyalty to May Co. (except) that they were the lowest-priced department store around,” he said. “I don’t think that price customers cared that much when May went away and Macy’s came in.”
In other cities, May Co. loyalists were upset about the change of their local store. In Chicago, for example, customers were fiercely loyal to Marshall Field’s. Customers led boycotts of Macy’s and many still post comments to blogs about how much they miss the venerated chain.
The nationwide conversion of May Co.-owned stores has not been without other challenges as well.
Executives have been kept busy absorbing hundreds of stores, unsuccessfully attempting to wean customers off coupons and working to broaden the chain’s appeal to include a more diverse shopper base.
For Macy’s, 2007 started out slower financially than expected, but executives point to a successful expansion and consolidation, though changing those stores to meet Macy’s expectations has been slow.
“Results in this process don’t come overnight – even as fast as we are capable of moving and as impatient as we might be,” chairman and president Terry Lundgren said at an annual stockholders meeting.
Macy’s reported total sales of $2.274 billion for five weeks ending Oct. 6, a decrease of 1.1 percent compared with the same period last year.
Sales were down in year-to-year comparisons, the company said, because it converted more than 400 former May Co. stores to Macy’s since last year.
Macy’s had pulled back on issuing coupons – something May Co. customers had grown to expect – earlier this year but has recently upped its coupon offerings after consumers complained.
The Macy’s 2007 Corporate Fact Book says, “Our first price-simplification initiative is to reduce our level of public couponing. Coupons will not disappear from Macy’s, but we are issuing fewer of them.”
The strategy didn’t work well, analysts say.
In September, Lundgren said publicly the company was reversing its position on coupons and rolling out more for the general public and not just for credit card-holders.
“May Co. was a big coupon retailer, and Macy’s hasn’t been,” Beemer said. “It’s been a bit of an aggravation for customers. Macy’s has brought some coupons back to satisfy some of the customers.”
In Denver, for Annie Walton, 27, a shopping trip is not complete without a stop at Macy’s. “Prices are reasonable for work,” she said.
This year the Colorado market became its own region of 12 stores and a Denver-based regional manager, Mettler said. Colorado had been run by a regional manager in California.
Macy’s plan
Macy’s three-pronged plan to be part of the community:
1. Charity involvement
2. Sports and local event sponsorships
3. Advertising in English and Spanish
