Macy's leadership proper decision became doubtful when the downturn persisted after 2008, because for the first time in a number of years it was unable to sell off its substantial Christmas inventory. The loss in profit was exacerbated by a growth in the prices of gas as well as production problems regarding silk cotton, two vital ingredients that negatively impacted the price of several products Mac's resource to its customers nation-wide. The rise along the way of these variables pressured Mac's to improve the prices of certain goods to its customers, and this in the final analysis will lead to decrease in the sales size and the gains gained by the company which had positioned itself in the upper-middle portion of the marketplace.
The problem was made even more difficult for Macy's, in that the industry was quite competitive within a 5 market section, particularly the high-end luxury, high-end basic, upper-middle, lower-middle, and the low-end, and the business could not over night launch into any of these other sections without spending time creating a workable strategy that will not negatively have an impact on its revenue generation, brand image, market show, the continue option of the jobs of several of its employees in several locations, and the retention of the commitment of customers and suppliers. Experts in the tactical management field for this industry were also of the general consensus that the original department store concept was either at an adult or declining stage, and hence Macy's had to find a strategy that will enable it efficiently reposition itself or stay a brandname entity to its dedicated customers, but proceeding into extinction. The company will be forced to look within itself and in the exterior environment to see what process, systems, resources, procedures, tactics, workers changes, successful customer preferences, unprofitable activities and relationships in terms of cost, contractual contracts, replicable competitor strategies, and clinical tests, as well as are more impressive in product delivery, to find a viable and ecological position.
A critical challenge that will face Macy's at the end of its loan consolidation and repositioning exercise would be the conception of its devoted customers that the business has improved in conditions of its new product, prices and services, which may bring about substantial losses in profits and market shares as well as higher market dominance form its competition. These factors, as well as the pursuit of a broader concentrate using customers tastes rather than demographics, the embracing activities that differentiates it from its opponents, execution of Everyday Value, and the use of fashion and superstars to attract more youthful customers were the foundations under which the tactical decision of the management of Macy's to put the company between the mid-level and the high-end market sections were made. This intended the company that under this new image and position each store location in different zones of the country will have the same products priced based on the perceived quality objectives of the customers, and as a result Macy's can generate greater than normal revenues from products which were made at low fixed rates by its suppliers.
Macy's repositioning and consolidating grew out of the continuing damage in income in retail zones that were once prosperous, however the negative downturns in economical climate may pressure a lot of its opponents to close in areas where Macy's, because of its size, market durability, the national range of its brand and advertizing budget, as well as its new strategy, was able to remain feasible and capitalize on the vacuums created. In these situations the firms profited by getting greater sales quantity from customers which were previously dished up by its competition. However, there's also negative aspects to the loan consolidation and repositioning strategy across the country by Macys, as it resulted lots of stores being shut, employees of the stores fired, transferred or demoted, centered suppliers contracts terminated, distribution routes terminated or reduced, and companies and consumers in a number of communities depending on Macy's stores and its own suppliers were left destitute. The image of Macy's in the exterior environment among these specific past stakeholders will be a terribly tarnished one and may have negative repercussion in conditions of future sales being lost to its rivals, and possible sabotage of company's products and services.
Internally, Macy's from a good perspective will be able to reduce the device cost of its advertising and promotional budgets considerably, while producing super normal revenues at the same time, Additionally, the company will take advantage of the sales, inventory, systems and distributions connection with the ex - Federated employees, an increase in living area for greater displays and marketing promotions and advantages gained from the best locations of several of the ex - stores, in conditions of the ready access to former Federated consumers and the opportunity to market its new lines of products using the well know celebrities like Donald Trump, Jessica Simpson, and Usher among others. It could be argued that Macy' definitely strategy created synergy and an exponential revenue generating entity, when it is able to incorporate the use of fashion designers, the concept of affordable luxury, the utilization of popular designers, and celebrities, its Fourth of July Fireworks, the twelve-monthly Macy's Thanksgiving Day Parade and a great many other national situations into one program, because individually all these activities are cash cows themselves, and by incorporating them, Macy's has created a distinctive and valuable marketing position on the countrywide landscape which will be problematic for its competitors to replicate.
Furthermore, the discussion that Federated Department stores attempt to distinguish the new entity from its competition was certainly a brilliant idea could be reinforced by the fact that the Macy's before the recession and the one recreated because of the recession were completely different entities, especially in conditions of the types of customers being offered, the number of products on display in wider and more accommodating aisles, the blended knowledge, skill, attitude and connection with its employees, and the kind of customer charm being made bottom on preference, and the enduring impact of its strong marketing and advertising programs. The later status will ensue the business will positioned to create maximum revenues from lots of streams while maintain steadily its market segmentation in a very competitive retailing industry. Critics could argue that experienced Macy's not had the opportunity through Federated Department Stores to be more highly relevant to its customers by appealing to the younger groupings, by changing its brand from a focus on specific demographics compared to that of focusing on attracting fashion conscious customers and inserting the Everyday Value strategy; where customer were able to get products without having to wait for sales day and the option of coupons, the company would have become obsolete in just a matter of a few years.
An evaluation of Macy's 2005 brings to light several talents and weakness that may be talked about. Macy's through the process was able to acquire 810 stores in 50 state governments, and could design systems, low cost advertising strategies with broader reach and better revenue technology, purchase merchandise at the same price for everyone stores, minimize syndication and supervision cost through centralization, as well as reducing signage cost, while attaining high degrees of visibility because of its countrywide brand. The offshoot from these cost keeping exercises was that they allowed Macy's to provide goods at very low cost to its stores and therefore it was able to maintain high degrees of competiveness in getting customers to its stores scheduled to affordability of the of the goods on screen. Macy's by this plan was also able to deter or lessen the access of new competitors as well as the introduction of substitutes into its section of the market segment.
Annually Macy has always been able to take full advantage of its image as Americas Department Store because it is able to use its nationally televised Thanksgiving Parade in New York, and the Fourth of July Celebrations to saturate the marketplace using its product range, current styles and store locations using top superstars like Ralph Lauren, Martha Stewart, Alfani, Michael Kors and America Rags, in a way that its financial profits be difficult to evaluate successfully. Federated Team Store decision to preserve Bloomingdale with 40 stores, in order to keep the stores position at the slighter higher-end, and incorporating it with brands like Burdine, Richs and Goldsmith; which were acquired over ages, was a essential proper move that permit Macy's to keep its loyal customers, when using other stores to broaden its market reach. This reduces the level of revenue loss that can have occurred usually.
The mixture of the reputations of both Macy's and Federated Department was also beneficial to recreated entity, in that both acquired their individual dedicated group of customers, they could cross teach employees to expedite service delivery, they can share floor space to draw in more customers to each locale, talk about advertising cost, and make volume acquisitions at low product cost, so that their customers could reap the benefits of low prices and remain loyal going forward. The drawback to the loan consolidation and repositioning strategy is within the region of stores closures and prices increases that faithful customers would come in contact with in the process. Store closures brings increased economic hardship to neighborhoods, other business, the training of children whose parents were employees of Macy's and the suppliers of goods to these stores, who had their contracts cancelled or have to make longer travels using more costly gasoline cost to earn the same amount of earnings.
Loyal customer to Macy's will probably avoid the high prices they can be subjected to, by embracing the competitors like Wal-Mart at the reduced end of market portion, and may never return thereby depriving the company from revenues which could amount to thousands, depending on the quantity of stores and the populace centers where these customers are located. Macy's in cooperation with Federated Section store have carried out eight different components of its loan consolidation and repositioning strategy to carve out a fresh company that was unique and hold s a very important position in this very competitive retail market. This is because of the assets like excellent locations, knowledgeable employees, reputable companies like Burdine, Richs, and Goldsmith, the utilization of styles to entice specific segments of the market, national advertising strategies, the recruitment of stars the utilization of Everyday Value, instituting wedding registry, staging regular fashion shows, increasing dressing and slumber rooms, re-designing of aisles to meet up with the style of consumers in different locations, the engagement of national brands like Tommy Hilfiger, Ralph, Martha Stewart among others as well as the concerted work of the control of the company to be sure these activities differentiate it from the competition.
Macy's leadership further increased the image of the business, by abandoning the standardized merchandising strategy and implementing the one which was tailored to meet up with the unique flavour of customers in each location, so that the shopping encounters created will direct result these customers increasing the frequencies in which they will visit these stores and make purchases. Also, Macy's by this approach acquired also made provision for these customers to activate in impulsive buying, by widening the aisle and including more products and advertisements, so that it can continually maximize sales.
The author of the article could have helped to justify the argument that Macys new position was unique and valuable, if research was done on the strategies other competitors were engaged in at the same time, and how different these were from the business under review, but in the absence of such information, the initiatives of the leadership of the business to make use of its nationally televised events to promote the products of the business, as well as the utilization of occasions like fashion shows concerning celebrities who know fashion designers and brands, goes a very far way to ensure the nation see the new Macy's brand on display and recognize in the way it was supposed by its marketers. Macy's strategy of loan consolidation and repositioning was indeed impressive in every respect, despite operational problems in some areas, which auger well futuristically.
However, for Macy's to keep its current position and uniqueness, change should be a constant in all operational areas, as consumer preferences will not remain the same, neither the strategies its opponents, s engages in, nor the economical condition that prevails in the country at any point in time. If Macy's management actually embrace this change principle, Macy's future will be assured. The success was gained from utilizing strategies that possible weren't prevalent in virtually any other company to the level that Macy's experienced done. Customers became the basis because of its strategies, in conditions of the market segments made, the objectives of the national offers and advertisings created, the layout of the aisle, the type and age group of the stars recruited, a knowledge of the key of their likes, and the fashioner designers brought into the blend. It had been because of the techniques and strategies that the company commenced to increase its relevance and uniqueness among its targeted customers. Macy's therefore acquired definitely found ways to be less conventional than the original office store as a results of its well developed and thought out and timely executed strategies, and really should continue reaping the success for quite some time to come.
