Word: retailing
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Macy's first advantage is size. "It's now got the potential to be a Godzilla," says David Wolfe, a fashion retail consultant for the Doneger Group in New York City. Like Wal-Mart in the discount world, Macy's will wield a big and powerful roar that gives it leverage to get the best prices and exclusive products from vendors. But the recent history of retail suggests that size alone may not work. The most successful retailers have found their footing by focusing on one slice of the market. Luxury purveyors like Neiman Marcus, Nordstrom and Bloomingdale...
...retail Godzilla to perform that delicate merchandising dance, Macy's must use its marketing skill and purchasing muscle to manage a distinctive yet reasonably priced line of products and sell it in stores that, well, aren't exactly famous for their excitement. "It's easy to put names on all those doors," says consultant Wendy Leibmann of WSL Strategic Retail. "But the big challenge is to create a compelling retail environment...
Lundgren, a retail veteran and onetime CEO of Neiman Marcus, wants to do that by changing the look and feel of department-store shopping. On his agenda: broader aisles (managers will be assigned 32-in. rulers or measuring tapes to make sure they leave at least that much space), less cluttered departments (15% of display racks will be removed), upgraded fitting rooms (with plasma-screen TVs in the waiting area), stores that are easier to navigate ("way finding" signs will guide shoppers) and more help looking up prices (at least 35 bar-code readers in every store). The changes...
...merchandise on hand, of course, is to convince shoppers used to a steady diet of Macy's one-day sales that there's value in paying full price too. "Will they be able to wean the customer off the sale heroin? It's not going to be easy," says retail consultant Cynthia Cohen, president of Strategic Mindshare. To earn that premium, retail consultants say Macy's has to offer more merchandise that shoppers can't get anywhere else. Private labels like Charter Club and INC already make up about 18% of Federated's sales. Deborah Weinswig, a financial analyst with...
...danger is that Macy's will oversaturate its stores with merchandise that is exclusive but still unexciting. "Consumers don't want to go and find the same thing at every darn store," says Pam Danziger, president of Unity Marketing. Steven Keith Platt, head of a Hinsdale, Ill., retail think tank, the Platt Retail Institute, expects Federated to make deals with several well-known apparel and housewares makers to create products that consumers will find only at Macy's. Lundgren says he has already received at least half a dozen such offers but hasn't inked any deals...