DANCIN' IN THE STREET

To view the new Macy's campaign Just click on http://www1.macys.com/campaign/macystv_brand_relaunch.jsp

It’s been interesting seeing the nationalization of Macy’s taking place on televisions and in newspapers in almost every major market in the country the past couple weeks. Saying good-bye to venerable names like Marshall Field’s, Hecht Co., Burdines, Foley’s and others, Macy’s has launched a well produced national campaign built around one of my favorite Motown songs-- Martha Reeve’s and The Vadelas’ “Dancin in the Streets”. In many of the cities mentioned in the song, Macy’s banner now hangs high in shopping center after shopping center. The new campaign extols that the excitement of Herald Square is now being generated in market after market. Or is it?

Federated CEO Terry Lundgren is confident that the consolidation of the stores under the famous Macy’s logo will bring positive sales trends to the chain of stores that have been floundering the past several years. Maybe, Mr. Lundgren should listen more closely to his new theme song. Yes, the customers are not only dancing in the streets, but they are also spending more of their time shopping there as well. Part of the problem with today’s department stores is that they are still anchored in regional malls where today’s customers no longer dance around every week, much less shop. The customers are now excited about the new downtowns and neighborhoods where stores are cropping up more regularly and where customers love the convenience (and the ambience) of being able to park and shop right in front of the store. It holds true for the “Power Centers” which are being built all around town, including many on the same sites where defunct regional shopping malls were recently razed. The excitement of Macy’s flagship on Herald Square just doesn’t exist in the next great Town Center mall and the customers know it. They also know that the stores there haven’t branded themselves to their customers by providing an exciting—OK, at the very least, pleasurable —shopping experience.

What’s more they aren’t addressing the stiff competition from the Targets, Kohl’s, and others who are not only offering as much fashion but also doing it more conveniently and at a better price. Last week in a presentation to retail marketing executives, Michael Francis, Target’s CMO, said that their store’s biggest share of market gains are coming from the department stores. Wal-Mart has been taking share for years with price and selection. Target now takes it with fashion and the excitement that department stores were known for when they identified closely with the communities in which they were located.

The new “Streets” campaign is well executed, the message is clear, and the media weight will bring higher awareness for the Macy’s name—as if they needed it. However, it does not give me—a veteran of 8 years in the department store business—or any other customers a reason to shop a store that they haven’t visited in months. They have not given a reason to abandon Kohl’s, Crate & Barrel, or Men’s Warehouse and come back to the mall
So, Macy’s is everywhere. Now why should we shop there??