Making it MY STORE make it MY BRAND

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Going Local. What a Novel Idea?

So, after facing a 2% overall sales decline last year, Macy’s has decided that all customers are not the same. Gee, I thought the same people shopped Herald Square as those who shop Dadeland in Miami or Fashion Square in Santa Monica??? There’s no doubt that Macy’s was--and is--one of the great Brands in retail. Its history and fame are unlike any other department store chain except it’s sister store Bloomingdales. The move to consolidate all of the department store brands by Federated a few years ago made perfect sense from not only the CFO’s point of view, but also for many customers as well. The efficiencies of marketing one brand nationwide with a singular voice and message promised to bring about some of the best marketing in the industry.

Now, we hear that it isn’t working and that a cookie cutter doesn’t fit on State Street in Chicago the same way as on Nicollet Mall in Minneapolis. Nothing new here. Reminds me of my old dress buying days at Hudson’s many moons ago. We knew back then that the key to success was to adjust our inventories and promotions from one branch to another, knowing that the customers who shopped downtown were a lot different than those who shopped at Northland or Pontiac Mall. In their heyday, the key to the success of the department store was their local personality and community commitment. Shopping at the department store was an experience not just a purchase trip. The promotions were unique to the market and the merchandise suited not just the geography but also the psyche of the local citizens. Sears and Penney’s were there, too, but it was the department store that knew its market, its customers and was a special place to shop.

With all of the consolidations in the past couple decades the disappearance of this “specialness” coincides with the poor performance of department stores compared to the discounters and the big box specialty chains. The overstocked racks of apparel topped by too many 75% off clearance signs and the mandatory Liz or Ralph shops, have, in fact, made these stores boring and no longer part of our lives. The brands have disappeared and so have the sales.

Why this is such a mystery that Terry Lundgren and other category CEO’s are just realizing amazes me. The importance of adjusting to the local market (meaning the individual store’s market area) has been identified for years. Walgreen’s realized this a couple decades ago when they made a commitment to developing the systems necessary to be able to adjust inventories by item and sku to meet the needs of the local (for drug stores that may be less than a mile around the store) marketplace. What sells in a downtown Chicago store may not sell as well at a beach store in Clearwater and vice versa. If you have what most of the customers want, you’ll sell more of it (even at regular prices) more often. Keeping the store and operations staff loyal and consistent is another key to why this chain continues to outperform the category by more than double the sales per store. Sure, they still are aggressive weekly sale advertisers, but it’s the every day sales that make a difference to customers who are in the store a few times a week.

I believe the department stores should take a lesson from our friends from Deerfield and also a lesson from their local predecessors who dominated their markets years ago.
 Make the stores special, make the events special, and I think the customers will return. Special is not having the Trumps, Stewarts, or P Diddy’s as spokespersons either.
 Make the message relevant and timely to the customers in each market.
 Make the store My Store and re-develop the relationships that are necessary for this category to survive.
That’s the key to branding today---just like always.

SPEAKING OF RELATIONSHIPS
Strong customer relationships don’t happen by accident. It takes an effective CRM program and a commitment to reaching your target more effectively. To learn how to do this, don’t forget the annual CRMC conference in Chicago on June 11-13 at the Westin River North Hotel. I have reviewed the program and it looks like one of the best since Fred Newell started this important opportunity 14 years ago.
Just go to www.loyalty.vg to learn more
or go to http://www.loyalty.vg/conferences/CRMC2008/CRMC2008_agenda.aspx to view the program.