macy’s Is Learning

macys2In an article called “Macy’s Discovers the Strength of Independent Retailers”,  “Retailing Together” reports on Macy’s recent announcement that they are laying off 7,000 workers and moving the merchandising and buying decisions into local district offices.  It seems that Macy’s has discovered that markets are different and that consumers, especially in the Midwest, like to have a part in the buying decision, too.  Imagine that!

Here in St. Louis, our traditional department store was Famous-Barr, part of the May Company.  When Federated Department Stores bought May in  2006   , the promise was that local management would be retained and that shoppers would notice little difference.  But it didn’t take long to see changes in the stores’ merchandise.

Famous-Barr became Macy’s and buyers located in the Midwest were replaced with national buyers.  Turns out not to have been such a great decision.  Now Macy’s is doing a 180 and trying to recover lost customers and sales.

Meanwhile, independent retailers just keep on doing what they’ve been doing all along.  If ladies in Missouri like a certain style of shoe, the local shoe store has them while Macy’s has been trying to force them to wear something else.

If gentlemen in Iowa prefer tweed sport coats, that’s what the local men’s shop is carrying while the national chain’s trendy offerings crowd the closeout rack.

On the other side of the coin, the agility and flexibility of the local merchant make it much easier for them to react when local tastes do change.

I hate to age myself, but I was working for a national retail chain in the early ‘7os.  The disco craze made Nehru jackets a hot item.  All the local stores (including Famous-Barr) had them in stock.  By the time my company’s buyers in New York reacted to the trend, got orders through the beaurocracy,  and got merchandise into the stores, I got my Nehru jackets the day after all the local stores had put them on closeout.

Not much has changed.  Customers are still  looking for value, not just price.  They’re looking for personal service, not an hour-long wait in a checkout line.  They’re looking for a place, like Cheers, “where everybody knows your name.”

And that, my friends, is what independent business is all about.

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3 Responses

  1. It’s good to hear another story about how independents can thrive, even if it ended poorly.

    The Retailing Together staff has been interviewing a lot of local retailers and are finding that many of them are doing fine, largely because they adapt to local changes and they have strong customer service. So, not only does Macy’s think the strategy is a good idea, as you noted, but the strategy has been working for retailers for, well, centuries.

    Unfortunately, we also see retailers that aren’t using these basic, proven practices. My impression is that there were a lot of retailers who got started during the recent boom times and their solid cash flow hid poor business practices. Those are the independents that are failing, but frankly, they deserve to fail. The independents that are attentive to local tastes, customer service, proper merchandising, inventory control and sensible promotion are doing fine.

  2. Eric,

    Thanks so much for the comment. Of course you’re right in saying that the best retail strategy is the same one the very first merchant used to make the very first sale. Nothing takes the place of good customer service.

    You’re also right in saying that in boom times, you can rent a store front, fill it with merchandise, and staff it with chimpanzees and you’ll make some sales. While I hate to see anyone fail, there’s no doubt that only the strong are going to survive. And strong doesn’t always equal big.

  3. It’s always a good idea to reread your comment before you hit the “submit” button. The comment about the chimpanzees is mine, not Eric’s. I was paraphrasing. Sorry for any confusion. For any chimpanzees reading this, no offense intended.

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