1. Terry Lundgren (CEO, chairman and president)
The Model Under Pressure New Strategies
- One Macy’s
- My Macy’s
Ongoing Threats
- Customer Mix
- Customer Service
- Omnichannel
Executing in an Uncertain Environment
- International Expention
- Investing in Human Resources
- Creation of Freestanding Speciality Stores for Private Label Brands

2. Terry Lundgren His Life Early Working Life The steps to Macy’s
Born in 1952, South California
The son of a hardworking dad
Started working part-time when 19
His Life
In 1975, started as a trainee at a divison of the company Federated
10 years in different positions
In 1994, became CEO of Federated
Early Working Life
Integration of merchandising functions of Federated and Macy’s
In 2004, became CEO of Macy’s
In 2005, Federated purchased Macy’s
In 2007, name changed to Macy’s
The steps to Macy’s

3. The Model Under Pressure: Macy’s Respond
2008/2009: biggest crisis since Great Depression
Decline of retail sales, productivity
New opportunities for significant changes in Macy’s operating system
Time to take risks
A massive reorganization and cost cutting program:
Leveraging the size of Macy’s by consolidation and centralizing all key functions (One Macy’s)
Customizing the offering of stores in every local market (My Macy’s)

4. One Macy’s
- Until 2008, seven semi-autonomous regional operating divisions.
- Performing functions in divisional level created inefficiencies.
- Inability to focus on company strategies and customer needs
- One Macy’s: centralization for reducing administrative expenses, improving nationwide strategies, increasing speed
- Conversion of all chains to the Macy’s banner (except Bloomingdales)
- In 2009, all divisions unified.
- One centralized organization for each key operating fuctions
- Stores in 69 districts with stores each. Districts grouped into 8 regions.
- The new structure: reduction of local operations executives’ control area and increase of their ability to make products

5. My Macy’s - Roots of the strategy: 2007
-Problem of One Macy’s: Insufficient understanding of customers’ needs
- A new organizational model: city level insights on consumer preferences
- More responsibility to district executives
- My Macy’s concept: never marketed explicity, but realized by customers

6. Ongoing Threats
Customer Mix
Omnichannel
Customer Service

7. 1. Customer Mix
Already focused on Gen-X (born from mid ) and Baby Boom (born from mid )
As customers aged, shifting spendings from product to experience such as clothing to vacations
Cause spending less on retail
To hedge against this risk, enhance its appeal to customers (13-30) called millenials
Difficult to apply: going beyond target customer range
Created a private brand, Bar III, for millenials
Opened a temporary pop-up store in New York City
In addition, created Impulse Beauty makeup department offering brands popular with younger customers
To do that, focused on social media -> e-commerce

8. 2. Customer Service product and service Trade off between
Offered large product assortment
No support extensive number of salespeople
Solution: Training program “Magic Selling”

9. “Magic Selling” Meet and Make a Connection Ask Questions and Listen
Give Options, Give Advice
Inspire to Buy ... Sell More
Celebrate The Purchase

10. 3. Omnichannel Strategy Creating seamless shopping experience
Creating a connection line between customer, Internet and mobile technology
Goal
Showing they surround customers
Respond their needs independent from the way they prefer
To Support
Investment in system called “Search & Send”
Enable salespeople access to products at any store
Order it for delivery to customer’s home

11. New Opportunities International Expension Investing in Human Resource
Creation of Freestanding Specialty Stores for Private Label Brands

12. 1. International Expension
needed because ...
Growing in US difficult
Intense competition
Low productivity of the department store format
Broader economic trends
By this way
Reach to global customer
Get closer to supplies

13. 2. Investing in Human Resource
Macy’s thinks...
Important to engage with customers
Understand their needs
Use technology to convert those needs to sale
Support idea “Right person in right place”
In long term -> salesperson -> expert

14. 3. Creation of Freestanding Specialty Stores for Private Label Brands
Tested this strategy in late 1980’s on three private label lines
Aeropostale (casual apparel for teens)
Charter Club (classic apparel for women aged 25 to 55)
Fantasies by Morgan Tailor (intimate apparel)
Fantasies by Morgan Tailor discontinued, others sold

15. Question is that...? How would Macy’s grow in the future?
Should it invest in specialty stores or not?