Macy's finding success with African-Americans by focusing on local, local, local
By Stephanie Clifford The N.Y. Times
Long before it was renamed Macy's, the department store of choice here was Rich's. Opening just after the Civil War, it drew generations of Atlantans with its coconut cake and the Pink Pig, a Christmastime children's train.
Now, after years of ownership by New York-based Macy's, the old Rich's stores are feeling a bit more like Atlanta again. The generic display near an entrance at the Cumberland Mall store, for example, has been replaced with a rack of white satin suits - yes, even in October.
"We have a lot of megachurches here in Atlanta, and for first Sunday, the mothers of the church wear white all year long," said Terry McDonald, a human resources manager for Macy's Cumberland and surrounding stores, referring to a church service held once every month.
After decades of acquiring, consolidating and centralizing, the department store chain is rediscovering - and financially exploiting - its multiple local roots, advancing a trend that is quickly being adopted by other retailers like Saks Fifth Avenue and Best Buy.
It is a lesson many companies overlooked in the past 30 years as they rolled smaller stores into huge national brands, and headquarters required what the outlets in Biloxi or Boise sell.
But years of economic turmoil for the retail industry have helped refresh memories. While many national retailers continue to see sales declines in a sour economy, Macy's says its first full year of "going local" has helped drive significant increases and "lifted the entire Macy's performance," according to its chairman and chief executive, Terry J. Lundgren.
Macy's, which has a store at Lakeland Square mall and a stand-alone store in Winter Haven, is on track to add $1 billion in sales in 2010 from stores open more than a year, he said. The retailer had $23.5 billion in sales in 2009.
"We have research information, and we think about household income and population size, but I think it's much more accurate to have people living in the marketplace tell you, 'This is who's shopping in my store,'" Lundgren said.
The trend leaves some shoppers cold - Macy's makeover of stores here has not stopped the longing for the real Rich's among many Atlantans - but retail analysts say stores of all types are increasingly experimenting with local assortments to spur sales wherever they can.
"In prior years, with the recession, it became all about cost-cutting no matter what," said Esteban Bowles, a retail consultant with A.T. Kearney. "Now companies are seeing the light and looking for the rebound."
Macy's tested its new local approach in a handful of stores in 2008, rolling it out in all 810 stores last year. In essence, Macy's requires sales clerks and store managers to examine the local population almost like anthropologists - studying, for example, what churchgoing black women here in Atlanta shop for compared with the shopping habits of Microsoft wives, as employees call one segment of shoppers in the store in Bellevue, Wash.
At the same time, the retailer doubled its staff overseeing store assortments and decreased the stores that staff dealt with. It required the people responsible for merchandise assortment to visit stores daily, added log books at each register where sales clerks entered suggestions from shoppers and introduced a review process so the staff visiting stores could make recommendations to buyers.
There are items that would fit in an olden-days department store.
But localization is not just about turning back the clock. When many of the regional chains were at their height, shoppers tended to be middle-class white women. Now, they often are not.
In Bellevue, for example, fewer than 4 percent of residents were Asian in 1980, when the Macy's store there was a Bon Marche. The most recent Census Bureau survey showed the Asian population in Bellevue was 23.2 percent, attributable in part to the tech explosion in the area.
So the Bellevue Macy's has added more extra small and small sizes - including size 0 in women's clothing and 36 in men's suits. And it got rid of its big and tall section. It also changed the jewelry selection to appeal to the tastes of Indian customers - more gold and precious gems and less silver - and doubled its sock department because of the many Microsoft visitors who travel and apparently forget their socks.
"You need to be able to target the pockets of consumers that exist in different shapes and forms in each of the communities," said Bowles, the retail consultant.
At the Macy's in the Cumberland Mall here, localization has taken an entirely different look.
Cumberland is in the top-tenth of all Macy's stores for hat sales, and in the men's department, there are hats in virtually every section, from wool fedoras to Polo baseball caps. In the past year or so, the store has doubled both the space and the sales of men's hats.
"The fedora's real popular, too, because you see Ne-Yo in it," said Leigh Ott, the Macy's Cumberland store manager, referring to the rhythm and blues singer. "Our African-American customers, they like the fashion, they like what's new."
The Cumberland store also tripled the square footage of the big and tall department and has added curvy signs throughout the store to alert female shoppers to different fits. It also carries a special brand of jeans, PZI, that is for curvier women.
One popular men's brand just in the Macy's Cumberland store is Akoo, designed by the Atlanta rapper T.I. One Akoo lime green shirt is only available in sizes XL to 4XL.
"This customer isn't just big; he's also tall," said Leia Bangs, district vice president for the Macy's stores in western Atlanta.
And in the home department, the store has stocked up on a baking dish with a warmer stand and 34-quart stock pots ("for your Sunday church functions," McDonald explained).
Peter Sachse, chief marketing officer of Macy's, has seen the changes from both sides; he had been the president of Bon Marche in the Northwest before it was acquired by Macy's. He said what makes this attempt at localization - known within the company as My Macy's - different from running a local department store has been the systematic collection of information.
Still, for some shoppers, Macy's will always be that New York store - a mindset that even the most aggressive and targeted retailing might never overcome. "I don't know what it was about the Bon - it just seemed to have a more personal touch," said Maureen Haley, 54, of Kenmore, Wash. https://sites.google.com/site/mayuradocs/PinIt.png
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