Macy's Traditional Department Store

Make a situational analysis of the traditional department store industry and of Macy’s as of 2005. Which factors in the external environment could (positively or negatively) affect the success of Macy’s new strategy? Which internal factors could affect the success of the company’s strategy? (don’t forget to look at the exhibits!)
Established in New York City in 1858, Macy’s has become one of the nation’s most important fashion retailers in the United States of America and around the world through online shopping. In 2005-2006, Macy’s changed its naming policy. It now has fifteen regional department store chains whereas it previously presented under around 810 stores nationwide (Johnson, 2011: 1). The main reason for this move to a national brand was that the traditional department store industry had a negative impact on the company partly due to the general economic environment. Until the early 2000s, the sales were decreasing and the company was in a mature phase in terms of business life cycle.
As for the products being sold, the company is divided into five segments: High-end Luxury, High-end General, Upper Middle, Lower Middle, and Low-end. The main products offered by Macy’s are women clothing, accessories and household products, which was later extended to products aimed at men, and children. Each department store provides many different products and services to the customers, which has been groundbreaking and a followed model in the business world. “This effort [to convert federated department stores into Macy’s brand] will be complete when approximately 400 May Department Stores are converted to the Macy’s name in September of this year [2005]”. The phase of consolidation had some consequences such as a decrease in sales a...

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...of products by proposing products like “affordable luxury” and “fashion at an affordable price” (Johnson, 2011: 6). The sixth one is the emphasis put on the brand equity. Another point enhances is the new model in comparison to the traditional one that offer to Macy’s to diversified them to their competitors. By proposing fashion events, Macy’s started to attract a specific public like young women. Finally, Macy’s provides a direct discount on the articles to its customers rather than discount by coupon.

• Economies of scale
• Ethical, socially responsible, and sustainable company with strong value
• Structured Code of conduct for all the company’s vendor
• Healthy portfolio
• Innovative company
• Bloomingdales a subsidiary of Macy’s appeals to upscale customers while Macy’s offers “affordable luxury” items.
• Large piece of the market share