MY MACY’S LOCALIZATION INITIATIVE
BACKGROUND: Macy's Hispanic customer base continues to grow and currently amounts to 17% of the retailers customer base. Its share has increased by 1.1% from 2005 and represents $ 1.9 billion in apparel sales. Macy's expects its Hispanic customer base to exceed 20% of its total customer base within the next 10 years. In order to achieve this objective, Macy's has rolled out a localization strategy across the country and has migrated from an operating division structure to one unified organization for all of Macy's. Macy's also developed what it calls the "The True Total Approach".
The below text is based on a presentation by Krystin Page, Multicultural Marketing Director at Macy's, at Portada's Fourth Annual Hispanic Digital and Print Media Conference ("Connecting National Brands to Local Audiences") last Fall.
1) MY MACY'S ROLLED OUT
After initial pilots in 20 markets in 2008, Macy's rolled out the My Macy's localization initiative across the country in 2009. In doing so, they created eight stores regions and 49 new districts (for a total of 69 districts). Macy's added human intelligence - including new district merchants and planners - in each district in a manner that enables the company to tailor merchandise assortments and the shopping experience by location. My Macy's is proving itself to be a powerful competitive differentiator and driver of sales. In 2009, all of the company's top 12 markets in sales growth were from the initial My Macy's pilot districts.
2) MACY'S ORGANIZATION UNIFIED
Concurrent with the rollout of My Macy's, the company migrated from an operating division structure to one unified organization for all of Macy's. This allowed Macy's to eliminate redundancies in central offices and instituting consistency in its stores. It also enabled it to act more quickly, sharpen execution and partner more effectively with vendors and business partners while reducing administrative expense.
3) DEVELOPING CUSTOMER-CENTRIC APPROACHES: THE TRUE TOTAL APPROACH
Macy's analyzes customer behavior data collected in partnership with the consumer insights firm Dunnhumby USA, of which Macy's is the exclusive department store client. Macy's has begun to model the shopping patterns of Macy's customers to better serve each consumer's individual needs. This led to systematic experimentation and testing of new marketing approaches in 2010 and the years ahead. Identifying and acting on consumer insights is integral to their determination to place the customer at the center of their decision-making.
Other elements of the true total approach include: To understand the customer at the granular level (the store level using various customer matrixes). The fact that sweeping generalizations of their customers are no longer required. Finally, the approach also provides a big opportunity to exploit big ideas by door.
4) BUSINESS STRATEGY REFRESHED
Macy's ended 2009 by updating its business and brand strategy to guide the growth in sales and profitability planned for 2010 and beyond. In doing so, the company honed its focus on specific metrics. Macy's refreshed its four strategic priorities - Assortment, Value, Shopping Experience and Marketing - with a new generation of tactics. It's working to create a culture in the organization that embraces innovation and testing an inclusive work environment, the development of people, and collaboration internally and externally. Examples of how this reflects on the marketing strategy are: Segmentation of customer by shopping behavior, Direct mail books begin to be individualized, Events emerging from communities.
5) HISPANIC MARKETING - MEDIA VEHICLES
Hispanic Marketing/Media projects of Macy's (in- language) include:
> TV is still King (National)
> Radio (National)
> Magazines (National/Regional)
> Newspaper (creative is multicultural)
> Digital/ Social media
> Diversity Teams/External Affairs
> Public Relations
> Cause Marketing
> Mexico initiatives
> Hispanic Heritage Month- National Event with My Macy's Local Touch Points .
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