Reaching its 150th birthday in 2008, Macy’s Inc. has emerged as an American household icon over the past few decades. Macy’s sells a range of merchandise, including men’s, women’s, and children’s apparel, accessories, cosmetics, home furnishings, and other consumer goods. Since its merger with Federated Department Stores in 1994 and May Department stores in 1995, Macy’s has been pursuing ways to be more creative and distinctive in meeting customer needs and in delivering exceptional values. In order to maintain its share of the department store market, Macy’s has been aggressively investing in a distinguished shopping experience with unique merchandise, exclusive fashion brands, online sites, and breakthrough marketing. However, the ‘Credit Crunch’ in 2007 and 2008 has led to a tremendous decline in consumer confidence, causing decreases in store sales and profits. Macy’s 2008 fourth quarter earnings showed a profit of $750 million. Demographics, consumer spending, and fashion trends drive demand in the department store industry. Macy’s has always faced tough competition in its geographical areas, including discounters, luxury stores, and mail order retailers. Macy's is distinct from warehouse stores in that it does not sell goods in bulk and operates at a higher price point.
The company has launched localization initiative in division consolidation, aiming to accelerate its sales growth and increase profitability. This localization strategy is a locally driven merchandising project to put more region specific products in the local Macy’s stores they shop. The My Macy’s program was launched in February 2008.
Market Needs and Trends
Fifty years ago, most department stores were independent retail stores that offered one stop shopping for the average consumer. Over time, these stores would be slowly transformed into today’s shopping mall. Department stores have served as ‘anchors’ in over 1,200 shopping malls. It has been