02
THE FOLLOWING IS AN ANALYSIS OF BLOOMINGDALE’S, VALIDATING THE NEED OF A NEW STRATEGIC INITIATIVE FOR THE COMPANY. WE HAVE INCLUDED AN ASSESSMENT OF THE COMPANY HISTORY, MARKET OPPORTUNITY & TARGET CONSUMER, THE ROLE OF TECHNOLOGY, AND THE IMRPOVEMENT OF THEIR OMNICHANNEL MARKETING STRATEGY.
CONTENTS
02 06 06 20 22 30 34 38 44 46 50 52
INTRODUCTION COMPANY OVERVIEW OVERVIEW MARKET OVERVIEW POSITIONING IN THE MARKET CURRENT PLACEMENT COMMUNICATION & PROMOTIONAL ACTIVITIES CURRENT TARGET CUSTOMER OMNI-CHANNEL AUDIT NEW STRATEGIC INITIATIVE CONCLUSION CITATIONS
06
Founders Joseph and Lyman Bloomingdale completely innovated the original concept of the American department store, turning it into something bigger and better. The revolutionary idea was to sell a variety of women’s fashions behind one facade. They chose to set up a buying office in Paris, as the brothers recognized America’s growing fondness for imported European goods. Bloomingdale’s’ first international collection focused on the “beautiful people” of American society. This collection became the essence of Bloomingdale’s on a global scale and has remained with the company since.
OVERVIEW HISTORY
1872: Bloomingdale Brothers Great East Side Bazaar opened on 56th Street and Third Avenue. 1929: Bloomingdale’s had expanded to cover an entire city block and was completely redesigned to be a single cohesive store by architects Starret and Van Vleck in the Art Deco Style. 1949: opened first branch store in the Fresh Meadows section of Queens. Over 25,000 people passed through the store on opening day. 1970’s saw cutting edge debuts of fashion designers featured at Bloomingdale’s, with celebrities shopping at the 59th St and Lexington Ave location. 2010: Bloomingdales opened a location in Dubai, operating under license agreements with AL Taylor Group LLC. 2017: Bloomingdale’s currently operates 31 stores in NY, NJ, MA, PA, MD, VA, IL, MI, FL, CA, NV, GA. They also opened a location in Kuwait under another license aggreement with AL Taylor Group LLC. Over a dozen Bloomingdale Outlets operate in the United States.
OVERVIEW MISSION STATEMENT
Bloomingdale’s is committed to once again lead the way with exclusive merchandise, customized services, and alternative shopping venues. Carrying on the Bloomingdale’s brothers’ dream, we’re always finding ways to set our stores apart. That’s both the legacy and the promise of Bloomingdale’s.
10
Bloomingdale’s Inc is a private company, operating as a subsidiary of Macy’s Inc. Also under Macy’s Inc are retailers Macy’s and their newest acquisition Bluemercury.
OVERVIEW OWNERSHIP STRUCTURE
TONY SPRING- CEO of Bloomingdale’s Tony Spring became chairman & chief executive officer of Bloomingdale’s in 2014. He is currently responsible for all facets of the Bloomingdale’s brand including merchandising, marketing, operations, stores, and online. The hands-on CEO has worked with the store for 27 years, beginning as a trainee, advancing as a home buyer, and eventually taking on various top marketing, stores, and operations jobs.
14
2016 REVENUE: Estimated $1,626.999 billion Net sales decreased $1,301 million or 4.8% compared to 2015 2015 REVENUE: Estimated $1,207.333 billion Net sales decreased $1,026 million or 3.7% compared to 2014
OVERVIEW REVENUE
OVERVIEW
FUTURE GROWTH PLAN
FUTURE GROWTH PLAN: The current plan is to focus on growth & relationships between the store and its designers/ customers. Future Bloomingdale’s stores aim to mix more brands and have technology more involved in the shopping process. This includes opening “smart fitting rooms” that are equipped with iPads so customers can call for employees for assistance in sizing, read product reviews, etc.
OVERVIEW SWOT ANALYSIS
S
W
Distribution centers Domestic market Customer loyalty Strong omni-channel presence Brand heritage Social media aesthetic
Competitive marketplace Lack of innovation (App) Small international presence Social media not promoted
International market Acquisitions Technological advancements Increase brand awareness Target younger generations using social media
Rising cost of raw goods Cash flow Struggle of brick-and-mortar locations in US Competitive department store market
O
T
20
Global department store sales are expected to reach upwards of $800 billion by 2018, and the majority of those sales come from developing economies. The apparel industry accounts for 55% of retail sales in the US, while cosmetics and footwear account for 20%. The US department store industry includes about 20 companies that operate an estimated 3,250 stores with a combined annual revenue of $55 billion. Department stores differ from discount department stores, such as Wal-Mart and Target, in that most department stores have checkout registers within individual merchandise departments rather than a central checkout area.
MARKET OVERVIEW
22
BLOOMINGDALE’S Company Type: Subsidiary - Private Revenue: 1.6B Percentage in store vs online: 18% online sales Number of locations: 38, 17 outlet US; 2 locations in Dubai and Kawait under AL Taylor Group Apparel product price range: $6 (underwear) to $12K (coat) Offered programs: Credit card, loyal-list program
CURRENT POSITIONING IN MARKE
ET
SAKS FIFTH AVENUE Company Type: Subsidary Revenue: 2.4B 2013 Percentage In store vs online: 12.7% online sales Number of locations: 39 US, 6 international Apparel product price range: $4 (jacket patch) to $33K (fur coat) Offered programs: look-books, #sakstylehub, bridal salon, fur salon, saks first credit card
BERGDORF GOODMAN Company Type: Subsidiary (parent is Neiman Marcus) Revenue: 600M 2012 Percentage In store vs online: 10% online sales Number of locations: 2 US Apparel product price range: $7 (underwear) to $67K (mink coat) Offered programs: credit card, incircle, BG magazine, BG books and film, restaurants, bridal salon, styling, fur storage
NEIMAN MARCUS Company Type: Private Revenue: 4.95B 2016 Percentage In store vs online: 25% online sales Number of locations: 42 US Apparel product price range: $8 (underwear) to $87K (fur coat) Offered programs: NM Credit Card, Magazine, Rewards System, Social Media Influencers Program, Gift Registry & myNM
BARNEY’S NEW YORK Company Type: Private Revenue: $233.143M Percentage In store vs online: 25% online sales Number of locations: 24 US, 12 in Japan licensed through a third party Apparel product price range: $46 (underwear) to $25K (mink coat) Offered programs: credit card, personal shopping, gift registry, restaurant named “Freds”
NORDSTROM Company Type: Public Revenue: $14.4B 2015 Percentage in store vs online: 10.9% online sales (excluding Nordstrom rack/Haute look, which all total accounts for 25% of the company’s sales) Number of locations: 117 US; 5 Canada; 1 Puerto Rico Apparel product price range: $3 (socks) to $12K (bridal) Offered programs: rewards program, credit card, alterations/tailoring, stylists, spa, restaurants
BELK Company Type: Private Revenue: 4B 2014 Percentage In store vs online: online sales increased by 43% since 2015 Number of locations: 293 US Apparel product price range: $3 (underwear) to $748 (coat) Offered programs: credit card, rewards card, catalogues, registry
LORD & TAYLOR Company Type: Subsidiary Revenue: 1,403.4M 2015 Percentage In store vs online: 11.3% online sales Number of locations: 4 outlets, 50 US Apparel product price range: $3 (underwear) to $3K (silk coat) Offered programs: credit card, personal shopper, store events
VON MAUR Company Type: Private Revenue: 620M Percentage In store vs online: online sales have tripled in the past year, competing with their in store sales Number of locations: 32 US Apparel product price range: $4 (headband) to $700 (parka) Offered programs: email alerts
DILLARD’S Company Type: Public Revenue: 6.7B 2016 Percentage In store vs online: 5% online sales Number of locations: 294 US Apparel product price range: $6 (top) to $2K (coat) Offered programs: credit card, registry
MACY’S Company Type: Subsidiary Revenue: Percentage In store vs online: 18% online sales Number of locations: 728 US Apparel product price range: $3 (underwear) to $7K (mink coat) Offered programs: credit card, personal shopper, catalogs, macy’s backstage
28
We selected Nordstrom as Bloomingdale’s top competitor after analyzing these 10 companies. They are very similar as department store retailers but Nordstrom has a more innovative approach in comparison to Bloomingdale’s.
CURRENT PLACEMENT
As of 2017, Bloomingdale’s operates 31 department stores and 16 outlet locations, these being direct-to-consumer sales. Two foreign locations were opened; one in Dubai as of 2010, and one in Kuwait as of 2017, also direct-to-consumer. In 2018, the company plans on opening a location in Abu Dhabi, United Arab Emirates under AL Taylor LLC as well. These sales make up 16% of total revenue for Macy’s Inc, Bloomingdale’s parent company.
Macy’s Inc operates 24 distribution/fulfillment centers nationally (including distribution for Bloomingdale’s). These centers are located in Connecticut, Florida, Texas, Washington, Hawaii, and more. Macy’s Inc. employs a total of 148,300 regular and part-time employees in these centers alone.
In 2015, Macy’s Inc. started an initiative for Bloomingdale’s called the V2C (vendor direct-toconsumer program), where consumers are sent items that are not available in-store but are online specific, and vice versa. The ability to make purchases through POS systems utlizing every possible channel including in-store, kiosks, mobile device, and online makes for a greater omnichannel presence. This initiative also enhances efficiency and mutual benefits overall.
Bloomingdale’s uses FedEx, UPS, USPS, and Deliv™ as their carrier services. They offer standard shipping, which processes within two days, as well as express shipping, which can be shipped by the next business day if the order is placed before 5pm the day of purchase. The company states that items come from multiple distribution locations, so items may arrive separately. The customer will not be charged for these separate deliveries.
34
Macy’s Inc. advertising allowances were 1,173M for 2015. Bloomingdale’s advertises through their own catalogue, on social media (and youtube videos), commercials (although none recently), interest-based online ads (such as side popups on websites like facebook through the use of cookies), in store events that allow their customers a first look at new designer products while sipping on champagne and socializing, and through products being featured in popular magazines.
COMMUNICATION & PROMOTIONAL
L ACTIVITIES
As for CRM activities, Bloomingdale’s offers a training program for their employees called “b-connected,” which promotes relationship selling, rather than transactional selling. Through this, the employees collect data on the clients, building a profile that can help them understand their spending and interests. Bloomingdale’s provides a loyalty program for their customers to receive points after purchases, leading to offers such as “$25 rewards for every 5,000 points,” “perk of the month,” “power points during exclusive events,” and free shipping with no minimum purchase required. This loyalty program also goes hand-in-hand with their Bloomingdale’s American Express Credit Card, where you recieve extra points when making purchases with this card and other exclusive cardholder offers (free local delivery and traveling services).
The company engages with their customers regularly through social media platforms, such as: Instagram: 744K Facebook: 561K Twitter: 396K Pinterest: 138K YouTube: 186K
The company also created a Snapchat account to connect with their younger consumers. In addition to social media, they utilize basic company connections, such as email blasts, their mobile application, gift registry, and impeccable 24/7 customer service contact through phone and chat services.
CURRENT TARGET CUSTOMER
DEMOGRAPHICS: 50% Male & Female Ages of 26-44 are prime (less in ages 45+) Income of $75K - 150K+ LIFESTYLE SEGMENTATIONS: Self-fulfillment is important to their shoppers. They enjoy late night shows such as The Daily Show & Jimmy Kimmel Live. Instagram is their favorite social media platform. Customers read Glamour and Entertainment Weekly. Constantly striving to live their lives to the fullest. Always searching for unique & best-looking products. Purchases because they can redeem rewards in store. Most likely to shop online & make impulse purchases.
40 LIFESTYLE: Natalie was born and raised in Potomac, Maryland by two successful parents that work in the medical field. Her youth was spent diving into extracurricular activities at her private school, and shopping with her mother on the weekends. With her mother’s great taste at heart, Natalie always wanted to pursue a career in the fashion industry, but her father persuaded her otherwise. Although reluctant at first to attend law school, Natalie found a love for family, law, and Philadelphia, where she decided to stay after receiving her master’s degree. A decent sized sunny apartment right outside of the heart of Philadelphia is all she needed to be satisfied. She enjoys the middle ground of the East Coast because of the variety of seasons. She is single, and maintains her love for fashion by spending most of her free time shopping. Self-indulgence is something that she enjoys as a treat after dealing with client issues all week long, doing things like watching Netflix and reading entertainment/fashion magazines in the bath tub. Her bubbly personality makes it easy for her to socialize and make friends. She loves to take aesthetically pleasing pictures at cute places in Philly for her Instagram page, meaning that she needs to have chic outfits at all times. Bloomingdale's is her go to because it’s what she grew up shopping, and they carry some of her favorite brands such as Kate Spade New York (for accessories), Calvin Klein (her choice of undergarments), Dolce Vita (shoes), and her beloved apparel brands such as Ralph Lauren, Alice and Olivia, and Ella Moss. She also loves their friendly customer service and all of her loyalty card perks, eventually leading her to apply for a Bloomingdale's American Express credit card to redeem points, which are still important to her as she is still advancing in her career/income.
NATALIE VICKERS
AGE: 28 EDUCATION: University of Pennsylvania, LL.M in Family Law OCCUPATION: New Family Lawyer at a successful firm INCOME: $76K LOCATION: Philadelphia, Pennsylvania
42
LIFESTYLE: Brett was raised in Bridgeport, Connecticut by middle-class parents. He had a rich aunt growing up that loved to spoil him with sharp clothes from Bloomingdales, planting the see for his love of fashion in years to come. Although Brett enjoyed the creativeness of fashion, his brain operates in a more analytical sense, leading him to pursue Marketing. A family trip to California while in high school proved to be life changing for him, as he realized that the West Coast was where he belonged. While at Santa Clara University, Brett met his future wife Emmy, who was also pursuing a degree in the marketing field. The two wed right out of college (after pursuing their master’s degrees, of course), and Emmy influenced him to pursue a job within the fashion industry, as he had much more taste and potential than she did. After a few years of working for small fashion brands, Brett landed a job working for GUESS?. At 33, he and Emmy welcomed their child Harrison. The birth of their child softened up Brett’s methodical personality. The couple is happy as a family of three, and Brett completely spoils his son. When he’s not at Harrison’s beck and call, Brett enjoys to go out with fellow couples in downtown Los Angeles. His friends are much more into the social media scene, eventually convincing him to join Instagram, and he likes to use the app to document his son’s outfits. Brett still enjoys shopping at Bloomingdale’s, as he just got a job promotion and need to look well put together, yet fashionable. He loves the variety at Bloomingdale’s. Shopping there provides him with the ability to change up his look often and keep up to date with hip-dad trends.
AGE: 41 EDUCATION: Santa Clara University, M.A. in Marketing & Management OCCUPATION: Marketing Director for GUESS? INCOME: $122,000 LOCATION: Los Angeles, California
BRETT CLIFTON
44
OMNI-CHANNEL AUDIT
Bloomingdale’s has a very cohesive brand image regarding their online presence and mobile application. These two forms of omni-channel marketing provide customers with an almost identical experience.
46
NEW STRATEGIC INITIATIVE
Our key objective for Bloomingdale’s new strategic initiative is to focus on updating their website and mobile app to better reflect their social media aesthetic, while also curating a customized experience across these platforms. This will help customers to sort through the broad product assortment when browsing. Overall, this objective will lead to an increase in sales and create the ultimate, cohesive omni-channel experience across the Bloomingdale’s brand.
48
A personalized shopping experience is becoming increasingly popular in today’s culture. Department stores such as Nordstrom employ personal stylists to bring this experience to life. If Bloomingdale’s utilizes the trend of technology to enable a customized experience, the company will be one step ahead of other retailers. Another trend that is currently impacting fashion is the increase of younger customer demographics including Generation Z and the Millennial Generation. These customers expect retailers to provide new experiences using technology. Long term benefits from this initiative will be an increase in customer loyalty and customer following across all media platforms. This will eventually lead to a stronger brand presence at an international scale, and possible expansion.
CONCLUSION
Bloomingdale’s is very strong and cohesive as a department store through their omni-channel marketing. However, the brand has an opportunity to become more innovative. This will give Bloomingdale’s a competitive advantage and help bridge the gap between their current marketing and the latest technological innovations.
52
“BLOOMINGDALE.” BLOOMINGDALE’S, INC. | Revenue and Financial Reports - D&B Hoovers, www. hoovers.com/company-information/cs/revenue-financial. bloomingdales_inc.28b4701ee70ace17.html. “The Bloomingdale Brothers.” History TV, www.history. co.uk/biographies/the-bloomingdale-brothers. “Bloomingdale’s | About Us.” Our History — About Us | Bloomingdales, www.bloomingdales.com/b/about-us/ history/. “Bloomingdale’s - Macy’s, Inc.” Macy’s, Inc., www. macysinc.com/bloomingdales/. “Department Stores Industry Profile.” Department Stores Industry Profile from First Research, www.firstresearch. com/industry-research/Department-Stores.html. “Department Stores Market Research Reports & Industry Analysis.” Market Research, www.marketresearch.com/ Consumer-Goods-c1596/Consumer-Goods-Retailing-c80/ Department-Stores-c657/. “Hudson’s Bay Co. | Lord & Taylor.” EMarketer Retail, retail-index.emarketer.com/company/data/54a3012c059 6151820f93060/54a3017e0596151820f93390/lfy/false/ hudsons-bay-co-lord-taylor. “Macy’s, Inc. Evolves with Changing Customer Landscape, Invests for Continued Sales Growth.”
Business Wire, 8 Jan. 2015, www.businesswire.com/ news/home/20150108006314/en/Macy%E2%80%99sEvolves-Changing-Customer-Landscape-InvestsContinued. “Neiman Marcus Group LTD LLC Reports Fourth Quarter and Fiscal Year 2017 Results.” Business Wire, 10 Oct. 2017, www.businesswire.com/news/ home/20171010005225/en/Neiman-Marcus-Group-LLCReports-Fourth-Quarter. “Neiman Marcus Top Navigation.” Neiman Marcus, Neiman Marcus, www. neimanmarcus.com/Designers/cat000730/c. cat?siloId=cat000730&navid=topNavDesigners. “Our Customer Service.” Bloomingdale’s, Bloomingdale’s INC., www.customerservice-bloomingdales.com/app/ answers/detail/a_id/1612/~/general-shipping-information. Staff and Bloomberg report | May 12, 2017, et al. “E-Commerce Generates Almost 25% of Nordstrom’s Sales in Q1.” Digital Commerce 360, 12 May 2017, www. digitalcommerce360.com/2017/05/12/e-commercegenerates-almost-25-nordstroms-sales/. theBIZNOB. “New Bloomingdale’s CEO, Tony Spring, Outlines Future Plans.” THE BIZNOB - Global Business & Financial News, 11 Aug. 2014, www.biznob.com/newbloomingdales-ceo-outlines-future/.
CITATIONS
BLOOMINGDALE’SLIKE NO OTHER STORE IN THE WORLD.
FASM 415 OMNI-CHANNEL FINAL PROJECT PROFESSOR MARY ALONSO LAUREN MORGAN & JENNA HEPP