Group Project
AGENDA
Company Background Current Situation Objective—Hypothesis Methodology Industry Consumer Brand Challenges vs. Strengths Positioning Intersections Strategic Recommendation
BACKGROUND
HISTORY
1864 2017
Macy’s invented “window shopping,” by installing illuminated lights into their vitrines.
Macy’s merged with Federated Department Stores.
1994
1924
The entire company changed to its new name: Macy’s Inc.
2007
Terry Lundgren was replaced by Jeff Gennette, Macy’s new CEO. 100 more stores will close in the next few years.
Macy’s Herald Square location becomes the largest store in the world, Also, 10,000 people watch Macy’s first parade, now known as Macy’s Thanksgiving Day Parade.
2015 1858 Rowland H. Macy opens R.H. Macy & Co. as a dry goods store in New York City. First-day sales totaled $11.06.
Macy’s CEO, Terry Lundgren closed 14 stores in 2015, and closed another 40 under performing stores in 2016.
CURRENT STATE
Stock price source: yahoo finance Sales revenue source:2015 Annual Report, Macy’s Inc.
OBJECTIVE
INCREASE SALES REVENUE
HYPOTHESIS
Unclear brand image
Category + Challenges
Loss of Sales Revenue and Relevance
METHODOLOGY
Quantitative
Qualitative Participants
3 Female/ 3 Male
Sample
507 | Male & Female | Age 18+
Ages
26 - 47 years old
Respondents
507 | 49% Male 51% Female
Location
New York City
24.7 % 18-34 year old
Background
Hispanic, Caucasian
33.1 % 34-54 year old 42.2% 55+ year old Confidence Level
The quantitative sample was not representative of the market.
90%
Have shopped at a department store or mass merchant at least once in the past 6 months.
INDUSTRY
COMPETITIVE LANDSCAPE
DEPARTMENT STORES
INDIRECT COMPETITORS
DILLARD’S JC PENNEY KOHL’S NORDSTROM
TARGET WALMART
FAST-FASHION RETAILERS ZARA H&M TOPSHOP FOREVER 21
E-COMMERCE
AMAZON
CATEGORY CHALLENGES
Are there category challenges affecting Macy’s?
CATEGORY CHALLENGES
TOTAL USE DEPARTMENT STORE SALES AND FORECAST (at current prices, 2011-21)
LEARNING: Department stores are having trouble getting their fair share of the PEAK CYCLES
Source: Smith, Diana. “Department Store Retailing - US - September 2016.” Mintel Academic.
CATEGORY CHALLENGES
LEVEL OF SATISFACTION WITH DEPARTMENT STORES 2014 2015
Change
2014
2015
Change
Norstrom 86
82
-5%
JCPenney 86
82
-5%
Dillard’s
81
80
-1%
Macy’s
79
73
-8%
Kohl’s
80
77
-4%
Sears
73
71
-3%
Target
80
75
-6%
Wal-Mart 68
66
-3%
*Score is based on 100-point scale. Source: American Customers Satisfaction Index (ACSI), “ACSI Retail Report 2015”, Feb 23, 2016.
CATEGORY CHALLENGES
SELECT REASONS FOR NOT SHOPPING AT DEPARTMENT STORES (JUNE 2016)
LEARNING: Losing relevance with modern consumers
Base: 391 internet users aged 18+ who have not shopped at a major department store in the past 12 months Source: Lightspeed GMI/Mintel
CATEGORY CHALLENGES
MACY’S BRAND PERCEPTION
LEARNING: Macy’s image as “mall store” affects consumers
Qn 23. When you think about Macy’s, which of the following, if any, come to your mind?
CATEGORY CHALLENGES
APPAREL SALES IN THE US FROM 2004 TO 2016, BY TYPE
Source: Think with Google. Statista 2015
CATEGORY CHALLENGES
US APPAREL SALES: DEPT STORES + PURE PLAY ECOMMERCE
LEARNING: Rise of e-commerce disrupting brick&mortar model in retail
Source: Morgan Stanley Research
CATEGORY CHALLENGES
CONCLUSIONS AND INSIGHTS DEPARTMENT STORE DECLINE
RISE OF E-COMMERCE
CONCLUSIONS
The department store sector is struggling as sales drop across the board.
Online purchasing is a disruptor of traditional in-store sales for department stores
As more traditional retail-models, department stores are struggling to keep up in a fast-paced industry with lots of new emerging technologies.
CONSUMER
CONSUMER
Who is shopping at Macy’s and what is their relationship with the brand?
CONSUMER
IS MACY’S MORE FEMININE OR MASCULINE?
Qn16. Now we’d like you to think about the following stores as if they were people you know. Based on what you have seen and heard about these “people”, please indicate which of these “people” are described by each attribute. Again, you can select none, one, some, or all of the stores for each attribute.
CONSUMER
IS MACY’S MORE FEMININE OR MASCULINE?
“Acts more like a man”
3%
“Acts more like a woman”
22%*
*highest percentage out of all surveyed stores
Qn16. Now we’d like you to think about the following stores as if they were people you know. Based on what you have seen and heard about these “people”, please indicate which of these “people” are described by each attribute. Again, you can select none, one, some, or all of the stores for each attribute.
CONSUMER
MACY’S IS FIRST CHOICE STORE FOR….
FRAGRANCES
WOMEN’S ACCESSORIES
WOMEN’S SHOES
JEWELRY
WOMEN’S CLOTHING
1st: Macy’s - 34%
1st: Macy’s - 23%
1st: Macy’s - 23%
1st: Macy’s - 29%
1st: Macy’s - 25%
2nd: Amazon - 15%
2nd: Kohl’s - 17%
2nd: Kohl’s - 17%
2nd: Amazon - 16%
2nd: Kohl’s - 19%
Difference: 19%
Difference: 6%
Difference: 6%
Difference: 13%
Difference: 6%
Qn10. For each of the following type of products below, which store would you likely go to first to shop for that product, online or offline. Overall score shown.
CONSUMER
Macy’s is closely linked to women’s products and femininity
CONSUMER
WHO SPENDS MORE ON CLOTHING?
LEARNING: In general, women spend more money on clothing than men
Qn1. Please indicate your gender. Qn8. Approximately how much have you spent on clothing, for yourself, in the past six months?
CONSUMER
WHO SHOPS MORE AT MACY’S?
LEARNING: More women shop at Macy’s compared to men both online and offline
Qn6. At which of the following stores, if any, have you ever shopped, online or offline? Qn7. At which of the following stores, if any, have you shopped in the past 6 months, online or offline?
CONSUMER
WHAT AGE GROUP SPENDS MORE ON CLOTHING?
LEARNING: The 25-54 age group spends considerably more on clothing than 55+
Qn2. Which of the following describes your age and how much you spent on clothing in the past six months? Qn8. Approximately how much have you spent on clothing, for yourself, in the past six months?
CONSUMER
WHAT AGE GROUP SHOPS THE MOST AT MACY’S?
LEARNING: The 25-54 age group has shopped most at Macy’s— online and offline
Qn2. Which of the following describes your age?
Qn6. At which of the following stores, if any, have you ever shopped, online or offline? Qn7. At which of the following stores, if any, have you shopped in the past 6 months, online or offline?
CONSUMER
AGE DISTRIBUTION BETWEEN MACY’S SHOPPERS AND US POPULATION
LEARNING: The 25-54 age group preferentially shops at Macy's compared to other age groups
Q2. Which of the following describes your age? US Population Source: U.S. Census Bureau. Annual estimates of the resident population by single year of age and sex for the United States: April 1, 2010 to July 1, 2016. Used 2016 estimated population
CONSUMER
WHERE IS MACY’S ACCESSIBLE?
LEARNING: Macy’s stores are more accessible in urban and suburb areas
Qn5. Which of the following stores, if any, are located within a reasonable distance from your home or work?
CONSUMER
WHAT INCOME BRACKET SHOPS THE MOST AT MACY’S?
LEARNING: People with household income of $100K+ are the biggest shoppers at Macy’s
Qn 38.Which of the following best describes your household’s total annual income before taxes?
CONSUMER
INCOME DISTRIBUTION BETWEEN MACY’S SHOPPERS AND US POPULATION
LEARNING: People with a household income of $100K+ preferentially shop at Macy's compared to other income groups
Qn6: And at which of the following stores, if any, have you ever shopped, online or offline? *US Population source: U.S. Census Bureau, Current Population Survey, 2016 Annual Social and Economic Supplement. Selected Characteristics of Households, by Total Money Income in 2015.
TARGET AUDIENCE
Demographics: Women Aged 25 - 54 years old Household income $100K+
Geographics: Urban and Suburb
BRAND CHALLENGES
BRAND CHALLENGES
So, how are consumers reacting to Macy’s?
BRAND CHALLENGES
LAPSED USERS: BY GEOGRAPHY
LEARNING: Across all areas (urban or rural) people are shopping less often than they did a few years ago
Qn 12. For each of the stores below, please tell us if you’ve been shopping there more, less, or about as much as you did a few years ago. (Macy’s)
BRAND CHALLENGES
LAPSED USERS: BY INCOME
LEARNING: Across all incomes, people are shopping less often at Macy’s than they did a few years ago
Qn12. For each of the stores below, please tell us if you’ve been shopping there more, less, or about as much as you did a few years ago. (Macy’s)
BRAND CHALLENGES
LAPSED USERS: BY AGE
LEARNING: Across all ages, people are shopping less often at Macy’s than they did a few years ago
Qn12. For each of the stores below, please tell us if you’ve been shopping there more, less, or about as much as you did a few years ago. (Macy’s)
BRAND CHALLENGES
LAPSED USERS: BY GENDER
LEARNING: Both genders are shopping less at Macy’s than they did a few years ago
Qn 12. For each of the stores below, please tell us if you’ve been shopping there more, less, or about as much as you did a few years ago. (Macy’s)
BRAND CHALLENGES
DECLINING LOYALTY: BY GEOGRAPHY
LEARNING: Across all geographic areas, people’s relationship with Macy’s has grown apart.
Qn27. Would you say that over your life, your relationship with this the Macy’s “person” has become closer, or have you grown apart?
BRAND CHALLENGES
DECLINING LOYALTY: BY INCOME
LEARNING: Across all incomes, people’s relationship with Macy’s has grown apart.
Qn27. And would you say that over your life, your relationship with this the Macy’s “person” has become closer, or have you grown apart?
BRAND CHALLENGES
DECLINING LOYALTY: BY AGE
LEARNING: Across all age groups, people’s relationship with Macy’s has grown apart.
Qn27. And would you say that over your life, your relationship with this the Macy’s “person” has become closer, or have you grown apart?
BRAND CHALLENGES
DECLINING LOYALTY: BY GENDER
LEARNING: Both genders’ relationship with Macy’s has grown apart.
Qn27. And would you say that over your life, your relationship with this the Macy’s “person” has become closer, or have you grown apart?
BRAND CHALLENGES
Why is consumer’s loyalty declining?
BRAND CHALLENGES
BEST THING ABOUT MACY’S
BRAND CHALLENGES
WORST THING ABOUT MACY’S
BRAND CHALLENGES
PERSONIFICATION
“My aunt or my grandmother”
“Old lady”
“Bob Hope”
“Cadillac”
“Old school”
OUTDATED
FGD Qn: Imagine for a moment that Macy’s is a person that you know. As if the Macy’s brand came to life as a real person. What is she like?
BRAND CHALLENGES
PERSONIFICATION
“boring”
“kind of old-fashioned”
“Haven’t really caught up with modern trends”
“Accountant”
“Nothing”
BORING Qn 20: Please write down the one thing you think of most when you think of Macy’s? Qn 21: What is the worst thing about Macy’s?
BRAND CHALLENGES
PERSONIFICATION
“Rich old lady”
“Cruella de Vil”
“String of pearls”
“irrelevant”
“Old steakhouse”
RICH AND OUT OF TOUCH
FGD Qn: Imagine for a moment that Macy’s is a person that you know. As if the Macy’s brand came to life as a real person. What is she like?
BRAND CHALLENGES
CHALLENGES
BRAND CHALLENGES
CONCLUSIONS AND INSIGHTS INDUSTRY PROBLEMS
Department stores are struggling with the rise of e-commerce and fast fashion. Macy’s is no exception.
BRAND PROBLEMS CONCLUSIONS Lapsed users and declining loyalty Contradictions and tensions surrounding brand image
Because of its iconic status, Macy’s has become used to broadcasting to the consumer instead of understanding them, and it has led to alienation and the distinctly different perceptions of Macy’s
BRAND STRENGTHS
STRENGTHS
Does Macy’s have any strengths it can leverage?
STRENGTHS
Strong Brand Awareness
Good Quality / Premiumness Variety Holiday Spirit / Family Concept
STRENGTHS
TOP OF MIND DEPARTMENT STORE
LEARNING: Strong brand awareness is a reflection of Macy’s iconic status. When you think of department stores, you think Macy’s.
Q4. When you think of department stores, which ones come to your mind first?
STRENGTHS
QUALITY & PREMIUM PRODUCTS
Q14. For each of the stores listed below, please indicate which stores, if any, each statement describes. Responses to statement: “They have quality products.”
STRENGTHS
SELECTION AND VARIETY
Variety
Q22. What is the best thing about Macy’s?
STRENGTHS
GOOD FOR GIFTING -
Macy’s has premium, quality products
-
Macy’s has a huge variety of offerings
-
Macy’s is the destination for shoppers to look for a gift or a shopping indulgence.
-
Macy’s is someone they would take fashion advice from.
LEARNING: Macy’s is an ideal place to shop for gifts.
FGD Qn: What does Macy’s do better than the others – how is it leading the way?
MACY’S ASSOCIATION WITH HOLIDAYS IS STRONG AND UNIQUE AMONG DEPARTMENT STORES FGD Qn. Everyone, close your eyes for a minute and imagine you are walking into a Macy’s. Imagine in your mind what you smell, what you hear, what you feel. Stay there for a second. Tell me another place in your life that feels similar to what you’re feeling now? Why?
STRENGTHS
HOLIDAY ASSOCIATIONS OPEN ENDS: “ I always think of the holidays when I think of Macy’s, so that is appealing.” “ Macy's is a great place to shop for the entire family.”
Holiday Spirit
Q23. When you think about Macy’s, which of the following, if any, come to your mind?
STRENGTHS
HOLIDAY ASSOCIATIONS
Q20: Please write down the one thing you think of most when you think of Macy’s?
STRENGTHS
MESSAGING CONCEPTS
It’s really simple: when you look good, you feel good. And when you feel good, you know you can be and do anything. Macy’s thinks about this every day. Because we know that when you shop at Macy’s, something inside you changes. You realize all the possibilities of what you can be. You feel better, you feel more confident, you feel ready to take on the world.
Department stores come and department stores go, but few have been around as long as Macy’s. Why? Because Macy’s has always been a part of the fabric of your life, a special slice of America for generations; from special sales, to the annual Thanksgiving Day Parade, to that special spirit you get when we dress up our stores for the Christmas holidays. Macy’s – always a part of your life.
Macy’s is more than just a department store. From Mother’s Day and Father’s Day, to the 4th of July, to Thanksgiving, to Christmas, Macy’s is about celebrating the holidays that matter. And Macy’s knows that holidays are about more than just shopping and sales, which is why Macy’s goes out their way to help celebrate those holidays. Why? Because like you, we know that holidays are really about family. And we want to help you make those special family times even more special. From our family to yours. Macy’s.
STRENGTHS
HOLIDAY ASSOCIATIONS
LEARNING: Association with family and holiday scored much higher across the board.
Q31,32,33. How does having read this affect your interest in Macy’s.(Iconic store concept, Transformation concept and Family concept)
BRAND STRENGTHS
CONCLUSIONS STRONG BRAND AWARENESS VALUABLE BRAND CONCLUSIONS
EQUITIES
Macy’s is the epitome of “department store.” It doesn’t have to remind consumers about themselves.
Macy’s has strong associations with very favorable things like quality, holidays, etc. They are waiting to be tapped.
Macy’s needs to communicate its brand equities instead of its sales cycles to forge an emotional connection with the consumer again.
CHALLENGES
STRENGTHS
CATEGORY DECLINE
BRAND LOYALTY
HOLIDAY TIES
QUALITY
UNCLEAR BRAND IMAGE
SALES VS EXPENSIVE TENSION
TOP OF MIND DEPARTMENT STORE
WIDE SELECTION OF PRODUCTS
POSITIONING
TRENDY
BADGE VALUE
VALUE
TRADITIONAL
STRATEGIC RECOMMENDATION
CONSUMER
BRAND
CATEGORY
BRAND ASSOCIATION
Believe
dream
STAR
Holidays
Aspirational CONNECTION
discovery
nostalgia
PREMIUM
magic
FAMILY TRADITION
Q u a l i t y
CELEBRATE ___________.
CAMPAIGN
Q & A