Macy’s Looks to Reward Loyal Customers

Discussion
Jul 17, 2006

By George Anderson


When Federated Department Stores makes the final switch from the Marshall Field’s banner to Macy’s, it is safe (and understated) to say many of Field’s most loyal customers will not be automatically transferring that emotional connection to the new retailer.


Macy’s management is aware of the challenges it faces, particularly in Field’s hometown of Chicago, and is looking to for ways to make it attractive to the very same consumers who are most disappointed to see their favorite department store fade into history.


One way the department store chain is looking to speed the conversion of Field’s customers to Macy’s is by rolling out a rewards program the chain says will provide greater perks to shoppers at lower levels of spending.


Jennifer McNamara, a Macy’s spokesperson told the Pioneer Press, Macy’s customers can achieve platinum Star Rewards program status by spending $1,000 in a year. Field’s Regards program required shoppers to spend $2,000 to achieve the same reward levels.


Mollie Young, a principal at Nametag International, said the Star Rewards program is one step in the right direction for Macy’s.


“In the transition strategy of Marshall Field’s to Macy’s, it is imperative they take every opportunity to connect with the existing core customers and not lose them,’ she said.


Discussion Questions: What must Macy’s do (such as the Star Rewards program) to retain existing customers at stores it is converting from other banners,
such as Marshall Field’s? Will steps such as the Macy’s Star Rewards program aid the chain in at least getting some loyal Field’s customers to give it a look?

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18 Comments on "Macy’s Looks to Reward Loyal Customers"

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Craig Sundstrom
Guest
11 years 5 months ago

13 responses so far, the least negative of which include a self-described “Macy’s loyalist” who admits that she “walk(s) out fairly empty handed every time” and an optimist who thinks it will work, although it’s a strategy that L&T already tried – only with nicer stores and better merchandise – and abandoned…:HMM?!?!

FEDERATED REPENT !

Camille P. Schuster, PhD.
Guest
11 years 5 months ago

The Macy’s name has great resonance with the American public as that famous New York department store. That sentiment doesn’t elicit local loyalty. It does elicit curiosity and people will go to the “new” Macy’s store in their location to see what it has offer. However, the local store executions do not often create a compelling case for local customers. If the discounts are high enough, if the loyalty rewards are large enough consumers can be bribed to come into the store and “cherry pick” items. However, that is not loyalty. Until Federated takes the time to learn and understand local consumers, provide desired products at appropriate prices, and create programs that actually develop loyalty rather than cherry picking, the entrance into the Chicago market is not likely to generate the results they are seeking.

Michael Tesler
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Michael Tesler
11 years 5 months ago
I do not think long run success in Illinois depends on what Macy’s does or doesn’t do in the next six months and there are two separate issues involved not just in Chicago but in every major market area in the country; One is that our downtowns and suburban shopping areas and stores are becoming generic and we emotionally long for the unique distinctions that used to help make each one of our home cities special…we are fighting and losing this battle, the other is that departments store stink…lousy service, too much inventory, too little help, no fun, all carry the same brands, BORING, and a thousand other well documented flaws that have contributed to their steady loss of market share over the last twenty years. This is and was a Marshall Field’s, Filene’s, Burdine’s, Bullock’s, et al issue as well as Macy’s but now the solution; the the need for a reinvention of the department store is all on Macy’s. This isn’t about cute little promotions and ads, it is about a complete makeover… Read more »
Joseph Peter
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Joseph Peter
11 years 5 months ago
Federated has already irked tons of Chicagoans and unimpressed many by its sarcastic and unsympathetic replies to the media in regards to the Marshall Field’s to Macy’s conversion. Federated can bribe customers, no longer “Guests” as what Dayton Hudson called their customers, with Frango cheesecakes, Star Rewards, promises to keep traditions, and community involvement, but the name is still changing to Macy’s and that is what ticks people in the Chicago area off the most. The highest benefit would be for Federated to retain the Marshall Field’s name in the Chicago area. If they did this, they would have immediate success. Federated executives need to overcome their ego and realize that Macy’s is going to be a flop here in Chicago. I know some of you think Charter Club and Alfani are great products, but when you compare those to ties, dress shirts, shoes and anything else with the Marshall Field’s brand name on it, Marshall Field’s products would be what Chicagoans choose. Pressing Alfani, INC and Charter Club on Chicagoans is like Safeway pushing… Read more »
Bernie Slome
Guest
Bernie Slome
11 years 5 months ago

Marshall Field’s had name recognition and loyalty among its customers. What Macy’s is doing with the Star Rewards program is a good beginning. What they really need to do is provide a customer experience that is a touch above what Marshall Field’s used to offer. The right product at the right price with top level customer service. If Macy’s really pays attention to the customers needs and wants, it will have no problem bringing the Marshall Field’s loyal customers into the fold.

Mark Lilien
Guest
11 years 5 months ago

All Macy’s has to do: insert compelling merchandise at reasonable prices. Top-tier retailers don’t need “loyalty programs.” Aeropostale, Abercrombie & Fitch, Target, Lowe’s all have customers who love the merchandise and the store. If the merchandise and the store both aren’t special, a “loyalty program” becomes the support brace for the weakness.

Ian Percy
Guest
11 years 5 months ago
Mark is right on the money. The more stores struggle to create “loyalty” the more convincing the evidence there’s nothing worth being loyal to. Though that sentence construction wouldn’t please Winston Churchill, I hope the point is clear. Most of these incentive programs don’t create loyalty at all since they can be wiped out by someone with a better ‘deal’. That can hardly be called “loyalty.” It seems we assume it’s really the customer who is ‘for sale’. When one beloved brand dies the best thing to do is to celebrate the passing, not pretend it didn’t happen. Mark the occasion! This is not exactly an uplifting metaphor but look at what we do at funerals – we tell stories, reminisce and hopefully even laugh. It’s all an essential part of the transition and the same psychology applies in all types of passage. I suggest Macy’s hold an essay contest (at least in the Chicago area) where people write about why they loved Marshall Field’s so much. Then I’d make those stories part of the… Read more »
Steven Davidson
Guest
Steven Davidson
11 years 5 months ago

What Macy’s needs to do at this point is offer quality merchandise at a reasonable price, and have what customers come to either Macy’s or Field’s for. Customers will not just shop at Macy’s for a loyalty program. This is a moderate-to-high end retailer, and they need to market and operate as such. Stressing so much power on their loyalty program will only make them look like an entry-level to moderate-level retailer. They are above this.

At this particular point in time, Macy’s needs to focus on keeping those Field’s customers happy, and delivering quality service and offering an exceptional product line.

Ryan Mathews
Guest
11 years 5 months ago

I agree with Mark but would add Macy’s might consider talking to its customers rather than attempting to bribe them. If the only thing special about the Macy’s experience is price, they’re in real trouble.

Robert Craycraft
Guest
Robert Craycraft
11 years 5 months ago
This is a hard question to answer because there is no consistent “Macy’s” to compare the converted banners to. In some markets there are converted Sterns and Bamberger’s stores that are, aesthetically, inferior to JC Penney. Other areas, such as Texas, where there are new-builds, the stores are dazzling. The consistency about Macy’s, from my perspective, is poorly kept stores and bad-to-non-existant service. Federated has also stripped out the “joy of shopping” that Macy’s used to have with their restaurants, food departments in The Cellar, cooking demonstrations, store events, etc. There is no reason to think they won’t do the same at Marshall Field’s locations. My crystal ball says the efforts at the State Street store will be an expensive failure, and that within 24 months we will see shuttered downtown locations at former Kaufmann’s, Famous-Barr, and most other May Company brands, as well as Field’s State Street down to three levels or sold completely. I’ve not made a trip to Chicago in 30 years that didn’t include a visit to Marshall Field’s, I wouldn’t… Read more »
Barry Wise
Guest
Barry Wise
11 years 5 months ago

Star Rewards is a good start in Macy’s efforts to gain the loyalty of previous Marshall Field’s customers. However, they must keep in mind that many of Marshall Field’s customers shopped Marshall Field’s for the prestige of being able to say that they owned items from Marshall Field’s. This isn’t any different than some shoppers buying from Nordstrom or Neiman Marcus just for the opportunity to tell others where their latest purchase came from. Macy’s needs to elevate its brand in the minds of the Marshall Field’s shoppers through the introduction new and exclusive brands, and by improving the shopping experience, not just by making their loyalty program more attractive.

Bill Robinson
Guest
Bill Robinson
11 years 5 months ago

Macy’s is correct to pump up the perks for its Marshall Field’s customers. Providing platinum benefits twice as fast will be a lot more profitable than the markdown bath they’ll take as loyal Field shoppers remorse over Marshall Field’s demise.

It will take a couple of seasons before Chicagoans get over it. Marshall Field’s is one of the best and most loved brands in the history of retailing. Federated must write a new chapter in retail marketing to overcome the pushback from loyal Field’s shoppers, most of whom are high spending baby boomers.

Laura Davis-Taylor
Guest
Laura Davis-Taylor
11 years 5 months ago
I’m a Macy’s loyalist. In fact, it’s the only branded credit card I own outside of my American Express. Why? They use my data to reward me with direct mail incentives based on my spending. The coupons are a treat, often as much as 20% on all store products, and they get me to the mall consistently. Most days, I can use them on top of in-store incentives and get 45% off all products! Problem is, the store is where it all breaks down for me. I go to Macy’s looking to buy. I tend to walk out fairly empty handed every time. Reasons: –I’m overwhelmed –I can’t find what I’m looking for –Help is extremely difficult to find –95% of what I try on doesn’t fit –If I need a different size, I look for it myself. If I need an employee to find me a size at a different store, they print out a 2 foot receipt with the stores, their phone numbers and addresses. If I strike gold and find a helpful… Read more »
Karin Miller
Guest
Karin Miller
11 years 5 months ago

Well-done loyalty programs are useful for the retailer, by providing easy access to valuable POS data by customer and the opportunity to keep in the forefront of their customers’ minds through their advertising and direct marketing. Customers appreciate discounts, private sales and special treatment. Macy’s $1000 vs. Marshall-Field’s $2000 threshold will make a difference and allow inclusion for many more customers – if they bite.

Of course all of this needs to be supported by a good shopping experience and the right products.

Overall, I would say that this is a “must-have” for Macy’s, but it is a small piece in the puzzle.

Nicholas Armentano
Guest
Nicholas Armentano
11 years 5 months ago

I think Macy’s will be successful whether it decides to reward customers with perks or not. In many markets it will be the only upscale department store. In the South, it will compete with Dillard’s and Belk, neither of which have the nostalgia and history of Macy’s. Macy’s has nationwide recognition; it has July 4th fireworks and its branded Thanksgiving parade. In an earlier post, someone said the rebranded Macy’s are uneven in appearance and amenities. It is interesting to note that just a few years ago Lord & Taylor was aiming to become a national chain – sans the house wares department – with uniform prototypes that were aesthetically awesome. A decade ago Macy’s was almost bankrupt. I wonder if things had turned out differently we could be looking at a national chain of Lord & Taylor’s rather than Macy’s.

Mark H. Goldstein
Guest
Mark H. Goldstein
11 years 5 months ago

Macy’s needs to do everything possible and having a vibrant loyalty program is simply one of those ‘must do’ things. Loyalty programs are increasingly not a nice to have but a must have in the battle for a shopper’s attention.

The issue mentioned above about ‘me-too’ merchandise is not unique to Macy’s, it’s unique to most every retailer that doesn’t design and control its supply chain. Having a rewards program pushes your shoppers over the top to buy those products that might also be available elsewhere else; of course another way is via deep discounting but…that’s not a game Macy’s is going to win….

Stephan Kouzomis
Guest
Stephan Kouzomis
11 years 4 months ago

Macy’s banner Vs. Marshall Field’s is not about savings in advertising, or how the same name allows for blanket programs throughout all new and old Macy’s divisions.
It’s just poor marketing; mass approach vs. special niche selling – and egos of Macy’s executives getting in the way.

Is it not interesting – Macy’s didn’t make the change during the Holiday season? It knew it would lose shoppers. Sometimes, it is possible to tie the parent company with the local retailer without changing the enormous equity in the name of the local retailer. May we suggest, Marshall Field’s, a Very Devoted Macy’s retailer. Get the thought? Or at least transition in to this position for a year, and then research the MF’s shopper for feedback!

Macy’s has changed local retail institutions in other markets, as well.

Time will tell. But, Macy’s better consider keeping special services, knowledgeable sales associates, and the feel of Marshall Field’s alive…. and Frango mints in Chicago. Or what will we do? Shop elsewhere!

Michael Schmitt
Guest
Michael Schmitt
11 years 4 months ago

Loyalty cannot be created in a vacuum. As a Field’s regards customer, history and sentimentality are as important to me as merchandise and customer service.

With the name change there will be no history and no sentiment. The merchandise and customer service changes during this transition period are not encouraging. As a result, the offer of an “improved” loyalty program rings hallow and doe not grab my interest.

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