Macy’s Looks To Differentiate With Eateries

Jul 14, 2004
George Anderson

By George Anderson

Differentiation may be the most overused term and infrequently practiced strategy in retailing today but it remains the mantra for legions of executives in the business.

Chief executives of mall-based department stores have been among the most vocal proponents of developing points of difference as they seek any advantage in their competition
for customers with discount and specialty stores.

The chief of Federated Department stores, Terry Lundgren, which operates Macy’s and Bloomingdale’s, thinks the chain has found one way of setting his businesses apart — a wide
selection of in-store dining options spread around the store.

Currently Macy’s has licensing agreements with Starbucks, McDonald’s and numerous other food vendors.

The decision to sprinkle food stops around the store came out of Macy’s consumer research, said Tom Cole, the vice chairman of Federated. Mr. Cole told The Wall Street Journal,
shoppers at Macy’s wanted places within the store where they could “rest and refresh, quickly.”

Moderator’s Comment: What are your thoughts on Federated’s placing eateries such as Starbucks, Cosi and McDonald’s
around the store to help its shoppers “rest and refresh, quickly?” Do you see this as a sustainable point of difference with Macy’s competitors?

Having foodservice in stores is nothing new, although Macy’s placing the centers around the store is different than what most others do.

We also, as the WSJ piece reported, would not be overly concerned about the mess shoppers make spilling drinks and food as they shop. If the food and drink
keeps them shopping, then the stores will be able to afford any clean-up expenses.

We would suggest, however, that Macy’s provide shoppers with carts that have cupholders. It’s tough trying to balance a hot coffee and pull items from your
cart at the same time as our recent spill at a checkout at Wegman’s in Woodbridge, NJ recently made clear to us.

George Anderson – Moderator

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