Macy’s Takes Hit Over Name Change

Discussion
Jun 07, 2006
George Anderson

By George Anderson


According to a study by Scarborough Research, the number of customers walking into Macy’s stores in the Columbus, Ohio area have declined 4.5 percent since parent company Federated Department Stores put that banner up in place of Lazarus.


Retail analyst James Dion told The Columbus Dispatch that Scarborough’s research might be pointing to a strategic error on the part of Federated.


“I think it’s a huge warning flag,” he said. “The customers are basically saying, ‘We liked our hometown department store. We liked Lazarus. We trusted it.’ “


While many consumers in central Ohio certainly identified with and shopped at Lazarus, the traffic hit that Macy’s has taken was an acceleration of several years of decline.


In 2000, 28.7 percent of adults in the Columbus area said they had visited a Lazarus store. Since the name change to Macy’s last year, 19.8 percent of area adults did the same.


“Normally, you would not expect that level of decline,” said Mr. Dion. “Lazarus absolutely had value as a name, and the customer is saying one size does not fit all.”


Federated spokesman Jim Sluzewski said the company is taking the transition to the Macy’s banner one step at a time. “There’s always concern when we change names because change is difficult. But customers always tell us it’s what’s inside the store that’s important with them.”


Neva Kraatz, a consumer from Reynoldsburg, Ohio says she has noticed differences. “Since the change, I’m finding less brand-name assortments and more private labels at Macy’s. They tend to get more vanilla.” 


Moderator’s Comment: Should the short-term results at former Lazarus locations be a warning to Federated about its
national Macy’s branding strategy? Are stores becoming “more vanilla” under the Macy’s banner?

George Anderson – Moderator

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

39 Comments on "Macy’s Takes Hit Over Name Change"


Sort by:   newest | oldest | most voted
Ryan Mathews
Guest
14 years 8 months ago

In Detroit, we loved Hudson’s. Then Hudson’s became Marshall Field’s. Many older Detroiters still refer to the stores as Hudson’s, which just confuses their children. Now, Marshall Field’s will become Macy’s. I assume some people will still refer to the stores as Hudson’s, some will insist on calling them Marshall Field’s and most will adjust to calling them Macy’s. Will there be gigantic consumer push-back? Not likely unless the name change is accompanied by a change in merchandising and or pricing. Brands are a lot more perishable than branders like to believe.

James Tippett
Guest
James Tippett
14 years 8 months ago

Oooh! Alfani! Macy’s private label! Available anywhere from University Mall in Carbondale to Northwoods Mall in Peoria to State Street in Chicago! None of the arguments I’ve read stating that a national Macy’s name brand is a good thing have convinced me. These department stores are not Wal-Mart, Sears, or JCPenney. And the customer who shops at these higher end department stores are not the same in each city. If Macy’s can truly, truly differentiate the selection and experience in each store for each city, it might work..but I’m not holding my breath.

Odonna Mathews
Guest
Odonna Mathews
14 years 8 months ago

Consumers identify with local companies and names they trust. If it is a name consumers value, why go to the expense of changing it? One size certainly does not fit all. And many companies have found that bigger is not always better.

Federated is certainly taking a big risk in changing valued brand names such as Marshall Field’s in Chicago and Hecht’s in the Washington, D.C. area. It is now up to Federated to show consumers why the name Macys is better in terms of product selection, price, services and overall atmosphere or they will face continuing sales declines.

Mark Hunter
Guest
Mark Hunter
14 years 8 months ago

Yes, the name change should and will be a hit to traffic and sales short-term. I grew up in Seattle and “the Bon” was a key part of everyone’s life…after Nordstrom of course. When the Bon name went away it took away a key piece of the local connection to the store. In the long-run the name change is the right decision, it’s simply going to take a long-time and a lot of goodwill to make the name change work.

Craig Sundstrom
Guest
14 years 8 months ago
FEDERATED REPENT! It’s probably too late to stop this train wreck ( scheduled to crash into the station on 9/11/06 ) but it’s still an important case study. Some points:1) Lazarus wasn’t “acquired” by Federated: it was one of its founding members (along with Filene’s and A&S); it was actually Macy’s that was acquired by Federated…so much for the logic that being acquired is a sign of weakness.2) The Macy’s issue has two components: what’s on the outside, and what’s on the inside; though the former is seems to attract all the attention, there seems to be a genuine issue – at least with the Field’s stores – that Macy’s will be an actual decline in quality; a decline both in the merchandise, and in the service; whether or not this comes to pass, only time will tell, but it’s certainly a real issue beyond the “nostalgia.”3)[Back to what’s on the outside] To my dying day – or double digit increases in SSS, whichever come first – I will claim that Federated should have kept… Read more »
William martin
Guest
William martin
14 years 8 months ago

The change to Macy’s makes sense from a cost savings and efficiency standpoint. It will work if Federated has budgeted for a less than stellar year during the first 12 months. After the transition, results should build, assuming a strong marketing presence.

Mark Burr
Guest
14 years 8 months ago
I can remember and have discussed the same emotion around the change in ownership of J.L. Hudson in Detroit, let alone the closing of the downtown store (once the largest department store in the world). Then came an eventual name change to Marshall Fields in a consolidation of banners by the previous owner. The truth is, many of the locations became better stores as Marshall Field’s. Even myself, packed with emotion from memories of the old name, experiences, etc., could see the positive improvements. The fact is, they were sold. The new owners can do with them as they wish. The consumer can then do with them as they wish. Many of us can think that Federated is making a huge mistake. They may well be doing just that. However, consumers will dictate whether that be so, or not. There is a lot behind a consumer’s decision. For the best of Chicago, I hope that they will give them a try, make a fair judgement, and put emotion aside. In many ways, they have an… Read more »
Eliott Olson
Guest
Eliott Olson
14 years 8 months ago

There are presently differences on the inside between Field’s and Macy’s. Those differences will disappear as will some of the customers.

The Field’s we remember had the best Santa, the Best Christmas Tree, a philatelic department, a large assortment of Hi-Fi’s, a great restaurant and delivery trucks roaming the city. Some of us also remember when everybody got dressed up to fly, the flight attendant was called stewardess and she was young, energetic and would smile. Shoes were made in New England or Wisconsin. Most everything was made in the U.S.A. Car hops would bring your order and put a tray on your window. The gas station attendants would fill up your car, wash your windows, hand you a free map and give you some green stamps for twenty-five cents a gallon.

Cost cutting not only cuts out middlemen and costs, it cuts out the joy. That is why internet sales continue to grow.

Joseph Peter
Guest
Joseph Peter
14 years 8 months ago

As a professional retail designer, I must admit that when I say Vanilla Box for Macy’s, I am not only referring to their merchandise, but I am also referring to Macy’s store decor, lighting, and fixtures. Dayton Hudson/Target did a wonderful job at remodeling all the Marshall Field’s store to be energetic, classy, elegant and beautiful all at the same time.

From visiting various Macy’s stores throughout the USA, I find the lack of punchy accent lighting to be very boring and Vanilla. I could count the number of incandescent/halogen track lights and recessed accent lights I saw in their store on my hand, while the fluorescent lighting was beefed up similar to Kohl’s, Wal-Mart or Sears.

Now on the other hand, if Macy’s really wants to make a punch with store decor in Chicago, their interiors should be modeled off of Bloomingdale’s, which has a truly beautiful store decor package.

Angie Stockton
Guest
Angie Stockton
14 years 8 months ago

As a Cincinnati Macy’s (former Lazarus) shopper, I am quite pleased with the store changes since we’ve become Macy’s. It’s definitely what’s inside the store that counts. The Kenwood store has received a total make-over, with better displays, better assortment, expanded square footage, resulting in a greatly improved shopping experience. Perhaps not every Federated store will receive such an extensive make-over, but clearly there are efforts under way to meet the consumer demands in a given market.

And as far as the shopping experience becoming “vanilla” – when moving to Texas after living in Cincinnati for 7 years, I found it comforting to walk into Macy’s and see the same Private Label brands I knew and loved at Lazarus. It’s like taking a little piece of home with you wherever you go.

These guys know what they are doing. Just give it time.

Nicholas Armentano
Guest
Nicholas Armentano
14 years 8 months ago

I think Federated is making the right decision in changing all its stores to Macy’s. It will be able to advertise nationally and create an identity for the brand. Before the renaming, all these regional chains basically lured customers in with coupons and sales. These department stores began to commoditize their wares. Macy’s, with its “way to shop” slogan, will be able to market itself as a seller of fashionable goods. Customers will no longer come in just for sales. That being said, I can really understand why people are angry about the loss of the regional names. I myself am really disappointed that Lord & Taylor could disappear.

Karen McNeely
Guest
14 years 8 months ago

Don –

First of all, I’m not a Chicagoan, but I’m still of the opinion that the name change is a HUGE mistake. I agree that Carson’s will not take the lion’s share of the market that Field’s loses, but they may peal some off of the bottom. But unlike some other smaller markets, Chicago has plenty of upscale alternatives, such as Nordstrom, Neiman Marcus, Saks, Bloomingdales… The Chicago customer can and will take their pick.

Don Delzell
Guest
Don Delzell
14 years 8 months ago
Dear Chicagoans: You are missing the point. And by the way, I lived in Chicago for 12 years. I took my sons at age 2 to the State Street store to see the windows and wander around in fantasyland inside. Those experiences were real, and I valued them. The point here is not that there are people who have brand identification around the nameplate banner for a department store. Of course there are. The issue is what will their shopping behavior be? The Minneapolis residents still in arms over the previous name change…what happened to market share? What happened to average transaction value and comp store sales? I’m sorry. The mid to upper range department store landscape is not populated by a great many high value choices in most markets. Carson’s is NOT an effective competitor to Macy’s. Sorry. It’s just not. It was and is the low to mid range choice, and always perceived as downscale to Field’s. It still will be in comparison to Macy’s. Do you think people will simply stop shopping?… Read more »
Bill Clarke
Guest
Bill Clarke
14 years 8 months ago
The entire department store segment lost a great deal of identity during the consolidation of Federated, May Company, Associated Dry Goods, Allied Stores and all the others. The strength of the department store concept was the strong local and regional identity. Prior to the consolidations there had never been a successful national department store brand because each major city had its own native store with the name of the founder on the door. The department store of the past was able to cater to the needs and local characteristics of their unique customer base. Although it may have been more economical to operate with centralized staffs and a one-name philosophy, they ended up discarding some great brands that were built over decades in the minds and hearts of local customers. They also inadvertently crushed the preferences of countless millions of customers who had grown up doing business with a particular department store and didn’t like the idea of replacing a treasured local identity with a national brand that had little local cache. For example, right… Read more »
Michael L. Howatt
Guest
Michael L. Howatt
14 years 8 months ago

I don’t think people really need to "get over it." Macy’s thought a 4.5% decrease was bad – wait until they see what happens if they change Marshall Field’s in Chicago. There is a web-site called http://www.keepitfields.org with over 1/2 million signatures.

Plus, if Macy’s takes the road of Safeway and starts to put their brands into distribution, replacing known, existing merchandise, they will suffer the same loss in share as Dominick’s has to Jewel. With a name change, most consumers also expect product changes, and that’s the real killer.

J. Peter Deeb
Guest
14 years 8 months ago

If it is truly what is inside the store that counts for the consumer then the extra cost of maintaining a Store Name and the Private Label associated with it are worth the extra cost to maintain those names. Certainly Kraft, General Mills, etc. have not played around with the name brands they have acquired ( Nabisco, Oscar Mayer, Pillsbury, etc.). It is also very hard to change a Private Label when consumers have years of confidence in the brand and products.

It appears that the bean counters are beating the marketers in the internal battle at Federated.

Mark Lilien
Guest
14 years 8 months ago

American executives are often accused of chasing short term objectives in place of healthier long term goals. No doubt Federated knew before making any name changes that there would be short term damage: disrupted customer loyalty. The major questions: how short is the short term and how much will the damage cost? Had Lazarus, Marshall Field’s, Rich’s, and all the other Federated-acquired names been winners, the brands wouldn’t have been sold to Federated. Federated was the acquirer for a reason: their finances were stronger. One reason their finances were stronger: the brand was stronger. By creating a national brand, Federated gains economies of scale in their advertising and supply chain. Reducing these major expenses has to be important for all retailers.

Don Delzell
Guest
Don Delzell
14 years 8 months ago

What has happened to same store sales in the Columbus area since the name change? What has happened to overall department store traffic in the area?

These provincial banner non-issues are silly. Federated determined that whatever short term brand equity loss would be sustained was outweighed by the long term benefits of the single banner. Was this a bean counter decision? No. Certainly economics, synergies, and other financial metrics were considered. But at the core is the Federated belief that the brand values associated with Macy’s are likely to be valuable across the country.

Get over it. The names have changed. Either the assortments and shopping experience will please the consumer or they will not. If the consumer is pleased, word of mouth will be sufficient to offset fear of change. And none of that takes into consideration the advertising Federated will do over the years.

Non issue.

Aaron Spann
Guest
Aaron Spann
14 years 8 months ago

Duh! The Macy’s brand only had value to consumers who lived in or traveled to the New York or San Francisco areas. now that Federated has blanketed the US with Macy’s the brand has diluted value/cache.

Locally, Goldsmith’s was traded out for Macy’s and now nothing really seems special at all. I would be willing to bet that fans of Lazarus and Rich’s feel similar – as will the people of Chicago when they lose their Marshall Field’s. Consumers are still human; they attach and identify themselves with places and names. In this case, throwing out a trusted name is like erasing a piece of someone’s identity.

Bill Bishop
Guest
Bill Bishop
14 years 8 months ago

This is a big deal, and we’re seeing exactly the same thing play out with the Marshall Field’s name-change here in Chicago.

Federated must take note of these signs, and my guess is that within a year, all the executives who are now advocating “stay the course” will be gone, and there’ll be a face-saving way to get back to the old brand equities which, by then, will be less potent than they are today.

Think about the damage done when the Lucky Store brand was abandoned in California a number of years ago.

Also, consider the findings of the newest Coca-Cola Retailing Research Council study on Getting to Great: Mapping Management Practices that Drive Great Performance. That study documents the fact that customer and employee loyalty play a central role in great store performance. How can a name change NOT impact the “loyalty thing”?

Joseph Peter
Guest
Joseph Peter
14 years 8 months ago
Mr. Delzell: You obviously have not immersed yourself in Chicago news, Chicago media, Chicago culture or Crains Chicago Business. I would like you to take some time to come to Chicago and interview Chicago shoppers and then report back on your findings. This a HUGE issue, not a non-issue. There was just an article in this past Sunday’s Chicago Tribune, not including the almost bi weekly article about how Chicagoans are ticked off at Mr. Lundgren for this change. Click here to read it. Like I have said hundreds of times, Macy’s needed to study Chicago better. Bringing Frangos back to Chicago doesn’t cut it. Again and again I tell you all to observe the Dominick’s/Safeway merger here in Chicago. Safeway was smart enough to keep the Dominick’s name, but they changed all the products to reflect Safeway stores and chased Chicago consumers away. NOW, Safeway is fighting back, opening and remodeling Lifestyles stores that almost resemble Bob Mariano Dominick’s Fresh store and the customers are zooming back to Dominick’s. I think Federated has too… Read more »