Read the text and Answer the discussed questions.

Questions for discussion 1. How has Macys modified its marketing strategy to focus more on customer experiences to be competitive? Are these changes in line with the needs of todays shoppers? 2. How does Macys define the shopping experience? Describe the difference between the employee experience and the shopper experience at Macys.

How Macy has reinvented the shopping experience By facing the changes in consumer and shopper behaviors, the retail sector is continually reinventing the points of sale by integrating digital technologies in stores and, at the same time, designing warm and welcoming atmospheres centered on the customer journey. The retailer's goal is to create a fluid, unique, and memorable experience that the customer will remember. Currently, Macy's is one retail chain that is working on reinventing the online and offline shopping experience in its stores. Therefore, it is essential to understand the story behind Macy's success as well as its challenges and the way it is adapting to shoppers' needs. How did it all start? Macy's effective marketing strategy Rowland Hussey Macy was born in 1822. During his young adult life, he failed at many attempts to open his own businesses: - In 1844, he opened a needle-and-thread store in Boston. - In 1849, he prospected for gold in 1849 during the California Gold Rush. - In 1858, Macy decided to move to New York City and open his own upscale dry goods store: R.H. Macy \& Co. The store was located on the corner of 14th Street and 6th Avenue. On the first day of operations in October of that year, the company took in $11.06. The logo of the brand was a star, just like RH's tattoo that he had got while working on a ship a few years prior. R.H. Macy \& Co. had an advertising budget of $2,800, and its revenues quickly grew to approximately $85,000 by the end of the year. Over the years, the store began selling different products and expanded to 11 adjacent buildings. Up until the 1950 s, Macy's had a robust cashonly payment policy. In 1875, Macy included two family members as partners in his business: Robert Valentine and Abiel La Forge. However, the three partners would be dead in the next three years. The company continued to be owned by the Macy family until 1895 when the Straus brothers acquired it. In the early 1900s, the store relocated to New York's Herald Square. The store quickly expanded in the area and occupied several buildings. The business was located far from other dry goods stores, so transportation services were offered for customers to make it easier for them to get to the store. In 1924, the Herald Square store became the largest store in the world, and around 10,000 people watched Macy's first Thanksgiving Day parade. From the 1920s onwards, Macy's kept expanding all over the United States by acquiring stores in Queens, Toledo, Atlanta, Newark, and San Francisco. In 1946, The Macy's Flower Show was launched and was held at the company's flagship stores in New York City, Chicago, and San Francisco. In 1976, Macy's held a firework show on Independence Day in New York City. It is now the largest fireworks display in the nation. In the early 1980s, Macy's opened stores in Florida, Houston, New Orleans, Dallas, and other cities. In 1988, R.H. Macy \& Co. merged with Federated Department Stores and moved its headquarters to Cincinnati. Federated Department Stores was a holding company for several family-owned department stores: Abraham \& Straus, F\&R Lazarus, Filene's of Boston, Bloomingdale's, Stern's, Dayton, Rike's, Goldsmith's, Bullocks, I. Magnin, and Rich's. In 2005, the company was operating under two names only: Macy's and Bloomingdale's. Federated acquired the May Department Stores Company in 2005. By 2006, Federated had converted over 400 of those stores to Macy's brand. In 2007, Federated Department Store was officially renamed Macy's Group. In 2008, Macy's adopted a localization technique called "My Macy's" to consolidate into three divisions. The company also launched a sustainability initiative to increase its efforts in helping the environment. Although in 2014, Macy's went overseas to open its first store in Abu Dhabi, in 2015, Macy's started closing down underperforming department stores and laying off employees. In 2016, an Apple Store opened in the New York store. By 2018, Macy's was operating 871 stores; 636 were Macy's stores, with the remaining stores being Bloomingdale's, Bluemercury, and Backstage. In 2018, all Macy's stores began offering "buy online, pick-up in-store" and "buy online, ship to store" services. In 2020, Macy's announced that it would close more than 123 stores over the next three years. Besides, Macy's Inc. is the owner of Bloomingdale's and Macy's department outlets, and Bluemercury, a chain of beauty products, and spas. Macy's is mainly involved in the lifestyle and retail industries. Its main competitors are Kohl's, Lotte Shopping, Aeon, JC Penney, and Neiman Marcus. At Macy's, the target market is composed of the upper and middle-upper class society. - Products: Home products: cutlery, kitchenware, furniture types, tables, chairs, chocolates, and desserts. Bed \& Bath products: bed sheets, comforter, towels, pillows, and mattresses. Women products: clothes (e.g., dresses, shirts, sweats, leggings, jeans, shoes, accessories, swimwear). Men products: clothes (e.g., jeans, hoodies, tuxedos, suits, polos, watches, belts, shoes, wallets, ties). Kids products: clothes, accessories, and toys. - Place: Macy's Inc operates 680 department stores under the name Macy's or Bloomingdale's. They have 190 specialty stores that have Bloomingdale's outlet, Bluemercury, and Macy's Backstage. Stores are spread over 43 countries and in Paris and Dubai. To be able to handle its operations more efficiently, Macy's U.S. operations are split into several divisions: Macy's North, Macy's East, Macy's Midwest, Macy's Florida, Macy's Northwest, Macy's West, and so on. Macy's has a reliable distribution channel. The company has stores that are partially or fully owned, leased stores, and an efficient supply chain and logistics network. - Price: Macy's target market is clearly defined. Its products are reasonably priced and usually follow this promotional pricing plan: clearance sales, seasonal sales, festive sales, deals-of-theday, discounts, and coupons. - Promotion: An intensive marketing communication strategy is used. Campaigns are launched via print ads and ads in other media, such as television, magazines, and social media platforms (e.g., Instagram, Twitter, Facebook, YouTube). Brochures and store catalogs are always available to inform customers about discounts and benefits. Personalized emails are also sent to loyal customers to inform them about new promotions and the company's loyalty programs. Some innovations Macy's has used to increase its brand visibility and attract customers are as follows: - Macy's Thanksgiving Day parade each year. - "The Market@Macy's,"where popup shops and products are pushed through. - An advertising budget organized in a way to be able to target its loyal customers better (e.g., rely more on local TV ads instead of confusing them with hundreds of promotions). - In-store Santa Claus-themed exhibits and decorated windows to attract customers. - Window displays, which introduced the concept of "window shopping" to the retail world. - Teabags, colored bath towels, and Idaho baked potatoes. - Made-to-measure clothing for men and women. - Macy's credit card. - My Wallet is a "virtual wallet" for customers. It contains their credit cards, coupons, and promotions, which allows them to keep up with the benefits and discounts they receive from Macy's. How is Macy's mapping the shopper experience and journey? Macy's caused a revolution in the retail industry when Fred Lazarus (the founder of Federated Department Stores, which became Macy's, Inc.), arranged clothes of the same style together in groups of single sizes in the mid-1930s. Lazarus based this grouping technique on observations he made while he was in Paris. A hundred years later, the company's app also changed the way people shop. The app has a "scan and pay" option that makes it easier and faster to check out. Clients simply scan the barcode on an item; they pay for it using their cards on the app, go to Macy's "Scan \& Pay Checkout" counter. There the security tag on the item is removed, and customers get their shopping bags. The app also has a function called "Style Inspo" that suggest outfits for the day and night after the shoppers take a quick quiz on the app. Besides, a "Snap \& Shop" feature allows clients to take a snapshot of items that they like, and the app suggests similar items from Macy's stores. Another way that Macy's app has completely changed the traditional shopping experience is via its virtual reality options. For example, clients can scan their rooms on their apps, and visualize how the furniture available at a Macy's store will look in their places. That way, people can make sure that the items fit and match the setting of their rooms before they buy the furniture. The same concept has been applied to beauty products. A "Virtual Beauty Try On" option allows shoppers to "try on" beauty products in pictures of themselves to pick the perfect lipstick color, mascara, or eyeshadow. One incentive customers have to use the app is that they collect "Star Money" with every purchase. Their Star Money balances determine the different statuses of customers and the range of perks and offers Macy's gives them. Also, clients can shop on the app and have items delivered to their nearest stores. Clients are contacted by the store when the goods arrive and receive notifications on their phones with updates on their packages. It is also vital to mention STORY, which became part of Macy's in 2018. STORY is an attempt to collaborate with small businesses and introduce their products to Macy's customers. Some brands pay to participate in these events. However, small businesses are encouraged to join for free but get a commission on what they sell at the events. Every couple of months, STORY changes themes. Among the subjects introduced: "Remember when," "Love STORY," "Wellness," and "Home for the holidays." "Our goal right now is to look at new areas of the business like STORY to improve and overhaul the metabolism of the company," says Jill Ramsey, Macy's Chief Digital Officer. Whatever projects they are working on, Macy's employees always keep their vision aligned with the company's strategy, which is as follows: - Strengthen the customer relationship. - Curate quality fashion. - Accelerate digital growth. - Optimize the store portfolio. - Reset the cost base. Macy's consumer-centricity and customer experience touchpoints Macy's understands that to keep its customers interested, it continually has to use technology to innovate. An entire team is dedicated to managing the online marketplace and e-commerce. The team's main task is to provide the same excellent retail experience, whether the client is in the store or online. The sole purpose is to get "a happy customer with a full cart." Macy's is also investing heavily in artificial intelligence (AI) to improve customer experience. AI is employed in two ways in the Macy's app: (1) It encourages self-service; and (2) it allows customers to summon a sales associate to help. This strategy will raise the level of retail services in an industry that has become highly competitive. Macy's uses the app to get customers excited about the holiday season. To help raise money for the "Make a Wish" foundation (which grants the wishes of critically ill children), the Macy's annual Believe campaign was launched on the app, which was a success. It has raised more than $8.7 million. It allows shoppers to write letters to Santa and participate in Guinness World Records by attempting to make the most extended wish list to Santa and encouraging its customers to share in the spirit of goodwill. Macy's also implements interesting information systems that can be summarized as follows: - MST (Macy's System and Technologies): Formed in 1985 to consolidate the data of the operations, MST is mainly the retail, electronic, and data warehouse high-performing system used in all categories of Macy's activities. A combination of technologies is used to meet the business needs (e.g., wireless, Internet, client/server, midrange). They are always aligned with the vision of all departments to ensure that the system is in line with the constantly changing business environment. MST focuses on highvolume transactions and quick order fulfillment. It supports the company's goal of offering the same experience in stores and online. MST also incorporates support systems, inventory management, the tracking of orders, and the expansion of the range of products in stores and online. - MLO (Macy's Logistics and Operations): MLO was created in 1994 to facilitate the coordination of Macy's logistics, merchandise distribution, and vendor technology. Its primary mission is to reduce costs and processing time in shipping. Additional functions were developed later to control expenses, recover assets, prevent stockouts, and prevent losses. Leveraging technology and omnichannel data to offer the complete retail experience Macy's creates insights based on its data collection and analysis to offer an exceptional customer experience for each of its millions of clients. The company's goal is to make the experience more personalized across all channels to stay at the forefront of its customers' expectations. An analytics team is present to help integrate the datadriven insights into the company's strategy and decisionmaking. Using the system and the app, the team analyzes the shopping behavior of each person. Macy's then creates a detailed profile of each of its customers and markets its product accordingly. Macy's is, as a result, able to send approximately 500,000 different versions of the same email tailored to different customers. Also, using analytics, Macy's predicts what kinds of items to offer in each store, when to provide them, and how much each item should cost. In the first quarter of 2014, Macy's deployed SAP's InfiniteInsight solution, a predictive analytics option. It allows Macy's to personalize its marketing campaigns to reach consumers better. Before implementing this option, Macy's used to analyze different variables on Excel Spreadsheets to deduce that a specific customer would spend a certain amount of money in its stores. The employee would then have to consult a data analyst to create a predictive model for each product category. The models allow Macy's to analyze ten million terabytes of information daily, which has improved the company's online sales by 12 percent. The increase has been achieved by sending more personalized emails and targeted ads to each website visitor. The models have also made it easier to analyze customers' behavior patterns, recognize hot selling items, and plan in-store sales. These operations are conducted in real time as compared to the weeks and months it took to analyze the data previously. Macy's challenges in the future: what's next? Macy's is currently undergoing a restructuring plan. Some jobs will be cut, and some stores will be closed to cope with the retail industry changes. Many customers prefer to shop online rather than go to a shopping mall. Some of the main challenges that Macy's might face in the future are: The company's Growth150 plan: This involves outfitting some of its most profitable stores with new decor (e.g., lighting, merchandise, fixtures) as a way to recapture some of the company's clientele. - Opening more Macy's Backstage stores: Macy's Backstage competes with heavily discounted brands like TK Maxx and Nordstrom Rack. Macy's noted that the stores that include a Backstage shop inside sell around 5 percent more than other stores. - Quickly getting hot items into stores: Macy's is now working closely with its top vendors to ensure that the best-selling items are available in its stores. - Updating the Macy's app: It should be continually updated to compete with online retailers. Mobile is retailers' fastest-growing channel nowadays. In 2018, Macy's sales through the app reached nearly $1 billion. - Closing down stores: The big question is what Macy's will do with all this real estate. The company is currently negotiating with community stakeholders to create "complementary uses" for some of its locations. - Halting sales declines: Sales are slowly declining because it is now easier for shoppers to compare prices online. Moreover, Macy's stock price has been decreasing for a while. A solution should be found to avoid the halt of the growth of the company