To view the new Macy’s campaign Just click on http://www1.macys.com/campaign/macystv_brand_relaunch.jsp

It’s been interesting seeing the nationalization of Macy’s taking place on televisions and in newspapers in almost every major market in the country the past couple weeks. Saying good-bye to venerable names like Marshall Field’s, Hecht Co., Burdines, Foley’s and others, Macy’s has launched a well produced national campaign built around one of my favorite Motown songs– Martha Reeve’s and The Vadelas’ “Dancin in the Streets”. In many of the cities mentioned in the song, Macy’s banner now hangs high in shopping center after shopping center. The new campaign extols that the excitement of Herald Square is now being generated in market after market. Or is it?

Federated CEO Terry Lundgren is confident that the consolidation of the stores under the famous Macy’s logo will bring positive sales trends to the chain of stores that have been floundering the past several years. Maybe, Mr. Lundgren should listen more closely to his new theme song. Yes, the customers are not only dancing in the streets, but they are also spending more of their time shopping there as well. Part of the problem with today’s department stores is that they are still anchored in regional malls where today’s customers no longer dance around every week, much less shop. The customers are now excited about the new downtowns and neighborhoods where stores are cropping up more regularly and where customers love the convenience (and the ambience) of being able to park and shop right in front of the store. It holds true for the “Power Centers” which are being built all around town, including many on the same sites where defunct regional shopping malls were recently razed. The excitement of Macy’s flagship on Herald Square just doesn’t exist in the next great Town Center mall and the customers know it. They also know that the stores there haven’t branded themselves to their customers by providing an exciting—OK, at the very least, pleasurable —shopping experience.

What’s more they aren’t addressing the stiff competition from the Targets, Kohl’s, and others who are not only offering as much fashion but also doing it more conveniently and at a better price. Last week in a presentation to retail marketing executives, Michael Francis, Target’s CMO, said that their store’s biggest share of market gains are coming from the department stores. Wal-Mart has been taking share for years with price and selection. Target now takes it with fashion and the excitement that department stores were known for when they identified closely with the communities in which they were located.

The new “Streets” campaign is well executed, the message is clear, and the media weight will bring higher awareness for the Macy’s name—as if they needed it. However, it does not give me—a veteran of 8 years in the department store business—or any other customers a reason to shop a store that they haven’t visited in months. They have not given a reason to abandon Kohl’s, Crate & Barrel, or Men’s Warehouse and come back to the mall
So, Macy’s is everywhere. Now why should we shop there??

I finished one of the most interesting assignments of my career a couple weeks ago. Working with Levitz Furniture on Long Island for the past five months gave me an opportunity to live in Manhattan. This was something I wanted to do when I finished graduate school many years ago, but Uncle Sam had other ideas for me. Having traveled regularly to the Big Apple, I always appreciated how the city somehow works against all odds.

I think the late Charles Kuralt said it best in his “13 Favorite Places In The World”`segment that he produced prior to his death. One of the places that he discussed and featured was the town that he called home for most of his life—New York City. Kuralt said that the reason New York City works so well is that it is a large city made up of a thousand small neighborhoods. Each one of those neighborhoods was its own small town and each one had its own character. And so it was for me when I settled in to my small studio apartment on West 34th Street not far from Penn Station. I soon began to appreciate my neighborhood.

First, there was Ruppert, the evening doorman at my place, who always greeted me with a smile and an “Alright!” before a commentary on the day’s weather report. Next door the dry cleaner and laundry run by a Korean woman who would not only get your laundry back the same day but also have it at the apartment lobby for those of us who usually got back long after they closed at 7pm. Down the street, the Food Fair deli and market was a frequent stop when there was no dinner on the town and their fresh wraps were as good as any food I had at the Bryant Park Grill – the smiles on the two Middle Eastern owners was worth the visit. A little further, Shutters Bar and Café was a good place to stop on a cold or rainy night where John would serve up some of the best meat loaf (and I love meat loaf!) I’ve ever had along with some great Montepulciano d’Abruzzo wine, and jazz from Thursday thru Sunday. Across the way, the Wine Shop was open it seemed at all hours with a great selection and great prices for a 500 square foot establishment. Further down, the Skylight Diner lived up to it reputation as New York’s best diner (according to the Daily News) with wonderful breakfasts and a lot more. Of course, B&H Photo and Video on the corner was an experience showing that you could sell millions of dollars of electronics and photo gear and still stay closed for the Sabbath and every other Jewish Orthodox holidays. I could go on with a lot more and never have wandered more than a block from my front door (see the view above.).

Of course, there was the exception to a good branding retailer with the Kmart Penn Station. This Kmart does more business than any other Kmart in the country despite some of the surliest employees and a chronically broken escalator between the second and third floors. Sometimes location is everything.

What all the other places had in common was that–to the surrounding community–they were famous for something and had people working there who were more neighbors than just sales people. Isn’t that what retail branding is all about? As I travel around the city, I still wonder at the number of stores that do business in neighborhood after neighborhood. No shortage of competition here. But to their market (which may only be one square block) they are the best brand in their category. Duane Reade Drug Stores learned that when they realized that sometimes their market is only the building in which they are located and they serve it well while struggling with suburban locations. It’s all about finding your niche and getting the right people to live up to it everyday.

Now, back to Florida.

I’ve been to the circus a few times over the past 4-5 years and I hadn’t heard those words to start of the show. The reason, of course, was that I had been to Cirque de Soleil and hadn’t given a thought to going to the “Greatest Show On Earth”. Yes, every year I would see the news reports when the circus came to town or left its home in Sarasota to go on the road once again. But I wasn’t the least bit motivated to go and see a three-ring circus filled with clowns, elephants, and trapeze artists all at the same time.

Until I read an article recently in USA Today. The story revealed how this year’s edition of the Ringling Bros . and Barnum & Bailey Circus had been re-imagined. In order to appeal to today’s young families who are living in three ring lifestyles with video games, computer-generated thrill shows, theme parks with high tech rides, and pocket games that they can play everywhere and everyway they want, the circus had to change. With hip-hop music, one big ring with exotic acts, and even its first female ringmaster, the circus has changed. Apparently it is paying off, according to Nicole Feld, the show’s co-producer and member of the Feld Family that revitalized the circus over 30 years ago when they bought it. As he says, they are constantly changing to appeal to today’s kids and in turn, make their parents hero’s for taking them to the circus just like our parents did over the years.

Amazing that more stores don’t get the same spirit of change to constantly appeal to their customers. Sure, Abercrombie, Coach, Banana Republic and others have re-invented themselves in the past successfully and they know that it’s an ongoing process. As more department stores become Macy’s, I ask what have they done to change for their customers? The malls and the stores anchoring them are much like the 3-ring circus—a lot of stuff going on but not many people paying attention or excited by them. Target has added excitement to the discount world, Costco has made food and warehouse shopping an experience. Publix and Wegmann’s have made grocery shopping an experience instead of a chore. The customers are changing faster than most retailers can change the theme lines of their latest commercials. I’ve been working in the furniture industry the past several weeks and am amazed how this industry has stayed the same in terms of shopping experience for the past several decades. Only IKEA and Rooms to Go seem to have noticed that the customer has changed.

The brand is built upon change…changing to build a better relationship with the customers, and like the circus the acts (the people putting on the show) have to change. Out with lion tamers and in with Chinese acrobats who do things we can’t even imagine. Out with old salesman and in with consultants who really understand the customer and what they really want.

So….on with the show!

If you are going to write something about retail marketing you can’t help but discuss Wal-Mart . So the recent announcement that Mr. Smiley Face– who starred in Wal-Mart price reduction campaign for so many years– was being put out to pasture is more than just a simple decision to change ad themes.

One of Wal-Mart’s strengths (and there are many) has long been their market-leading perception as the lowest -priced retailer. You name the category, ask a customer and Wal-Mart always comes out first as the store with the lowest prices. That said, and price always being the first criteria for making a store selection, this was certainly one of the reasons for the chain’s growth to becoming the largest company in the world. I’ve always maintained that a good price perception merely gets you on the competitive playing field in retail, but Wal-Mart parlayed their price perception in becoming king of the hill on that playing field. However, it wasn’t just the low prices that has made Wal-Mart the favorite of more consumers than any other store. Their ongoing campaign with real people—customers and associates talking positively (and believably) while building the trust and respect through their many good works with Children’s Miracle Network, Buddy Walks, etc. – was more than just low prices always. It was genius in building customer trust and loyalty while driving prices lower for all consumers. Of course, this was to the dismay of many small retailers and suppliers who couldn’t compete. But it was and is their strength far and above the low prices that old smiley kept promoting.

So sales aren’t growing at the double digit rates of the past, now everyone falls in love with Target (even though they do 20% of Wal-Mart’s volume), and the company decides that the marketing that put them way out in front must change and bring in the competitor’s thinking (Target), packaged goods marketing strategy(FritoLay) and automotive insights(Chrysler). They fire the agencies that worked so hard to bring the success. Now, let’s copy the competitors in getting celebrities who nobody believes shop at the store. And while we’re at it, let’s ex-communicate old smiley face.

It may work. But if all you do is copy the competition and resort to all the great marketing techniques that have made US automotive retailing lag behind the other countries,is that forward thinking? If you forget the key strengths that makes your check outs far more populated than the darlings of the retail press, is that being a leader? I’m not sure there will be any smiley faces in the boardroom in Bentonville or in the portfolios of investors.

What do you think?

Ken

As we wind down from the Sweet Sixteen, Elite Eight to the Final Four, another great sales promotion season winds down to an exciting finale. I was wondering what retailers did for a sale event before the NCAA and the television networks decided to make the college basketball tournament a national reason for yet another series of sales and promotions called March Madness. I guess they were Easter Sales back then when it was politically correct to tie in with a religious holiday (even though the bunnies and chocolate eggs had no religious symbolism at all.)

But here we are with Buick being the official car of March Madness and retailers in every category are trying to capitalize on a basketball tournament to drive people into their stores. As if any store really has a “shot from downtown” to convince a customer to make a trip to the store for “just another store.”

It’s interesting that none of the big box schools who were favored to win it all this year are no longer in the big show. Not so in the retail world where the best brands continue to do well and don’t need to rely on another fake sale to make their numbers. Case in point: Home Depot and Lowe’s. An article in the St. Petersburg Times, asks “who’s your home team?” The article compared the two giant home improvement retailers. Sure, they do a lot of the same things from the size of their stores and offerings to the competitive NASCAR teams that each sponsor. Some say the only difference is that one is orange and the other is blue (Go Gators!). But the article (and the customers) explain that there are a lot more differences that the color of the aprons. Lowe’s developed a brand strategy long that recognized that women were as important –if not more important—in the buying decisions for home improvement than their male counterparts. With an expanded commitment to appliances, a more comfortable environment, and targeted communications, Lowe’s gradually has eaten into Home Depot’s dominant market share and now does just slightly under the sales-per-store volume ($37.7MM vs. $40MM for Home Depot). Both retailers have been outstanding examples of brand strategy and execution- although Home Depot took its eye off the ball in terms of customer service a few years ago thus giving Lowe’s an opportunity to scoop up some share of market. Now Home Depot has recognized the importance of the female customer and is back on track to the tune of $81.5 Billion in sales annually.

Does that mean it’s really down to the Final Two in this retail tournament? What about Ace Hardware, Sherwin Williams, and others? Well, they certainly can’t compete in size, but they can provide the kind of personal customer service and convenience that the big boxes can’t. There’s a reason why chain drug stores prosper even though the Wal-Mart’s ,Target’s and Costo’s sell everything they have for less. It’s called a brand strategy that provides personal service and convenience. If the smaller hardware and home improvement specialists focus on their niche and don’t get caught up in the March Madness of another sale event, they can prosper. Then again, there’s George Mason U.. Who’d a thunk it??
Ken

PS – GO GATORS

Over the past several days, there has been a lot of conversation about this year’s round of Super Bowl Commercials and whether they were worth the $2.4 Million price tag for the mere thirty seconds of air time. Frankly, I thought that this year’s crop fared better than the past couple years and actually were much better in terms of excitement and surprise than the game itself (I’m sure there are some Steelers fans who would disagree).
One of the things that struck me, however, was seeing the Ford Field signs throughout the coverage over the two weeks leading up to the game. I’m sure Ford must have felt proud that they spend the mega-millions in stadium naming fees when they saw all of the coverage. Just as they do when they watched Phil Mickelson in the FBR Open from Phoenix as he sported the Ford logo on his shirt even if he didn’t fare so well on the final 18 holes. I’m sure that GM must be proud of its title sponsorship of the Buick Opens (how many are there, anyway?)
You can’t help but wonder if these “product placements” could offset the recent bad news out of Detroit for both of these major car companies. Both announced major cutbacks and plant closing to “revitalize” these companies and their automotive brands. Do they really need the heightened awareness of seeing their names at these sporting events when Toyota has now taken over the lead as America’s most popular car brand?

Seems to me that the money would be better spent convincing consumers that the Fords and Chevy’s and Buicks are worth more consideration for their auto purchases by giving some rationale as to why their cars are really good machines with great styling and great performance. I think it’s called branding. But, No, the auto marketers would rather see their money go after sponsorships and awareness – building exposure that makes them feel good, but thenleaves the car buyer opting for more Asian manufactured cars. I was dismayed to hear that Ford had decided to discontinue making the renewed Thunderbird a few months ago. Not long after it was named car of the year, the company cut back on marketing funds and left it up to the dealers to sell the cars. Meanwhile, Toyota and Lexus (Hyundai and Kia as well) consistently give us a reason to buy their cars beyond another Factory Incentive or Rebate. People stopped buying the T-Birds and now they will go the way of the Taurus and Oldsmobiles. Stick to reinforcing the brand and maybe you’ll sell more Fords.

Which brings us back to the issue of retail branding at the store. Once again the companies cut back on their branding messages and leave it up to the salespeople who still think that selling cars is the same as it was in the ‘50’s and ‘60’s by offering rebates and saying “what will it take for me to get you to deal today?” The companies need to sell more reasons to buy the car and then train their showroom personnel to help the consumer get the right car—not just sell them. It’s another retail branding problem that can’t be fixed with another employee pricing promotion ,factory incentive or $2.4 M commercial. It’s building a relationship with the customer day in day out.

RANDY CURTIS
I just got back to my office and learned that a good friend and colleague, Randy Curtis had passed away suddenly yesterday. Randy was one of my frequent commentators on this blog and a real retail marketing professional. He was the creative spark behind the successful Wal-Mart campaigns over the past several years before, like me, he decided to share his knowledge with more retailers as a consultant. I just met with Randy last Friday at the Retail Advertising Conference in Chicago, where we had shared some great conversation and committed to each other that we would work together soon on a project or two. The thought of joining forces was invigorating and exciting for me. He was a great guy, a big supporter of RAMA, and a great family man . I will miss him