Macy's 1999 Annual Report Download - page 6

overall capital budget of $1 billion. In other instances, it may mean reallocating space
and locations of certain merchandise categories inside of the store – moving junior’s
departments next to young men’s and closer to mall entrances, for instance, to create
a critical mass that attracts younger customers. Or it may mean adding lighting or
enhancing visual merchandising techniques in our stores, making the merchandise
more visible and attractive to customers.
Among our other goals for the year ahead is improving the shopping experience
for our customers, including making transactions faster and achieving higher customer
service standards. We also will continue testing new concepts, some of which are
discussed later in this report, as we strive to “reinvent” aspects of the department store,
making it more convenient, more relevant and responsive to the needs of today’s
customers – and tomorrow’s.
Part of this strategy involves finding new ways to integrate the various facets of
in-store and online retailing – bringing the Internet into our stores in innovative ways
that can increase customer service and expand merchandise offerings, and using it to
drive traffic to our stores through cross-promotions and multi-channel marketing.
Of course, it is the quality of our people that makes the real difference in defining
Federated’s successes. And we are blessed with an abundance of incredibly talented,
dedicated, hard-working and creative people in every aspect of our business. From
stores and sales leaders to merchants and operations staff, Federated’s people are at the
heart of who we are and what we can accomplish. We thank and commend each of
our 133,000 associates for all they have done to make 1999 such an outstanding year.
Federated also is fortunate to have an involved, committed board of directors. We
value the wisdom and support of each of our distinguished board members, certainly
including that of George V. Grune, chairman of the DeWitt Wallace and Lila Wallace
Reader’s Digest Funds. Mr. Grune is retiring from the board this year, and as he does so
he takes with him our sincerest thanks and appreciation for all of his many contributions
to Federated. He will be missed.
As we move into this new century, we are committed to continually renewing and
revitalizing our company. We believe that being on the cutting edge of retail means
being willing to lead rather than being satisfied merely to follow. And leading is exactly
what Federated is doing.
Sincerely,
James M. Zimmerman Terry J. Lundgren
Chairman/ Chief Executive Officer President/ Chief Merchandising Officer
April 19, 2000
2000 and Beyond
W hile the majority of Federated’s
business for the foreseeable future
will continue to come from our
powerful netw ork of department
stores, we also have embraced
the Internet and its inherent
potential for integrating stores
and e-commerce. Federated’s
cutting-edge “bricks-and-clicks”
strategy positions the company
to take maximum advantage of
where the future of retailing is
headed. Following is a look at
how we think both the depart-
ment store and direct-to-customer
segments of our business will
benefit from this multi-channel
retail integration:
E-commerce benefits to stores --
or how clicks can help bricks:
• Drives traffic to stores
• Reaches and attracts new
customers
• Deepens relationships with
existing customers
• Expands range of merchandise
offerings
• Extends the reach of retail
franchises
• Enhances gift registry services
• Raises store standards to meet
demands of Internet customers
• Provides new career growth
opportunities
Stores benefits to e-commerce --
or how bricks can help clicks:
•Leverages trusted store brands
•Provides merchandising expertise
•Builds on established vendor
relationships
•Strengthens appeal of private
brands
•Gives customers confidence in
online offerings
•Provides immediate access to
real products
•Makes merchandise returns
more convenient
•Increases return on marketing
and advertising expenditures
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