Macy's 2002 Annual Report Download - page 10

6
How do you win in a battle against
discounters and specialty retailers?
Federated’s most potent weapons in an over-stored retail
environment are quality, fashion newness and customer service,
combined with a much more obvious value presentation.
When customers select gifts for friends or loved-ones – or
want a special-occasion item for themselves – department
stores are a natural destination. The quality of department
store merchandise exceeds what you’ll find in discount
stores – and the assortment is larger and more varied than
in specialty stores. Fashion-oriented department store
customers understand that they don’t need to sacrifice the
best quality, selection and service for value.
Our challenge is to offer the best possible merchandise
assortment for shoppers, and to clearly demonstrate and
communicate the value we offer for the price. Both are core
strategies for Federated.
Differentiated product also represents an advantage for
department stores over national-chain discount and
specialty stores. Federated is working more closely than
ever with
national brand
vendor resources
to identify
exclusive and
limited-distri-
bution items and
lines that can be
found first by
customers at our
department
stores. We are
supplementing national brands with our own distinctive
and highly popular private brands that are, by definition,
exclusive to us and represent fashion, quality and
recognizable value – a combination that no discounter
can match and no specialty store can beat.
Can customers get real value in a
department store?
Customers can get exceptional values in a Federated store.
In fact, in a recently concluded survey, our customers
confirmed that the prices they paid in our stores were very
competitive. We are challenging ourselves to do a better job
of making this value obvious to the customer.
We’ve adopted price simplification as a core strategy to
demonstrate the value we deliver to customers. As part of
this, we are working to reduce confusing multiple price
promotions, such as offering fewer coupons on top of
percentage discounts. Instead, we are migrating to sale
pricing that is clearer and less complex, making the real
value behind that pricing a lot easier to appreciate.
We’ve also initiated a Best Value program in which hot-
selling items are offered at everyday low prices. When
customers see a price tag ending in 98 cents, they know
they need not wait for that quality item to go on sale –
it’s value priced already. Our job is to make sure customers
understand when they’re getting great deals from our
stores, and Best Value pricing helps us do just that.
In reinvent stores, price scanners located throughout the
sales floor calculate discounts and savings for the
customer so there’s no confusion about the out-the-door
price of the item. Our customers love them, and so do we.