Macy's 2006 Annual Report Download - page 16

Mastering the Details
Examples of innovation abound across Federated’s support operations.
Federated Systems Group, for example, continues to be recognized
among the nation’s elite corporate technology organizations. Having
completed the integration of Federated and May Company systems,
operations and platforms, the next technology frontier is to upgrade
Macy’s and Bloomingdale’s point-of-sale systems so transactions can
be faster, more ecient and integrated with customer service initiatives.
Advertising, merchandising and direct-to-consumer systems also are being
improved to provide new levels of information, support the management
of larger sales volume, and help tailor assortments by store.
The company’s Financial, Administrative and Credit Services (FACS) Group
division, which partnered with Citigroup in 2005, added a fourth hub in
St. Louis (the others are in Cincinnati, Tempe, AZ, and Clearwater, FL) to
support credit programs and customer service across the country.
In part, these facilities support Macy’s Star Rewards, a robust loyalty
program that provides merchandise certicates and special oers to
our proprietary credit customers, with benets increasing along with
a customer’s level of spending at Macy’s. Star Rewards was introduced
successfully to former May Company customers in 2006.
Federated Logistics & Operations is realigning the company’s nationwide
network of distribution centers so each facility is regional in nature.
Goods arriving at a distribution center can be handled with high-speed
equipment, resorted and shipped to our stores within a matter of hours –
instead of days or weeks. This allows fashion goods to arrive on the sales
oor faster and facilitates increased inventory turn so our assortments
are fresher for the customer.
In addition, in spring 2007, Federated will open a new 600,000-square-
foot distribution center near Portland, TN, specically to handle orders
for our fast-growing direct-to-consumer businesses such as macys.com
and bloomingdales.com. This was part of a $130 million capital
investment in infrastructure and service improvements for these direct-
to-consumer channels.
Across the company, corporate and support functions have been fortied
to provide detail-oriented management of a larger business and to
provide data and implementation support for strategic initiatives.
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