Macy's 2011 Annual Report Download - page 4

this has created a sustainable competitive advantage for
Macy’s, and we have made significant progress over the past
three years to offer our customers the right products in the
right place at the right time.
• In late 2011, we launched a new internal initiative called “My
Macy’s 2.0.” It involves a series of targeted initiatives — each
guided by a team of our most talented executives — aimed at
further refining the way we serve local customers.
• The omnichannel strategy involves integrating our stores, the
Internet and mobile devices so we can surround our customers
at every turn and deploy all of the company’s inventory (no
matter where it may be located) to serve their needs. A pivotal
part of the omnichannel strategy is our capability to allow
associates in any store to sell a product that may be out of
stock locally by selecting merchandise from other stores or
our online fulfillment centers for shipment to the customer’s
door. Likewise, our online fulfillment centers can draw on
store inventories nationwide to fill orders that originate on the
Internet or via mobile devices.
• At the end of 2011, we had 23 Macy’s stores set up to pick
and ship orders from other stores or the Internet. By the end
of 2012, we expect to have approximately 290 Macy’s stores
set up for shipping, on top of the inventories in four primary
online fulfillment centers that will be in operation by year-end.
• We continue to experiment with a wide range of new
technologies, both in store and online, that improve the
customer shopping experience. These include using tablet
computers in selected departments in stores, piloting tap-
and-pay mobile technology, offering customers paperless
digital receipts, accelerating the adoption of QR code
technology to engage shoppers, and delivering special
offers to shoppers via Foursquare, Shopkick, Google and
Facebook, among other pervasive social media.
• Macy’s strategy of MAGIC Selling, launched two years ago,
is how we are improving customer engagement in our stores.
We train every associate to Meet and make a connection ...
Ask questions and listen ... Give options, give advice ...
Inspire to buy and Celebrate the purchase. To date, Macy’s
store associates have been through more than 1 million hours
of MAGIC training. And the results are showing in our same-
store sales growth.
• As part of the MAGIC Selling process, we are placing ever-
more emphasis on coaching of sales associates on the selling
floor by their managers. We are providing more tools, training,
resources and encouragement to the sales managers. We
rely on them to show associates — particularly new hires —
the Macy’s way for taking great care of our customer on a
consistent basis. Our Net Promoter Scores, which measure
customer satisfaction store-by-store and day-by-day, have
been rising in tandem with sales.
Macy’s continues its legacy of offering merchandise from the
best and most-wanted brands, and in providing customers
genuine value — the right combination of fashion and quality at
a good price. Much of Macy’s merchandise assortment is clearly
unique. In 2011, about 43 percent of merchandise sold at Macy’s
was exclusive or in limited distribution. This includes Macy’s
outstanding portfolio of private brands, which account for about
20 percent of sales.
We will intensify our efforts in 2012 and beyond to better serve
the needs of Millennial customers, those between the ages of
13 and 30, now our nation’s largest generation. Our plans
include re-focusing the merchandise assortments in the
mstylelab and Impulse departments so they are more exciting
and relevant to these fast-fashion customers, as well as stepping
up the shopping experience and store environments.
In early 2012, we began one of the largest capital investments
in the history of our company — the top-to-bottom renovation
of Macy’s Herald Square agship store in New York City. This
four-year, $400 million reinvention will make Herald Square the
world’s most exciting, interesting and technologically advanced
department store. In the course of the project, we will be
repurposing 100,000 square feet from offices and stockrooms to
selling space, restoring the grandeur of the building’s exterior,
creating dazzling updated presentations of new and expanded
merchandise space, and significantly expanding the men’s
store. To the delight of shoppers, we are creating the world’s
largest women’s shoe department (with 39,000 square feet of
continuous selling space), which is expected to open in fall 2012.
CONTINUED SUCCESS AT BLOOMINGDALE’S
Bloomingdale’s had another great year in 2011, with sales
growth that again compared favorably with its upscale
competitors. The brand capitalized on its strength of
showcasing top designers, including new talent making
fashion headlines. Its omnichannel strategy is helping build
a nationwide presence, serving sophisticated customers who
may not have a local Bloomingdale’s store but know and
love the brand from their travels and previous experience.
Capitalizing on the strength of smaller, carefully edited fashion
stores opened in recent years in SoHo in New York City and
Santa Monica, CA, Bloomingdale’s has announced it will open
a new store in Glendale, CA, in fall 2013, as well as a new
replacement store in Palo Alto, CA, in spring 2014.
Bloomingdale’s continues to test its outlet store concept,
which launched in 2010. We added three new outlet stores
in 2011, bringing the current store count to seven, with
another five scheduled to open in 2012.
FOCUSED ON GROWTH
Going into 2012, we at Macy’s, Inc. are fully focused on
maintaining the path of growth that has served us well over
the past three years. We believe this will be another exciting
year with significant opportunity. We are committed to
continuing to experiment, including piloting and testing
new ideas that we can scale up quickly if they are successful.
And we fully expect to maintain our leadership role in
merchandising, product development, marketing, store
management and other key aspects of the business.
Our team at Macy’s is unsurpassed in talent and in generating
tangible results. We continue to attract, retain and develop
the best people in retailing. They are energized and motivated
to leverage the momentum we have built and to continue to
break new ground in serving customer needs.
Thank you for your support.
Terry J. Lundgren
Chairman, President and Chief Executive Ofcer
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