Macy's 2013 Annual Report Download - page 4

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• To complement store fulfillment, we continue to aggressively
expand our capacity in dedicated direct-to-customer
fulfillment centers. In 2014, we will complete the expansion
of our fulfillment megacenter in Goodyear, AZ, by 360,000
square feet to a total of 960,000 square feet, and we
announced a new 1.3 million-square-foot fulfillment center
to be built in Tulsa, OK, and opened in spring 2015. It will
be our fifth megacenter and one of the largest and most
technologically advanced fulfillment centers in America.
• Macy’s and Bloomingdale’s continue to bring new
technology-based customer tools into their stores.
Increasingly, our associates are using tablets and other
hand-held devices for selling in departments such as fine
jewelry and shoes, as well as for training and product
knowledge. Macy’s is piloting kiosks that allow us to expand
our assortment on the sales floor in key categories such as
handbags. Radio frequency identification (RFID) is helping us
to count item-level inventories more precisely. Large format
digital displays are giving our stores renewed energy. We
also are improving macys.com and bloomingdales.com with
better messaging … better search capability … enhanced
product recommendations … and increased ability for
customers to create and enable wish lists in social media. In
early 2014, Fast Company magazine named Macy’s as one
of the 10 most innovative retailers in the world!
• On the merchandising front, new brands and products were
introduced across our company in 2013, including various
new Millennial brands such as Macy’s highly successful
Maison Jules. We also infused more depth and newness in
our established, best-selling brands, including Polo Ralph
Lauren, Michael Kors, Calvin Klein, Tommy Hilfiger and I.N.C.
We began opening new athletic footwear shops in Macy’s
stores and on macys.com under a new license agreement
with Finish Line, and we signed a new license agreement
with Locker Room by LIDS, featuring localized pro and
college teamwear in stores and online. Our relationship
with LIDS debuted with a spectacular NFL teamwear shop
at Macy’s Herald Square in New York City for the 2014
Super Bowl.
• Bloomingdale’s continued to perform well in serving its
upscale customer. We expanded its store presence by
opening an outstanding new location in Glendale, CA, and
announcing future new stores in Honolulu, HI, and Miami,
FL. Bloomingdale’s Outlets, a promising format, added a
13th location in 2013.
SHAREHOLDER RETURNS
Macy’s, Inc.’s growth and development has resulted in strong
returns for our shareholders over the past four years. In fact,
total shareholder return (TSR) has far outpaced an index of retail
competitors, as well as the broader stock market. In 2013 alone,
Macy’s, Inc. shareholders saw a TSR of 37.4 percent as part of a
five-year increase of more than 540 percent.
The company’s cash dividend has quintupled over the past three
years from an annualized 20 cents per share to $1 per share. This
includes a 25 percent increase in the dividend in spring 2013.
Share buybacks have totaled $3.4 billion since our repurchase
program was resumed in the third quarter of 2011.
CONTINUOUS IMPROVEMENT
We remain committed to driving growth and continuous
improvement in 2014 and beyond. We will do so by remaining
focused on M.O.M. as our strategic roadmap. The power in
M.O.M. is how our localization, omnichannel and customer
engagement activities are closely integrated to better serve
the customer and improve business performance.
While we have seen great results from M.O.M. to date, the best
news is that we still have significant untapped opportunities
ahead. Given the pace of change and mobility in our society, we
will never be “finished” with My Macy’s. That’s because we will
always need to change and refine in lock-step with a customer
who doesn’t stand still.
Our M.O.M. strategy is enabled by a unique organizational
structure, which is unlikely to be copied by our competitors
because of the financial resources and talent required. We have
been developing M.O.M. for years, and it is an enduring formula
that we believe continues to hold significant promise.
Macy’s, Inc. today is often at the top of the list of companies cited
for excellence in bringing stores, online and mobile together
for shoppers. We have chosen this path because customers are
shopping differently today than they did just a few years ago.
We invested early and aggressively in building an omnichannel
capability – talent, technology, fulfillment capacity and
infrastructure. We had a great head start and built quickly on
our early successes. Clearly, we need to keep moving faster in
order to stay ahead.
The key to omnichannel success is the combination of the
digital world with our national portfolio of stores to make both
better shopping experiences. Indeed, we are redefining our
customers’ shopping experience.
Customer engagement through Magic Selling continues to be
very important to us, and we have expanded the mindset beyond
stores to include all customer-facing environments, such as phone,
live chat, and big-ticket delivery. We pledge to make magic in all
of our customer interactions, not just on the selling floor.
CHANGE IS EMPOWERING
Moving forward and deeper into our M.O.M. strategies isn’t
always easy because it requires change and sometimes disruption
to established ways of doing business. While unsettling to
some organizations, we at Macy’s, Inc. have found change to be
exhilarating and empowering to our organization. Pursuing new
directions requires us to think harder and dig deeper.
Thank you to our employees, vendor partners and investors for
their role in our success.
These are very exciting times and I am humbled knowing the
talent we possess at all levels of our company. The quality of our
leadership and teamwork will continue to propel us to success in
serving the needs and preferences of our customers as we strive
to deliver the right balance of fashion, newness, service and value.
Terry J. Lundgren
Chairman and Chief Executive Officer