Macy’s Blows It

Once upon a time, in the frigid upper Midwest of the U.S. lived a dearly beloved department store chain called “Dayton-Hudson.” ‘Twas a bit on the upscale side. Garrison Keillor would have called it “above average.” But the store stayed Midwestern sensible. Not like Needless Mark-up, which many around here call Neiman Marcus, or Sak’s, and I’ll refrain from repeating the reference some use. Service was excellent. Selection broad. Return policy fantastic. Extremely philanthropic in its home base of Minneapolis. After a while the chain shortened its name to Dayton’s, but everything else stayed the same.

Then three seemingly transforming events occurred. First, Dayton’s spawned chic discounter Target Stores, which grew like weeds. In fact, Target grew so fast that it left the department store side in the dust, and eventually the corporate entity became Target rather than Dayton’s. Next came the onset of the department store blahs. The whole department store industry lost its way, caught in a squeeze between discounters and more fashionable joints and not appealing to new shoppers coming of age (and into money). And then Target, now viewing its sibling as an anchor (and not the type that dominates a shopping mall), spun off Macy’s.

Transforming changes corporately, indeed, But much less so for customers, most of whom remained loyal through it all.

But even more change was in the offing. Before long, the now “divorced” Dayton’s married the venerable Marshall Field’s chain based in Chicago, also a victim of slow growth and an aging customer base. Economies of scale provided some of the rationale. But Dayton’s married Marshall Field’s primarily for its brand, which was bit more upscale than Dayton’s. So Dayton’s stores gave up their family name and morphed into Marshall Field’s.

Yet even this time, less changed than remained the same. Core customers, although whizzed over the name change, stayed loyal. They just continued saying Dayton’s. At least until the next transition.

But then along came Macy’s. Federated, the parent, actually. Federated management had this brain fart about merging the melded Marshall Field’s chain right into Macy’s. Even more economies of scale. And oh yes, the “strength” and national recognition of the Macy’s brand would certainly lift up Marshall Field’s. Yeah, right. Macy’s, known to be a step-and-a-half closer to discounters than either Dayton’s or Marshall Field’s, was going to raise Marshall Field’s fortunes by applying the more downscale Macy’s brand.

Can you believe that grown men and women actually thought this up? They must have been overdosing on brand pills. That and sitting around in a hermetically sealed capsule carefully constructed to protect them from customer infection. But it gets even worse. Sans sense of customers – and we might say without any sense at all – these retail wizards proceeded to surreptitiously bring Marshall Field’s down to Macy’s level. Of course without downscaling prices. And this included dispensing with traditional and wildly popular holiday sales that dated back to Dayton Hudson days. But hey, customers owed Macy’s a better bottom line, didn’t they?.

I swear, a whole lot of “brand strategists” must sit around, sealed in these capsules, breathing their own fumes. How would any intelligent human being with any insight into customers, customer behaviors and customer loyalties not anticipate how customers would respond?

But customers regardless, Macy’s plunged ahead. Before long, you couldn’t find a salesperson to save your life. One individual would be covering two or three departments. Get advice? Not after Macy’s let go senior employees it didn’t want to pay. Want the traditional selection? Not after Macy’s “leaned out” inventory for efficiency’s sake. Want furniture, one of Dayton’s traditional strong suits? Not when the remaining staff doesn’t know which end of a sofa is up (and we now hear from inside that Macy’s has so mismanaged furniture – a business where it has no prior experience – that Dayton’s or whatever’s once dominant furniture centers will soon be history. And community service? “How do you spell that?”

So what happened? Just the obvious. Lots of core customers voted with their feet. And Macy’s lacks a source of new customers to replace them. So now rumors of divestitures, store shut-downs, etc. are swirling about. Hey, could Macy’s strategy really be to bring back the traditional holiday sales, now that they’re sorely missed, as going-out-of-business sales?

Sure, long-time customers still return for this or that or in hopes of finding merchandise lines they’ve grown attached to. But many also hold their noses when they enter.

Hey, I was never an avid Dayton’s fan. And I didn’t like the name change to Marshall Field’s. But I deeply appreciate and respect the powerful bond Dayton-Hudson and pre-Macy’s successors built with so many customers.

But Macy’s didn’t. And as if we need it, we have yet one more example proving that making critical business decisions without first consulting customers brings on self-inflicted injuries. An increasing number of which are fatal.