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After his keynote on how Macy’s is integrating the web and stores, Terry Lundgren sat down with NRF President and CEO Tracy Mullin to answer questions that had been submitted from attendees in advance. Here’s what he had to say about…
Macy’s foray into global retailing:
In February of next year, we’re opening our first international Bloomingdale’s in Dubai. This will get our toe in the water on the subject of international expansion. We’re doing exploratory work and we’ll get our first sense of it in February. You can argue that the timing is not perfect but of course, these decisions are made years in advance. I think the same is true now – if you make a decision today that you want to open a store in some other country, you’re looking at 2-3 years from now. You must be looking forward to possibilities. In our case, international expansion is one of the topics on our mind.
The importance of rallying around a cause:
You can’t do a bazillion campaigns – you have to pick your shots. We ask our customers and our employees and try to zero in. We did some focus on Earth Day and breast cancer has been a big issue for us. Over the last 12 months, we’ve raised $4 million for national parks association, $6.5 million for Reading is Fundamental, and our Make-A-Wish “Believe” campaign from last holiday season raised over $8 million in the last year.
I think it’s important because a lot of these nonprofits are really hurting right now. For the Come Together campaign specifically, we learned that the food lines are growing by 30% in America. People are showing up [to food banks] in suits and career apparel…pounding the streets, trying to get a job.
These subjects are important. I think doing them right, picking your shots and doing them big is the way to go.
His “trigger moment” on the purpose and power of the Internet:
I made zero money on the rush before 2000 when internet stocks were going like crazy. I really honestly did not get it. I just said, “How do you have a sustained business model that doesn’t make any money?” There wasn’t a business model that made any sense. At that point, it was books and CDs. I would say that I had my intentions but I knew a different kind of business model had to occur. Of course that’s happened.
About eight years ago, I was speaking at an NRF conference in New York and I was asked a question from the audience. I’ll never forget this guy – he was a retailer and he said, “don’t you worry that by focusing on macys.com that your customers will start shopping there instead of your stores?”
“No!” I said. “What I’m worried about is that they’re going to shop somewhere else online and not with me. That’s what I worry about.”
There’s definitely a consumer who loves to shop online, and we’re not going to move her. So I’d say about 8 years ago, I put the gauntlet down and said, “we’re not just going to be into this, we’re going to be aggressive.” And I feel really good about all that we’ve built.
Why he doesn’t tweet:
About nine months ago I registered but I’ve intentionally never tweeted. I think that it’s fascinating first of all to watch people who apparently have all this time. I don’t.
Whether Twitter is here to stay:
I think it will be here to stay if it remains authentic. I worry that some of the people you follow are busy. I worry that the authenticity gets lost.
His philosophy on negative reviews:
If you start getting bad reviews on a particular product…guess what? The product is bad! It’s not the customer.
To me, all product reviews are good. When they’re bad, you have to get it off the site, get rid of the product. We do that.
Macy’s localization approach:
I think the biggest change we’ve undertaken is consolidating to one organization structure based in New York City but supplementing needs with 69 districts around the country. We have 17-20 people living and working in 69 cities, they supervise 10-11 stores. They’re in each of those 10 stores every other week. That’s when we’re getting close to our customer. Feeding that information through the technology we’ve developed is gigantic. I’m just so confident that’s going to pay dividends as we begin to execute over the course of time. In the 20 cities we localized a year ago in May, those stores are out-performing the rest of the country. To me, that’s the biggest transformational change we’ve made.
Whether the customer has fundamentally changed:
That’s a big question. I don’t know the answer and you don’t either. We’re going to look back at this time and say how great this was that we were in this era. People will say the economy is bad in 2021 and you’ll be able to say, “Well, I remember back in 2009…now that was a tough year.” You’ll be able to say you got through that.
I think the customer clearly changed this past year. Think about the Lehman Brothers collapse, the beginning of the end of the world. Shortly after that, retail was clearly affected. Consumers figured out this was not a short-term issue. It did have a fundamental change on the way people felt about job security and personal wealth, whatever income bracket they were in.
Historically, consumers have returned to their shopping habits of the past. They like the quality of the clothes they’re wearing, they like the brands, the handbags that they’ve carried. Historically, they have come back over time. Of course everybody’s questioning whether this will be that same experience or not. You can predict all you want, but none of you know.
What we have to do is adjust to how she does choose to shop. In stores like ours, I do think that we can win both ways. We can win over the customer who is trading down or can win over a customer with a brand like Coach and its Poppy collection.
If department stores are dead:
When I graduated from college at the University of Arizona, I decided to take this job at Bullock’s, and a professor said, “Aren’t department stores dead?” That was 1975.
The business we’re in is challenging and I believe there’s going to be a market share challenge for the next year to 18 months. There’s no reason to believe there’s going to be a hockey stick rebound for our economy because the jobs aren’t there to support that kind of growth. But I do believe that a department store that offers all of the convenience and is focused on obvious value not only can survive but also has a chance to thrive in the future.
Of what he’s most proud:
After being with Bullock’s for a year and a half, I was hand-writing transfers from one store to another and I was really bored. And so I went to the head of HR and I said to Gene Ross, “listen I’m bored to death.” He had this sign in his office that said, “Bloom where you are planted” – which I took to mean, basically, shut up and get back to work. I can honestly say that ever since that moment, my perspective changed. I focused on the job I was in instead of focusing on my next job, and things just kind of worked for me.
But the bigger your job gets, the more you get the credit. I have a great team and the only way you can get things done is to surround yourself with really great people. I am super-fortunate to have a team of hard-working people and I’m most proud of that.
One Comment
Macy’s would be well suited to take this opportunity in the economy and focus on there training and development initiatives. We all know that customers want (1) great merchandise, (2) priced right and (3) well trained sales people to assist them when needed. The brand identity of your business is typically created by the very best, brightest and most talented resources within your company. This group will typically have many years of education, training and hands on expertise in their fields, and the brand will usually reflect this excellence. Those individuals that are most directly responsible for presenting your brand on a regular basis to your customers will typically have much less expertise, training or experience in their given field. Having the right process, systems, technology, marketing and product are key drivers for any successful business. Having your locations staffed with the right people, with the right amount of skill, are equally important to move all the strategies and tactics forward.
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