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Merchandise Strategies
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Macy's is one of the oldest department stores in the United States and an iconic retailing
brand. It operates 810 stores nationwide and offers a huge array of top brands in all
retailing categories. Events like the Macy's
Thanksgiving Day parade, 4th of July
Fireworks, holiday traditions, and celebrity
appearances all contribute to the nationwide
recognition of the Macy's name.
About Macys
Number of Stores: 851
Store Gross Sq. Ft.: 154,400,000
Total States: 45 (plus District of Columbia, Guan, and Puerto Rico)
Total Number of Employees: 166,000
{Information as of April, 2011, except for number of employees, which is as of January
29, 2011.}
Macy's and Bloomingdale's (a more upscale department store) sell men's, women's and
children's apparel and accessories, cosmetics and home furnishings. Aside from its brick-
and-mortar stores, Macy's also operates macys.com, bloomingdales.com and
Bloomingdale's by Mail in addition to an online bridal registry. Macy's portfolio of 15
private labels include: Alfani (offers modern separates with a clean, feminine sensibility
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and a refined fit), American Rag Cie
(young, fashion-forward line of denim and
separates), bar III (the newest major
addition to the private brand portfolio),
Charter Club (classic, all-American style in women’s ready-to-wear and home
collections), Club Room (features classic American menswear for weekend or business
casual occasions and tailored suit separates for the career-oriented professional), Epic
Threads (designed for teens who want cool, original clothing that expresses their
personality), First Impressions (classic clothing for newborns and infants is defined by
fine fabrics and time-honored details), Giani Bernini (attracts a traditional customer who
recognizes quality), INC International Concepts (trend-right sportswear designed to
add freshness and fun to the fashionable woman’s wardrobe), Jenni by Jennifer Moore
(stand out as the choice for the young, fashionable customer, featuring a bright and
cheerful selection of pajamas, loungewear and lingerie), JM Collection (designed for the
woman who wants versatile, work-to-weekend clothes at an affordable price), Style&Co.
(designed for the busy woman with an easy, modern sense of style, this brand offers a
versatile collection of fashionable sportswear and stylish accessories that transition from
home to work to weekend.), Tasso Elba (elegant and refined, this brand of European-
inspired classic menswear, designed for the more traditional customer, who expects the
best in investment dressing), Hotel Collection (offers high thread-count sheets and
luxurious fabrics for the customer who appreciates quality and modern design), and
Tools of the Trade (with more than 20 years of success, is designed to provide high
performance at a reasonable price). These brands are only available at Macy's.
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About Private Label Brands
Private label brands are clothing lines whose design, production and distribution are
controlled by the retailer itself. They are especially popular in department stores such as
Macy's, JCPenney, and Saks. Private brands are an attractive choice for the retailer
because they can produce exactly the pieces they want instead of looking for them among
their suppliers. In addition, they have control over the quality and fabrication of garments
under those lines so they are more able to control the costs of the goods. In addition,
since they are produced and sold directly to the consumer, private brands are usually less
expensive than brands from third-party companies. The lower price point makes private
brands more attractive to low-income consumers as well as those hoping to curb their
spending due to poor economic conditions. According to The Nielsen Co., private label
sales have been increasing since the recession began and captured a high share of many
departments of retail stores studied.
Private brands have been receiving increased attention from retailers due to the increased
control they have over the production and distribution of their own line. Also, they tend
to have a higher profit margin than third-party goods. This has impacted Macy's product
mix as retailers move towards increasing private brand offerings.
Macy’s Competitors
Macy’s faces strong competition in the retail industry from other retailers in their
geographic areas, including other traditional, moderate or luxury department stores,
specialty stores, general merchandise stores, off-price and discount stores and other forms
of shopping including the internet, mail order catalogs and television. Retailers
competing with Macy’s include:
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• Other traditional department stores such as: Bon-Ton Stores, Belk, Dillard's, and
Sak’s Department Store Group
• Moderately priced department stores that have lower gross margins than
traditional stores like Macy’s. These include: J.C. Penney, Kohl's, and Sears
Holdings
• Luxury department stores such as: Neiman Marcus, Nordstrom and Saks
• Discount stores such as: Target and Wal-Mart Stores.
• Warehouse stores such as: BJ's Wholesale Club Costco Wholesale and Wal-
Mart's Sam's Club.
• Off-Price stores such as: Ross Stores and TJX Companies
In terms of price point, Macy's faces stiffest
competition from JCPenney and Sears Holdings.
Luxury department stores such as Saks operate at a
higher price point, attracting a clientele with more
disposable income. Discount stores operate at a much
lower price point, attracting less affluent consumers.
Macy's is distinct from warehouse stores in that it does
not sell goods in bulk and operates at a higher price
point.
Thesis
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To continue to build company value by offering a new private label, the GOOD
NEIGHBOR® collection, a green retail strategy that will benefit vendors that comply
with a sustainable production sourcing code of conduct.
Branding and Positioning
GOOD NEIGHBOR® is part of Macy’s private label. As the name says,
the GOOD NEIGHBOR® logo means being a Samaritan, a do-gooder, a
helping hand, or a humanitarian. The typeface used was Courier New,
and the hue palette chosen is Pantone Solid #105. The GOOD NEIGHBOR® collection
will feature organic t-shirts made of 100% organic cotton. Macy’s views the green private
label as a way to show its appreciation for
the communities where Macy’s does
business.
The merchandise will be purchased from
Anvil Knitwear®, a 130-year-old
sportswear apparel brand, which will help to present a distinctive assortment line of
unique merchandise.
“Anvil's commitment to sustainability is comprised of three pillars: environmental, social
and product. In recent years, the company has rolled out 17 industry-leading, affordable
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eco styles, made from a variety of fibers including certified organic cotton, transitional
cotton, recycled cotton and recycled PET bottles in addition to its more than 100
traditional styles that are all manufactured using responsible practices. Anvil's organic
products are part of its larger commitment to growing the acreage of U.S. organic
cotton; the company is currently the largest buyer of U.S. — grown organic cotton
according to Organic Exchange.”
Due to the fact that Macy’s is a top retailer in the US, Macy’s understands that
sustainability is more than a matter of customer satisfaction. Macy’s believes this is the
right thing to do.
"Corporate engagement is essential to the international community's efforts to alleviate
poverty, ensure clean water, and help underserved populations realize healthy living,"
said Amir Dossal, Executive Director of UNOP. "We want to recognize the creativity,
technology and resources that Anvil and the other honorees bring to our collective efforts
in solving social problems."
Like Macy’s, Disney Stores LLC has also participated in the sustainable movement and
formed a partnership with Anvil Knitwear to make all of its graphic T-shirts with 100
percent certified organic cotton. For a retailer like Macy’s, this partnership/initiative
would be groundbreaking in introducing a sustainable product to the mass market. Like
Wallmart, Macy’s dominates the US market with the amount of stores locations. It will
be a great strategy to help local farmers, educate the consumers, and bring value to the
company. Macy’s wants to be the pioneer and wants to start ‘pushing’ the retail industry
to be more sustainable.
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About Anvil Knitwear
“Anvil Holdings Inc., which operates primarily
through its Anvil Knitwear unit, makes active wear for
men, women, and children that the company sells to
screen printers, private-label brand owners, and distributors in the US. It's also a leader
in eco-friendly, sustainable apparel, primarily consisting of short- and long-sleeve T-
shirts. Anvil also makes bags, caps, robes, and towels. Before they're purchased,
oftentimes its products are embellished with characters, designs, or logos. Brands
include Anvil Logo, AnvilOrganic, chromaZONE by Anvil, and Cotton Deluxe Towels
Plus by Anvil, as well as private labels for other companies.”
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Functional: It brings a contemporary and stylish look for the eco-conscious customers
and it’s also 100% free of chemicals and pesticides.
Innovative: Smart design, eco-friendly materials and simple care, styles to wear for more
than one season
Sustainable: Made of 100% organic cotton
Personality: Contemporary, cool, minimalist, modern, and timeless.
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Customer Analysis
The younger generation is equal parts expression, consumer, and world changer.
Because Macy’s is located in the most diverse markets in the nation, the target market
varies. This generation, also known as Generation Y and Echo Boomers, is consisted of
young men and woman, youngsters who like to shop, socialize, and save the world all at
the same time. These individuals are creative trendsetters that are socially aware or are
becoming more socially active. They are also technologically savvy and are up to date
with online and other electronic trends. They live an artistic lifestyle full of self-
expression. They are not afraid of expressing their individuality through their own unique
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outlets like: sports, drawing, music, dance, or charity work. They are civic-minded and
socially conscious individuals, who place a high value on inner and outer appearance and
want to be stylish, original, eco-chic, mainstream, and to look, feel and be at their best.
They are in their mid-20s and younger; with a median income of $70,000.
“By merchandising and marketing to the college crowd, retailers are hoping to not only
boost this year’s sales but also to gain customers for life.”
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Action Point #1
The goal of this strategy is to differentiate GOOD NEIGHBOR® in the mind of our
target market by promoting the story that comes along with a stylish t-shirts. The target
market is 10 – mid 20’s students and professionals, who are concerned with style and
social justice. The focus will be on promoting the
fact that GOOD NEIGHBOR®’s t-shirts can be
trackable. The graphic T-shirts will show complete
traceability from farm to retailer through
trackmytee.com. The shirt tags will have the web
address and the code number needed for the website.
Macy’s main goal is to educate the consumers, what
they can do to help, and engage with the brand.
Merchandise Assortment
Macy’s plans to ‘roll-out’ this concept throughout the country, but to focus on a limited
assortment of merchandise – focusing exclusively on graphic tees. The assortment will
be organized by colors and sub-divided by sizes in each category: women, men, and kids.
To drive initial demand and interest in the new concept, Macy’s will partner with well-
known musicians, actors, and artists that are active in the green movement. The t-shirts
will feature graphics and artistic illustrations by these contributors, and be produced in
limited runs of 10 k units for each design and sold for a limited amount of time. Macy’s
will charge a slight premium for the limited edition tees produced by the celebrity
partners. In addition, Macy’s in-house team of graphic designers will produce a line of
fashion styles that will have larger production runs, but get refreshed each season.
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The section where GOOD NEIGHBOR® will be allocated within Macy’s has to reflect
GOOD NEIGHBOR®’s values and the environmental commitment to the brand. All
furniture must be made with high quality and durable materials, using reclaimed wood or
from certified harvested wood. This section within Macy’s has to be different from the
others; it must reflect a rustic appearance befitting the brand’s earthy origins. Since all
stages are designed to accommodate the space in which they are located, t-shirts must be
displayed and organized in mannequins, impact tables, and in display fixtures.
Action Point #2
In-store communication:
Furniture: seats: without hanging part “poufs”;
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Tables: Square and rectangular (different heights can slide into each other)
Small rectangular tables;
Materials:
Wood: table, hangers;
Suede: poufs and carpet;
Visual Merchandizing:
Amount of garments: 3 – 4
of each (XS, small, Medium,
Large, XL);
Folding: All t-shirts are
folded in three parts;
Table Display: used for the
limited edition t-shirts to be displayed;
Display: mannequins, impact tables, and displays;
Interior Design:
Lighting: standing mirror on each side of the main table;
On the table there will be lights with fabric around them, which are soft;
Ceiling: sets of small and large lights all over the ceiling to create an atmosphere, and
lighting on the mannequins and t-shirts;
Use of white space: GOOD NEIGHBOR®‘s bright t-shirts will play in a simplified
white background. This sophisticated combination is appropriate for the brand’s
environmental message of simplicity and emphasizes the clothing itself.
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Colors:
Because our target market is young, most of the brand messaging primary colors of t-
shirts are bright colors as well as natural, or earth tone hues.
Imagery:
Kids
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Imagery:
Adults
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Merchandise Promotion
In order to stay ahead of the competitors and to gain loyalty with its consumers, Macy’s
will create a portfolio of decorated t-shirts and products in partnership with various
leading non-profit organizations, musicians, and artists. These organizations and
individuals will then use our products as fundraisers, in some cases selling them at retail
with a portion of the profit going to the cause.
Action Point #3
Each season, Macy’s will offer a new and updated line of both fashion and limited edition
tees. The limited edition series will crate a ‘Halo Effect' for the fashion line produced by
Macy's in-house graphic designers. Macy’s will attempt to reinforce its Customer
Relationship Management (CRM) program by notifying its Macy’s card-holders that a
new edition of limited GOOD NEIGHBOR® tees is being released and also by allowing
them to pre-purchase them at a slight discount before they are available to the general
public. This program will help build loyalty to the collection and help promote online
sharing via blogs, customer feedback postings, or tweets. The most loyal GOOD
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NEIGHBOR® customers will also be eligible for other special discounts and be invited
to select in-store events such as fashion shows, or celebrity appearances.
S/S 12 Mood Board:
Directional trends for spring and summer 2012.
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Thank You
###
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Citation
Page: 5
www.macys.com
Page: 7
http://www.fibre2fashion.com/news/garment-company-
news/newsdetails.aspx?news_id=92211
Page: 8
www.anvilknitwear.com (image)
www.hoovers.com
Page: 11
http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=165
Page: 6, 12, 13, 14, 14, and 16 (images)
http://www.anvilmarketingtools.com
Page: 18 and 19 (images)
http://www.stylesight.com