By  on April 9, 2010

TUCSON, Ariz. — Describing 2009 as “a year to forget,” Terry J. Lundgren, chairman, president and chief executive officer of Macy’s Inc., said Thursday that innovation is essential to deal with the challenges facing retailers.

“Innovation is moving us forward,” he said at the opening of the 14th annual Global Retailing Conference here, presented by the University of Arizona’s Terry J. Lundgren Center for Retailing. “All the people gathered here today share that goal.”

The two-day meeting includes top executives such as Wes Card, president and ceo of Jones Apparel Group Inc.; Matthew Rubel, chairman, president and ceo of Payless ShoeSource parent Collective Brands Inc.; Wesley McDonald, executive vice president and chief financial officer of Kohl’s Corp.; Stephen Quinn, chief marketing officer of Wal-Mart Stores Inc.; Tom Julian, president of the Tom Julian Group brand consultancy, and designer Rachel Roy.

Lundgren said Macy’s “saw the writing on the wall” as the global financial crisis gathered force in 2008 and sought to “take all of our new programs and implement them in 2009 in the event that the consumer comes back in 2010.” Despite the signs of increased consumer spending, Lundgren cited the nation’s 9.7 percent unemployment rate and characterized the economic upturn as a “jobless recovery.”

“Our industry represents one in five jobs in America ,and if we are not hiring in a significant way, then how can America be hiring?” he said.

Macy’s multiyear consolidation, going from 13 regional department store divisions down to one centralized national chain, was a cost-cutting measure, exemplifying the need to do more with less. But Lundgren called the creation of the My Macy’s organization, forming 1,600 new buying and planning positions in 69 districts to keep closer tabs on consumers and to better meet local needs, a risk that paid off.

“There’s no technology that tells you what customers don’t have, so we used our buyer and planner talent to our advantage,” he said.

The conference opened as March comparable-store sales gains reached 9.1 percent, according to Thomson Reuters, the strongest advance since it began tracking the metric in 2000 and boosted by pent-up demand for new fashion, weak year-ago comparisons and other factors.

Among the key changes that have propelled Macy’s are identifying merchandise voids, responding with exclusive lines such as Rachel by Rachel Roy and Kenneth Cole Reaction and using technology to streamline operations, Lundgren said. Regarding areas of growth, he pointed to young women’s and men’s categories and new partnerships such as the Madonna-Iconix Brand Group Inc.’s joint venture, Material Girl, launching at Macy’s in August.

“We’ll continue to look for those exclusives, but it has to be a combination of design sensibility and production capabilities,” Lundgren said. “There definitely will be more to come.”

Quinn and Rubel emphasized the importance of connecting with customers and defining brand image through new marketing strategies.

“Not only are retailers getting more savvy about marketing, but marketers are also going through their own changes,” Quinn said. “We’ve had to adapt to the digital world, creating an extreme transparency. Our philosophy is, ‘We’re already naked, so we might as well be buff.’”

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