By  on November 2, 2010

Macy’s Inc. is attacking a persistent shortfall — servicing the customer.

“We’re reaching an entire new level of servicing the customer,” Terry Lundgren, chairman, chief executive officer and president, said Monday during a whirlwind presentation themed “Reimagining Macy’s” to cater to the “omni-channel customer.”

Lundgren said that among other strategies, Macy’s is more closely tracking consumer shopping patterns and purchases through new technology, including point-of-sale equipment, and testing ShopKick, a system that tracks consumers through GPS as they move from department to department on the selling floors.

“We do know who you are and where you’ve been,” Lundgren said, though ShopKick is an opt-in system avoiding privacy issues by obtaining the permission of the consumer being tracked.

The retailer has long been criticized for poor service and having a mass appeal without sufficiently mining customer predilections, though Lundgren said recent initiatives have led to improved results.

He talked up the “My Macy’s” field organization of planners and buyers, as he’s done in previous public presentations. He reiterated how the team can get a close read on consumer preferences at each store, and merchandise accordingly, citing the limited “span of control” over 10 stores generally that the planners and buyers have.

“That’s the beauty,” he said. “They know the sales associates. They know the customers. It’s not even about your store. It’s about the customers in your stores. It’s such a huge advantage to have that stream of information, and we’ve only been at this for 18 months.…My Macy’s is the largest organizational change in the past 50 years of this company.”

Among the key points of the presentation were:

• Retraining sales associates to sharpen their selling techniques and methods on how to approach and engage customers. Lundgren said the initiative, which launched last summer, is the “largest training program” ever at Macy’s. For the holiday season, Macy’s is hiring an extra 65,000 seasonal workers on top of the 130,000 sales associates already employed.

• Integrating the brand into social media and pop culture to a greater degree. Macy’s place in digital space “will grow significantly,” Lundgren said.

• Engaging shoppers with humorous advertising that includes celebrities such as Martha Stewart and Donald Trump, who sell their signature merchandise exclusively to Macy’s.

• Staging interactive events in the store, including Clinton Kelly’s “Make Over America” tours, where the star of the TV show “What Not to Wear” assists shoppers in fashion decisions.

• Expanding the inventory network so stores and direct channels work together to fill consumer demands and orders.

“The customer who shops all channels or multiple channels is five times more valuable,” Lundgren said. “We start with the customer at the center of all our decision-making processes. Everybody is talking about engaging with customers. We’ve done that pretty well at Bloomingdale’s. But it’s actually easier to do with 42 stores,” that the Bloomingdale’s division operates, compared with the 810 Macy’s units. “It’s much more complicated with a bigger customer base, but we are very committed to doing that. We don’t think it’s an impossible task. It’s all about being focused on individual customers.”

Lundgren began his presentation by outlining organizational and cultural changes at Macy’s in the past six years, including the May Department Stores Co. acquisition in 2005 that doubled the store count, the subsequent centralization putting all the stores under Macy’s nameplate, and the formation of My Macy’s. He said the efforts to embrace consumers and identify what they want have led to gradually improving results this year.

This week, Macy’s will distribute a catalogue to five million customers, but in 30,000 different versions. The customized catalogues are the products of “tremendous research” into purchasing patterns, Lundgren said. A similar process of tailoring to customers’ needs will eventually be applied to “It’s coming. It will be very specific and targeted to you,” Lundgren said.

The Macy’s chief also said the Material Girl exclusive line, driven by Madonna and her daughter, Lourdes, and launched this fall, is a “monstrous success done without traditional media. It’s all done with social media.” When Madonna and her daughter appeared in the store for the launch, 10,000 people waited outside to catch a glimpse. “It was the biggest crowd [at Macy’s] for any event.…The whole idea of exclusive and limited brands is the biggest of all ideas,” Lundgren said.

The strategy represented more than 40 percent of the Macy’s business last year, though Lundgren said he’s putting no ceiling or goal on the percentage.

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