The Company’s target customer profiles and strategies
Customers Profiles
Macy’s offers high-end customers an assortment of well-established brands, for example, Chanel, Burberry, Armani, Gucci, Louis Vuitton, David Yurman, Prada, John Varvatos, and Christ Jimmy through its stores under the Bloomingdale’s brand. These brands have enabled the company to offer a blend of products that every customer would find at least one brand to resonate with. The customer profile for Macy’s brand stores are categorized into three customer segments:
American middle class:
- Who have preference to products of quality and reasonable prices.
- Are highly informed of trending items in the market.
- Class oriented
2. Macy’s is focusing to capture the fast-growing Hispanic market:
- Macy’s targets the 17% composition of the American population by offering the Thalia Sodi fashion.
- They are fashion oriented
- The retailer has plans to introduce this population’s line of shoes, jewelry and apparel.
3. Millennials
- It targets individuals between the ages of 16-34.
-The report given by Boston Consulting Group (BCG) revealed that the Millennials accounted for $1.3 trillion in an annual spending.
-The millennials target market is considered to be highly informed through digital networks through which they closely follow their products and brands.
Macy’s has launched various collections specifically for the Millennials, which include Maison Jules, Bar III Carnaby, and QMack (Pease 172; Thorson and Duffy 76). Capturing the attention of the fickle millennial is a step that Macy’s has given a strategic approach since this category of young shoppers has a tendency of constantly changing their minds on what they perceive to be cool.
How Macy’s Segments and Targets its Customers
Macy’s Corporation has sufficiently targeted its customer base of women aged between 25 and 54 as it gives emphasis on the “affordable fashion.” It also gives considerable attention to increase its sales to teens particularly with its home furnishing stores.
Macy’s customers segmentation within the industry takes the framework of a 5-market segmentation, including, high-end luxury, high-end general, upper-middle, low-middle, and the low-end. The company finds it difficult to launch into any other market segments overnight without formulating a workable strategy which does not negatively impact on its market share, revenue generation, retention of the loyalty of suppliers and customers, and brand image.
Macy’s evaluate and categorize the potential and commercial attractiveness of the various segments on the basis that the market should be large enough to justify segmenting, existence of measurable differences between the various segments, the projected profits should exceed the costs of any other additional marketing plans and other charges. Moreover, the corporation looks into how each of the segments is accessible to its team, and places lots of focus on the different benefits that the company would derive from the various segments (Thorson and Margaret 456).
The Strategies Macy’s Currently Uses
A critical aspect of Macy’s success is attributed to its disciplined and consistent execution of its key strategy of My Macy’s localization, Omnichannel integration and Magic Selling customer engagement (M.O.M).
The M.O.M has remained the blueprint that Macy’s brand holds on to-date –with every aspect of the strategy offering a holistic approach to their customers preferences. The various elements of the company’s M.O.M strategy support and feed each other. The company has been so proficient at incorporating what they have learnt in the process of doing business in order to improve their relationship with the customers on a continuous basis. They forge to move on-ward with fresh thinking.
My Macy’s localization strategy has remained a differentiator and offered a sustainable competitive benefit for Macy’s. This strategy has ensured the company continuously delivers a shopping experience and merchandise assortment in every location with an aim of meeting the needs of the local customers (Weinstein 279). They have renewed their approach on localization by giving emphasis on the accelerating sales growth on the basis of a process which is streamlined and leading to faster decision making. The second segment of the MOM strategy is the Omnichannel which virtually gives the company’s customers access to its inventory through different channels.
Are the strategies working?
The MOM strategy has proved successful to the company since its inception. The strategy ensures that every district is assigned a team of planners/merchants who are tasked with identifying what the customers in a particular region are looking for, the kind of items they might need in the future vis a vis the quantity they are likely to ask for (Michman and Alan 378). The process has enable the company to formulate better strategies towards successfully attaining greater profit margin and customers’ satisfaction.
The New Strategy for Macy’s
The company needs to develop a workable strategy that would optimize on its prospects. It needs to formulate a “Go back to the basics” strategy. This would make it analyze the different frontiers of its business operations from roots and thus be able to forge greater standards of curbing the challenges (Weinstein 245). This strategy is most appropriate for the company since its experts in strategic management came to consensus that its traditional department store concept was either declining or at a mature stage and thus implementing such a strategy would enable it reposition and remain a brand entity to its customers.
Works cited
Grippo, Robert M. Macy's: The Store, the Star, the Story. Garden City Park, NY: Square One Publishers, 2009. Print.
Michman, Ronald D, and Alan J. Greco. Retailing Triumphs and Blunders: Victims of Competition in the New Age of Marketing Management. Westport, Conn: Quorum Books, 2014. Print.
Pease, Pamela. Macy's on Parade!: A Pop-Up Book for Children of All Ages. Chapel Hill: Paintbox Press, 2012. Print.
Thorson, Esther, and Margaret Duffy. Advertising Age: The Principles of Advertising and Marketing Communication at Work. Mason, OH: South-Western Cengage Learning, 2012. Print.
Weinstein, Art. Market Segmentation: Using Demographics, Psychographics, and Other Segmentation Techniques to Uncover and Exploit New Markets. Chicago, Ill: Probus Pub. Co, 2011. Print.
