When Macy’s Chairman, President and CEO Terry Lundgren discussed the company’s less-than-stellar second-quarter financial results in August, he was supremely confident that the company’s two main customer engagement strategies – My Macy’s and Magic Selling – would spearhead a more promising second half of the year.
Lundgren’s words proved prophetic. Company sales in the third quarter rose 3.3%, to $6.276 billion, and earnings soared 31%, to 47 cents per share.
“We were able to achieve a very successful third quarter of 2013, despite the tepid economic climate,” Lundgren said during a conference call. “This was our 15thconsecutive quarter of improved earnings per share. Comparable sales rose by 3.5% in the quarter and, together with sales from departments licensed to third parties, were up 4.6%. Our improved sales performance resulted from continued success in the execution of our key strategies – My Macy’s localization, omni-channel integration, and Magic Selling customer engagement.”
It’s interesting to take a look back at Lundgren’s prescient words during the conference call to discuss second-quarter financial results in August.
“We believe we have the right strategies in place at Macy’s and Bloomingdale’s, particularly in the omni-channel and online initiatives that are driving our business to a new level of shopping accessibility for our customer,” Lundgren explained in August. “Our My Macy’s localization and Magic Selling customer engagement strategies continue to differentiate the Macy's shopping experience. We have dissected the fall calendar and related merchandise strategies for the second half, and we remain confident about our prospects for growth in the remainder of the year.”
Magic Selling which requires new sales associates to attend a three-and-a-half-hour session when they start at the company, as opposed to watching a 90-minute interactive video in a booth, as associates previously did. It also includes seasonal refresher courses and coaching from managers while they are on the sales floor. To monitor their progress and set quantifiable goals, associates receive weekly scorecards.
What’s more, Magic Selling also includes seasonal refresher courses and coaching from managers while they are on the sales floor. Under Macy's previous sales training program, associates were given scripted steps in making a sale, such as smiling, thanking the customer, and always using the word “outstanding.”
Under Magic -- an acronym which stands for Meet and make a connection; Ask questions and listen; Give options and give advice; Inspire to buy; and Celebrate the purchase -- sales associates are instructed to make more natural connections with shoppers.
As part of the My Macy’s customer engagement tool, Macy’s identified its best customers and focused on developing and retaining their loyals -- the shoppers who buy and visit most frequently. To truly personalize the experience, the company has implemented the My Macy’s store localization model, focused on omni-channel integration and emphasized associate training.
When Macy’s rolled out the My Macy’s localization initiative nationwide in 2009, it created eight stores regions and 49 new districts. What’s more, Macy’s added human intelligence - including new district merchants and planners - in each district in a manner that enables the company to tailor merchandise assortments and the shopping experience by location. During that first year in 2009, all of the company’s top 12 markets in sales growth were from the initial My Macy’s pilot districts.
My Macy’s was developed and based on customer research, as well as input from Macy's store managers, senior division executives, merchandise vendors, and industry experts. Its goal is to accelerate sales growth in existing locations by ensuring that core customers surrounding each Macy’s store find merchandise assortments, sizes, and experiences that are custom-tailored to their needs.