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Can Macy’s reinvent itself effectively and in time to recapture lost brand loyalty to this iconic company?
Macy’s officials are on a mission to reinvent their loyalty marketing strategy as outlined in a recently Loyalty360 article.
Sinking sales and profits, plunging net income and same-store sales, and evolving customer shopping preferences and patterns have, unfortunately, shadowed venerable retailer Macy’s in recent years.
Macy’s held a critical Investor Meeting on June 6, accompanied by a specific slide presentation outlining its marketing reinvention agenda. During a segment of the presentation, Macy’s CMO Rich Lennox talked about the iconic brand that has 1.5 billion visits annually and more than 600 million transactions per year in-store and online.
Founded as R.H. Macy & Co. in 1858, Macy’s officials are pulling out all the loyalty marketing stops to stem the tide and start moving in a positive direction.
Is it too late? Carrie McIlveen, U.S. Director of Marketing for Metia, told Loyalty360 that as Macy’s begins to re-evaluate its loyalty plan, “it’s good to see Macy’s continues to focus on how it treats its most loyal customers.”
But, McIlveen noted, Macy’s officials must realize that loyalty involves a commitment from both sides.
“A customer’s view point on loyalty is very different from a business’s perspective,” she added. “Macy’s is on the right path of not concentrating on a rewards program, which can often be perceived as ‘bribes.’ Macy’s must tap into its emotional levers and discover what matters most to provide the greatest value. Customers are more likely to exhibit loyalty when they see a brand doing something they admire. Macy’s will then want to build its program into every touch point of the customer experience.”
Macy’s new loyalty program is set to launch in the fourth quarter of 2017 and comprises:
Tier 1 (Base Value tier): 14 percent of customers prefer over the current program
Tier 2 (Mid-value tier): 35 percent of customers prefer over the current program
Tier 3 (High-value tier): 75 percent of customers prefer over the current program and 56 percent would shop more with Macy’s overall
Guiding Principles for Macy’s Loyalty:
Simple program with clear value
Incentives that motivate changes in customer behavior
Tiered benefits that benefit our best customers
Deliver the program mobile first
Develop a loyalty program, not a rewards program
Evan Magliocca, brand marketing manager for Baesman Insights & Marketing, told Loyalty360 that most brands are going through some tough times and having some tough conversations.
“It’s encouraging to see that Macy’s understands the value of putting its customer at the forefront—not the other way around,” Magliocca explained. “It’s guiding principles for loyalty should really help the program succeed. Simplicity is so important and it’s often forgotten. It’s great to see it elevated in its approach. Mobile first is also important, but it will really come down to execution.”
What’s more, Magliocca agrees with McIlveen about the positioning of the new Macy’s loyalty program.
“It’s also promising to see Macy’s describe the revamped program as a ‘loyalty’ program, not a ‘rewards’ program,” Magliocca added. “That means Macy’s is trying to build long-term, not for the short-term benefits that put most brands in the promotional trap we see today. As always, words are great, but it really comes down to action. Macy’s long-term outlook could come down to how well this program resonates once it’s launched.”
For Macy’s, as Lennox noted, there will be 5 Big Changes:
Revitalize brand engagement
Build tentpole campaigns around the four key seasons
Establish Macy’s always-on publishing voice
Design distinct promotional event properties
Create a loyalty program; not a rewards program Stellar Loyalty CMO Narina Sippy told Loyalty360 that retailers are under pressure, period.
“But the smart ones are realizing discounts and markdowns are not the way to gain share-of-wallet,” Sippy explained. “Macy’s CMO Richard Lennox is an industry veteran who knows they need to win on customer experience. The new loyalty program is based on all the right principles. But more importantly, Macy’s is showing it understands customers want choice and frictionless experiences, from its ‘tender-neutral’ initiative for 2018 to digital coupons and payment options to online ordering and in-store pickup. These are digital innovations that will deliver meaningful improvements for Macy’s customer experience and loyalty program and, done right, can help the brand increase sales results.”
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