Despite a less than stellar second quarter financial performance – total sales decreased less than 1%, to $6.06 billion – Macy’s Chairman, President and CEO Terry Lundgren is confident that the company’s two main customer engagement strategies will stem the tide.
Those two strategies are My Macy’s localization initiative, which launched nationwide in 2009, and 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 they previously did.
Lundgren said during a conference call to discuss the company’s second-quarter financial results that the fiscal performance for the period was disappointing.
“Our performance in the period, in part, reflects consumers' continuing uncertainty about spending on discretionary items in the current economic environment,” Lundgren said during the call. “After a cool spring, we have taken appropriate markdowns and customers are responding favorably.”
Heading into the third quarter, Lundgren is abundantly confident that My Macy’s and Magic Selling will lead the way to a return to profitability.
“We believe we have the right strategies in place at Macy's and Bloomingdale's, particularly in the omnichannel and online initiatives that are driving our business to a new level of shopping accessibility for our customer,” Lundgren explained. “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."
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 omnichannel integration and emphasized associate training.
When Macy's rolled out the My Macy's localization initiative across the country 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.
The new training program, dubbed "Magic Selling," 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 they did under the old program.
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.