A Partnership or Collaboration

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Updated: Jun 29, 2022
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Macy’s Inc, one of the world’s largest premier department stores, has faced a crisis and needs a marketing strategic plan to recover. Through the years, the brick and mortar retailer has shown valiant efforts for improving sales and performance, but the results did not match up. Recently, Macy’s sales have fallen, and the company has struggled strategically and financially. A journal by Ivey Publishing highlighted that “at the beginning of 2017, Macy’s had announced a plan to close about 100 stores over the year due to poor sales, but this plan did not solve all the problems the company faced” (Oh 1). After reading the article, it was crucial to decide what were these problems? Macy’s suffered from performance decline, organizational decline, and competitive challenges. Some examples of the issues Macy’s faced included: sales and stock prices dropped, disorganized store, and the treat of off-price rivals and online competition present in the world today (Oh).

Macy’s biggest problem was that the company did not know how to react to the constantly changing trends which lead to a downfall for the company. Did this mean that Macy’s was a retail store of the history or is there a way that this could have been turned around? Luckily, Macy’s can recover from this crisis with three strategies. The first strategy is to develop more exclusive “Macy’s” brand apparel; the second strategy will be to cut down on “discounts” and finally, the last strategy is creating a partnership with affordable luxury brands. The following paragraphs explain how each of these strategies can help Macy’s recover and stay as one of the world’s largest department stores.

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Firstly, Macy’s needs to innovate and focus on creating one or more exclusive “Macy’s” lines to sell in the stores. A store is known specifically for its brand; to create the brand image that Macy’s needs, the company needs to direct sales back to the core brand. This will be crucial as Macy’s can differentiate the company in the retail and department store industry by offering Macy’s exclusive brands. The journal discussed that competitors of Macy’s evolved over time and “off-price rivals like TJX Companies, Inc. (TJ Maxx) … which allowed customers to get similar high-end products at discounted prices” (Oh, 4). These off-price rivals seem to be rampant in today’s society and flood the shelves with the same brands that Macy’s has, thus giving customers limited reasons to go to Macy’s. Customer’s preferred to invest in an off-price retailer and save money on the same brands that Macy’s offered. With a personal brand, Macy’s will be able to stick to the company’s values; it will finally be able to differentiate its brand and create a core following. This idea is not as simple as it may seem and there must be strict steps in place for it to be successful.

To begin this transition to an exclusive brand retail store Macy’s will have to take necessary steps to accomplish this. The company will first have to hire more fashion designers. Macy’s new line will have to fit society and be able to keep up with the evolving trends. These trends rely on having a team of the most well-known designers and with the resources that Macy’s this will not be hard to accomplish. Once the brand is designed and introduced to the stores, marketing will be crucial for the success of this exclusive brand. With the use of social media, advertising, and the company’s website, Macy’s will be able to accomplish a successful rebranding. This transition will not be an easy process as today’s society is riddled with various successful brands that are hard to beat and win customers over. To ensure success, marketing is essential as stated before, but Macy’s will also have to test the waters. The first few years will be the testing phase to see if the brand will be successful or not. Despite this, by hiring skilled fashion designers that are aware of the changing trends the chance of success is very high for Macy’s. In the future, Macy’s will be well-known and successful as a majority brand exclusive department store.

The second strategy that Macy’s needs to enforce is cutting down on the number of ‘discounts’ the store offers and allocate that money to marketing methods. Macy’s has never advertised the company as a ‘discount’ retailer which makes the company’s past actions questionable. A section of Macy’s mission statement says that the goal of the company “is to be a retailer with the ability to see opportunity on the horizon and have a clear path for capitalizing on it” (Farfan). With this being said, nowhere in the mission statement outlines the company’s intention to be a bargain retailer, which is what the company has become in recent years according to customers. Discounts became a major threat to Macy’s sales and the stock price decline. In addition, it has become a norm for customers of Macy’s and has forced them to conform to this idea. “Once these expectations for discounts were established. Consumers were less likely to buy any item without a discount price tag” (Oh 4). With this being said, Macy’s biggest struggle was that if the company took this option away customers were deterred from the company and sent to off-price rivals. It will be hard for Macy’s to drop all the discounts provided and this needs to be done with a slow transition.

To do this, Macy’s needs to stick to discounts only during seasonal sales and when the exclusive brands become obsolete. The first step that Macy’s needs to take to carry out this task is by using the holidays to the company’s advantage. Cutting the number of discounts will allow Macy’s to focus on promoting the new Macy’s exclusive brand or brands. With one of America’s number one holidays and Macy’s biggest promotional scheme, Thanksgiving will be the time that the store should introduce a blowout sale once a year. Macy’s should use the Thanksgiving parade to promote the exclusive lines and attract worldwide customers. Besides the annual sale, Macy’s will give discounts only when items from the exclusive brands are outdated and no longer fit the latest trends. A small part of the store and a tab on the website will be sectioned off for these items. The reason for this is that customers would not expect to find sales throughout the store, thus expecting discounts everywhere. This strategy will be done gradually as the store cannot immediately take away all sales. If Macy’s took away all discounts immediately it will lose most customers and sales will lower beyond the point of survival. A gradual transition will allow for customers to conform with time and allow customers to adapt to the new strategy.

Lastly, the final strategy that Macy’s needs to implement is to collaborate with higher-end retailers to grow a core customer following. This collaboration will include affordable luxury retailers such as Tory Burch and Marc Jacobs. These retailers are chosen as the brands are not overly expensive compared to luxury retailers such as Saint Laurent and Gucci. The collaboration will consist of a partnership between Macy’s and the chosen retailer to design and create a line exclusive to Macy’s. While the original Macy’s exclusive brands are made to attract the middle class, this collaboration will attract and create a higher-class group of customers for the company. In the past (2005), Macy’s attempted to “create a nationwide brand that shoppers could depend on for fashionable and affordable luxury… Macy’s stock price steadily increased until the 2007/08 global financial crisis” (Oh 3). The evidence from this is that the company’s sales can increase with this collaboration if it is done correctly. For Macy’s to achieve this partnership, the company will have to abide by the following steps.

One crucial factor in this strategy is choosing the correct partners. Over the years, many affordable luxury brands have dipped in and out of success, for example, Michael Kors. Michael Kors was on top of the market for many years but recently the brand is becoming less popular. This is an example that Macy’s would not want to collaborate with a because of fluctuation and uncertainty of the brand. On the other hand, Marc Jacobs has been a brand that is around for many years and has always seen success. This success and continuous confidence will benefit Macy’s with a collaboration. Macy’s will have to build a relationship with the chosen brand prior to presenting the idea. This will take many years but once the relationship is built Macy’s will present the idea to create a Macy’s exclusive affordable luxury line. Once the line is created, Macy’s will use the added money from fewer discounts that was discussed before and market this brand. To ensure success, the brand will have to be more affordable than luxury retailers and Macy’s will be able to create an affordable luxury following. Finally, with this brand only being sold in Macy’s, it will give customers a valid reason to go there to get it as it cannot be found anywhere else.

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To sum up, the three strategies presented to Macy’s consist of creating more “exclusive Macy’s” brands, cutting down the number of discounts and finally forming a partnership or collaboration with affordable luxury retailers. With two of the strategies, creating more exclusive brands and partnering with luxury retailers, the company will be able to increase reliable customers, thus increasing sales. The other strategy that explains decreasing the number of discounts, will allow Macy’s to divert this money gained to enhance marketing methods.

Finally, these strategies are all crucial for Macy’s to increase sales and recreate a core following that the company needs. In addition, the strategies are directed for the long-term success of the company and its stakeholder. These strategies will not only impact the internal stakeholders but the external as well. By creating more Macy’s exclusive brands, collaborations and encouraging fewer discounts, the internal stakeholders will be more loyal to the company and the core values. In terms of the external stakeholders, the brand will be recreated into a unique company and attract a strong following. Macy’s needs to become more authentic and this can only be done by sticking to the company’s values as the mission statement addresses. These three strategies will be used for Macy’s to differentiate the company as its own retailer and not a retailer that sells an abundance of brands that can be found in other stores across the globe for cheaper prices. With these strategies in place and presented to Macy’s, the company’s image will be reinvented, and it will have a strong group of loyal supporters.

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A Partnership Or Collaboration. (2022, Jun 28). Retrieved from https://papersowl.com/examples/a-partnership-or-collaboration/