Now a Goliath, Macy's Seeks Localized Focus

With National Campaign Breaking, Retailer's CMO Wants to Adapt Merchandise and Marketing Based on Area Preferences

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NEW YORK (AdAge.com) -- Peter Sachse, like many marketers before him, is doing a tricky balancing act: trying to find the perfect mix of national and local.

Some 18 months after it reinvented itself as the country's largest department-store chain by aligning all its brands under one nameplate, Macy's chief marketing officer is seeking to balance its one-size-fits-all, star-studded national TV campaign with locally tailored products and promotions.
Macy's CMO Peter Sachse
Macy's CMO Peter Sachse

Mr. Sachse, who regained the marketing helm by adding chairman-CEO of Macys.com to his duties following the departure of Anne MacDonald last June, is overseeing the implementation a localization initiative, "My Macy's," that seeks to increase sales by adapting merchandise and marketing based on area preferences. Shifts in merchandise will be evident beginning in the second half of this year, while changes in marketing will follow that, Mr. Sachse said during an interview at his New York office.

From a marketing perspective, the program will ensure that advertising closely reflects local trends. Coats will be marketed more heavily in Minneapolis than they would be in Miami, for example. The initiative also seeks to embed Macy's in the local community. When the high school prom is approaching, Macy's could run a prom ad, Mr. Sachse said. And when the local cheerleading squad wins a competition, Macy's could run an ad congratulating them.

The program, announced last month, could assuage criticisms from customers of the former May Co. stores that Macy's didn't understand their needs. "We want to be locally relevant," Mr. Sachse said.

Following the papers
And for those who would say that represents a sea change from the national message the retailer touted in 2006, Mr. Sachse said there will be "very little" impact on the media mix. He said that newspapers and radio would be the media of choice to convey local messages but added: "We have always believed that newspapers are a very viable part of our media mix. The question has become... are they as big a part of the media mix as they have been in the past?"

The retailer's spending on local newspapers, magazines and radio has dropped 25% since 2005 to $599.4 million, according to TNS Media Intelligence. Macy's total measured-media spending for 2007 was down 7% to $1.02 billion.

This week Macy's breaks the latest round of its celebrity commercials with two spots featuring Carlos Santana, Mariah Carey, Gabriel Aubry, Donald Trump and Martha Stewart. A Spanish-language version of one of the spots began airing March 23. WPP Group's JWT, New York, handled the creative, while sibling Mediaedge:cia developed the media campaign, which runs through May.

The series, which launched last fall, has driven sales and informed consumers, said Mr. Sachse. He noted that businesses featured in the spots have exceeded sales expectations and have ranked among the store's top performers in the wake of the commercials.

Differences of opinion
The retailer's desire to embrace a more promotional strategy was the reason many cited for the departures of Ms. MacDonald and Exec VP-Marketing Brad Jakeman last year. Mr. Sachse declined to comment specifically on those departures said that it is important to equalize the two approaches.

Mr. Sachse said the retailer's promotional plans for this year are similar to last year's, although he said that could change. "The economy is not robust, as we all know today," he said. "But we have to ring the cash register every day, and we have to build a long-term relationship with the customer."

Looking ahead, Macy's is prepping a multimedia green-marketing campaign that will launch around Earth Day, at the end of April. It will promote organic merchandise and its reusable shopping bag and will also dispense tips for being environmentally friendly.
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