Reinvention: Federated focuses campaign on Macy's

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Federated Department Stores is aiming to find out what's in a name, at least the Macy's name.

The retail conglomerate, whose chains include Bloomingdale's and a stable of regional department stores, is testing a campaign in selected markets to focus on brand messages rather than promotions. The effort is part of a revamp of the 145-year-old chain and supports Federated's plan to bring its regional department stores under the Macy's brand.

The spots, from Interpublic Group of Cos.' Lowe, New York, are tagged "Way to shop" and feature vignettes related to shopping. In one, a woman goes through a series of stretches and toe touches in the store parking lot before heading in to shop. Macy's hired Lowe last summer to handle the test; its advertising was handled in-house before.

"Before, it would have been 30 seconds of `Today! One-day sale!'" said Peter Sachse, Federated's chief marketing officer.

Market research found the core Macy's customer considers shopping an enjoyable activity, said Robert Reiser, deputy creative director at Lowe. "Hearing these women talk about shopping was like hearing golfers talk about golf," he said. The campaign-now testing in Atlanta, San Diego and certain New England markets-also includes redesigned direct marketing, outdoor and collateral material for Macy's such as shopping bags and signage. The media mix has also been changed to include more TV and magazines and less newspaper advertising, said Mr. Sachse.

Mr. Sachse said the company will evaluate its fourth-quarter results, make adjustments and will continue the test into the first quarter, to decide whether to expand it to new markets. He would not disclose spending for the test, but Macy's spent $387.7 million last year, according to TNS Media Intelligence/CMR.

The advertising is part of Federated's strategy to "reinvent" the Macy's chain, which includes improving the assortment and the shopping environment, simplifying pricing and developing distinctive marketing, said Mr. Sachse. Federated is also renaming the regional chains-which include Rich's, Lazarus and The Bon Marche-with the Macy's name. The latest, Florida's Burdines, will complete the transition to Burdines-Macy's by Feb. 1, 2004.

losing ground

Department store companies have been losing ground in recent years to specialty stores among affluent shoppers and to discounters among bargain hunters. Many retail analysts have noted the success of this holiday season will depend in large part on how well retailers bring in traffic without shrinking profits with excessive price cuts.

UBS retail analyst Linda Kristiansen noted in a report to investors that Macy's sales on "Black Friday," the traditional start of holiday shopping after Thanksgiving, seemed less promotional than in past holiday seasons, with "more subdued" signage and sale inventory.

"Product seemed to be the focus and there was more `better-priced' product including, according to one store associate, `better brands we haven't carried before,' " she wrote.

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