Macy's PR Campaign

Final Macy’s Research Proposal

J428 | Public Relations Planning & Research

Nicholas Janicki, Madeleine Weil, Kelsey O’Connor, Hengying Cui

12/09/2013


2

Table of Contents

p. 3. Executive Summary

pp. 4-5. Research Problem in Context

pp. 6-8. Situation Analysis

p. 9. Stakeholder Analysis

pp. 10-13. Research Design and Recommendations of Methods

p. 14. Discussion

pp. 15-16. References

pp. 17-19. Appendix


3

Executive Summary Macy’s, Inc. is a mid-to-upscale department store in America with over 800 stores throughout the nation. While Macy’s has a wide variety of products available to consumers at reasonable prices, there is a common belief that the stores and products are meant for older women (30 years old and above) and therefore the image of the store does not appeal to the millennial generation. We found the key stakeholders of the company to be public and private (celebrities, for example) vendors, customers who shop at Macy’s, the news media, and Macy’s employees, to name only the most important stakeholders. Furthermore, we attributed the wide variety of products, inexpensive products (in comparison to other department stores such as Nordstrom), Internet presence, nation-wide store presence, and private labels to be strengths of the company. Alternatively, the company also has a fair amount of weaknesses. The company’s decline in overall value is primarily a result of cash flow problems due to reduced sales, many traditional media sources only mentioning Macy’s in a negative way, severe decline in the company’s stock price that crosses below the critical moving average, and Macy’s growth rate being very slow are all important weaknesses to note. Also, another weakness could be the negative remarks on social media. Looking more at potential opportunities and threats of the company, Macy’s can redesign parts of their stores, which could benefit the company and even eventually be done to stores nationwide. Also, social media is always an opportunity for any company; social media is becoming more prominent throughout society and there are a lot of opportunities within social media platforms such as Twitter, Facebook, and Instagram. Lastly, Macy’s has recently hired a lot of college representatives, which could ultimately be very beneficial to the future of the company and millennial involvement. On a different note, Macy’s primary threats are its competitors (cheaper department stores, department stores with more variety, etc.). After having done extensive research our objective became clear: discover how Macy’s can reach the millennial generation and ultimately influence them to become more involved in the store, making them a more valuable demographic to the company. In addition to using secondary research and carefully observing the store’s competitors, we relied heavily on primary research to assist us in reaching our measurable objective. We conducted an internet survey because the millennial generation has a strong presence on the internet. This drove us to create simple questions which would allow us to get feedback about the company, department stores in general, and customer shopping interests/influences from the millennial generation. We also designed a focus group (with a layout) which would provide different, more conversational feedback from the millennial generation. Eventually we would like to put our survey and focus group into action, ultimately leaving us to analyze the data to find areas that Macy’s needs to improve on in order to better reach the millennial generation. This primary research along with our secondary research would provide Macy’s with crucial information regarding how to reach and influence the millennial generation to shop at their stores, thus benefiting the company socially and economically.


4

Research Problem in Context a. Macy’s, Inc. is a prominent retail company in the United States. They have a

wide variety of products, but our research led us to notice that they are not reaching every

audience to their full potential. More specifically, they are not reaching the millennial

generation nor do they have a positive image in the eyes of that generation.

b. After doing extensive initial research on Macy’s, Inc., it became clear that the

company had an issue with its image, most importantly the problem that the millennial

generation is not as involved in the Macy’s as it could be (Current Annual Report / Fact

Book - Macy’s, Inc.,” 2013). The millennial generation is often a difficult demographic

to reach today, and it is a group that Macy’s as a whole could benefit from if they

managed to draw them more into their store. This led us to ask, more specifically, why

this lack of involvement existed and what the company could do to improve in that area.

c. The objectives of our research became clear, the more time we invested

monitoring news media, viewing past studies, and analyzing the company’s entire

situation. Our objective ended up being to measure what draws the millennial generation

to stores and what does not, and what else Macy’s can do to reach this generation. There

are many more specifics that apply to the objectives of our research, but the overall goal

is to find a foundation and basic idea that Macy’s can build off of to begin to attract the

millennial generation. Breaking the objective down into a more detailed perspective, we

formulated survey questions that related to the general shopping experience and then

included questions regarding exclusively Macy’s. Finding out this information is crucial

in order for us to learn more about our target audience; the millennial generation often

has a problem with expensive items, for example, so finding out how important price is to


5

them is one example of how we can prioritize the problems with reaching that generation

("Sterne Agee Lowers Price Target on Macy's,” 2013). We are confident that our tactics

will allow us to obtain results that are extremely measureable and that can be organized

into data that clearly displays the approach that Macy’s should take in order to reach the

millennial generation.

d. This study should provide solid information and groundwork that Macy’s can

use to eventually reach the millennial generation. Once that occurs, Macy’s will begin to

progress in several aspects that will benefit the entire company. First, they will benefit

socially; the millennial generation is an audience that has a large voice in the world now.

Through Twitter, Facebook, and other social media networks they have established a

dominating voice that often influences the opinions of others. If Macy’s can reach this

generation they can also benefit from the social influences that the generation has. More

specifically, though, if the company can influence millennials to shop more at their store

(or online), Macy’s will benefit financially. Right now, the millennial generation is

somewhat of an untapped resource for the company in that there are a lot of potential

customers in their audience that simply do not currently see a reason to shop at Macy’s.

In short, putting this research problem in context has allowed us to see that there

is a definite benefit of reaching the millennial generation by finding out what their

shopping habits are like in general and their view of Macy’s.


6

Situational Analysis

a. Macy’s is a mid-to-upscale department store that has been present since 1858

and originally founded in New York City, New York. This department store is owned by

Macy’s, Inc., which also owns the department store Bloomingdale’s. Macy’s corporate

headquarters is in Cincinnati, Ohio, and outside of their corporate employment they have

approximately 850 locations throughout the nation. Additionally, as of 2013 they totaled

their number of employees at 175,700. The store has an online division, private brands,

merchandising groups, as well as a marketing division that all play a key role (in addition

to its store employees) in the success of the store (Current Annual Report/Fact Book,

2013).

b. In relation to public perception and their reputation, Macy’s has several

important strengths that should be mentioned.

i. Macy’s is a department store. That quality alone makes the store attractive

to a wide variety of costumers as they carry a lot of products. On a similar

note, the products they carry are also, in some cases, private labels. These

items cannot be sold in other stores, which certainly serves as a benefit to

carrying those labels.

ii. The store carries inexpensive as well as higher-end products. This draws

customers to the store who may be looking to purchase high-end products

and also those who are looking to spend a little less.

iii. Macy’s online presence is also a strength. The company has a website that

allows companies to shop online, a website that discusses corporate


7

information, and a strong presence in social media networks (i.e.,

Facebook, Twitter, and Instagram).

iv. They have a strong national presence (850 stores nationwide). They have

far more stores available to customers throughout the country than many

other retail stores (Nordstrom, Inc. has 117 stores and 141 Nordstrom Rack

stores (“About Us: Nordstrom,” 2013)).

c. Alternatively, Macy’s also has several weaknesses that should be noted.

i. The company has had a large decline in overall value. They are facing cash

flow problems in a result of reduced sales. In addition to this, their stock

price has declined to the point where it went below the critical average.

ii. Negative publicity, especially by the news media, puts the company in a

negative light and may discourage customers to shop at the store.

iii. Although the company has a strong online presence, social media could be

a weakness of theirs as well. The company receives around 30% negative

tweets from users online, which not only is out for the public to see but

also reflects the company’s lack of responding to complaints online.

d. Macy’s also has a lot of external factors that stem from its external relations

and forces that are often beyond the control of the company.

i. Other retail stores (such as Nordstrom, J.C. Penney, Kohl’s, Neiman

Marcus, Saks Fifth Avenue, etc.) always pose a threat to Macy’s. There are

competitive prices, similar products being sold, and also overall reputations

of the stores that play a role in competing with Macy’s. There was recently

a legal issue between J.C. Penney and Macy’s regarding Martha Stewart


8

partnership that was clearly displayed competition between the two stores

(O’Toole, 2013).

ii. Discount stores also are an external threat to Macy’s in that they are

incredibly inexpensive and offer items other than clothing as well.

iii. Due to the economic crisis and other factors, Americans have been cutting

back on spending. Customers are obviously vital to the company in order to

succeed.

iv. Macy’s is always working on opportunities to improve their stores, such as

the recent total redesign of the beauty department in the New York flagship

stores (Shropshire, 2013). These internal improvements are always good

opportunities for the company to grow and improve.

v. Social media has endless opportunities for the company. Macy’s can

interact with customers/potential customers, create contests or promotional

material, and continue to adapt to the different trends and social networks

that become present in society.


9

Stakeholder Analysis

Macy’s key stakeholders come from several different groups that are committed

to Macy’s and its success. First, Macy’s has public and private vendors, such as

celebrities that have their own clothing lines like Jessica Simpson, that only sell their

brand through Macy’s stores. This would make the vendors a key public. Another key

stakeholder would be shareholders who have stocks in Macy’s. Obviously customers who

shop at Macy’s are key stakeholders as well, as the customers are who control the

revenue of the store. Macy’s most prominent consumers are women, according to the

Mintel Report (Mintel, 2013). Lastly, the news media would be a key stakeholder

because they represent Macy’s in the public eye, and therefore Macy’s must maintain a

positive relationship with the news media.

Looking at customers more closely, according to the Mintel Report on department

store trends, older women tend to be more price sensitive and less engaged. Also, women

are more like to wait for sales than men. As Macy’s goal is to target the millennial

generation (Mintel, 2013), it is important to look at the spending habits of multiple

demographics. According to millennial spending trends, “Millennials have aligned with

the conventional wisdom that members of this generation are constantly connected—via

mobile devices and the internet—and will be most receptive to retail and service

opportunities grounded in technology” (Grabowski, 2012). As a result, Macy’s should be

working towards increasing their social media interactions with millennials and keeping

up to date on trends, as millennials are a vital stakeholder. As for women and men,

Macy’s should continue to market their frequent sale discounts to attract that population

of stakeholders.


10

Research Design & Recommendations of Methods

a. In order to meet our research objectives, we decided to use the survey and focus

group methods to conduct our research. We selected an Internet survey as our means of

distribution to the sample. For the qualitative research method, we decided that a focus

group would be the best approach to achieve our research objectives.

b. We selected an Internet survey because of the key public we are attempting to

reach. We believe this would best reach the demographic of the key public, the millennial

generation. This demographic is extremely active on the Internet and social media. The

survey in this format is quick, simple to complete, and easy to disseminate. Most of all, it

is presented on a medium that the key public is already experienced with and present on.

We decided to use a focus group instead of an in-depth interview due to the type

of information we are trying to obtain. An in-depth interview is more useful when you

have access to key personnel or when analyzing the decisions on an individual. A focus

group will better serve our needs because we are seeking more general feedback from our

key public. We want to analyze how this group makes purchasing decisions and their

opinions on our client. We are seeking insight into what the public would like to see from

the client, and a focus group setting will help us obtain this type of candid feedback.

We expect that utilizing both quantitative and qualitative research methods will

have a positive impact on our discoveries. By using mixed methods, we will uncover

diverse and detailed findings that will give us a more in-depth perspective of the key

publics and their behaviors. The survey will give us precise numerical data, while the


11

focus group will yield more rich description. Combining these results will give create a

more complete picture of the key publics and their ideas, behaviors, and values.

c. The research participants will be males and females between the ages of 18-29.

With a population of 5.28 million millennial in the U.S., the sample size will be about

1,067. The margin of error is +/- 3% and the confidence level is 95%. We are using a

method of probability sampling in order to obtain results that most accurately represent

the population selected. We selected systematic sampling as our method of sampling.

This method eliminates most bias in sampling by randomly selecting a sample population

using a set interval.

Macy’s, Inc. Internet survey The following survey is for Macy’s. We appreciate your feedback and look forward to improving our company to your benefit. 1. How often do you shop at department stores?

a. Never b. Rarely c. Sometimes d. Often e. Very often

2. Which type of store would you be most likely to shop at, 1 being most likely and 5 being least likely? __Boutique __Thrift shop __Department store __Retail store (ie. Old Navy, Forever xxi, American Eagle, etc.) __Big Box store (ie. Target, Walmart) 3. What factors influence where you shop? Check all that apply. __Prices __Location __Quality of Product __Brand names __Customer service


12

4. Please rate the following brands in the order that you would most likely purchase them (1 being most likely, 10 being least likely). __GUESS? __Levi’s __Material Girl __Tommy Girl __American Rag __Keds __XOXO __Jessica Simpson __Angie __Planet Gold 5. How often do you shop at Macy’s?

a. Never b. Rarely c. Sometimes d. Often e. Very often

(If you answered Never, please skip to question 10) 6. How would you rate your average experience at Macy’s on a 1-10 scale (click your answer; 1 being terrible and 10 being excellent)? 1 2 3 4 5 6 7 8 9 10 7. How satisfied are you with the products that Macy’s carries (click your answer; 1 being extremely unsatisfied and 10 being very satisfied)? 1 2 3 4 5 6 7 8 9 10 8. Please rank the following areas in which Macy’s should improve (1 being most important to improve and 5 being least important to improve) __Customer service __Variety of brands __Quality of clothing __Pricing __Variety of merchandise (clothing, jewelry, shoes, etc.) 9. What types of products do you purchase at Macy’s? Check all that apply to you. __Clothing __Shoes __Accessories/handbags __Jewelry __Beauty products __Home goods


13

10. If you have never shopped at Macy’s, please state why in the comment box below. 11. Please select your age range.

a. 17 and under b. 18-22 c. 23-27 d. 27-30 e. Older than 30

12. Please select your gender.

a. Male b. Female c. Prefer not to answer

Focus Group for Macy’s, Inc. Introduction Can everyone please introduce themselves? What typical stores do you usually shop at for clothing and beauty products? What factors influence where you shop? What is your current impression of Macy’s? What was your last experience like at Macy’s? Transition What did you particularly about your experience? What did you dislike about your experience? What changes would you like to see at Macy’s? (Make a list) Key questions What can Macy’s do to better serve people in your age group? What can Macy’s do to improve its service and products? If you could give advice to our CEO, what would you tell him? If you could include a brand into the Macy’s line that they don’t already have, what brand would you include? Final Is there anything you would like to add?


14

Discussion

We now have a layout, timeline, and budget for our primary research. From

here, we would proceed to post the survey online and analyze the information based

on the demographic (specifically the age) responses from participants, and we will

be able to filter out any respondents that do not fit the basic demographics of a

millennial. From there, we will be able to see the spending habits, what draws

millennials to stores, and other factors that Macy’s can use to develop a campaign to

reach that generation.

We would ideally like to begin working with Macy’s on creating an

advertising campaign as well as suggesting store redesign initiatives in order to

actually start reaching the millennial generation and influencing them to shop at the

store/be more involved in the store in general. Our survey and focus group should

provide us with more than enough information to know what the company needs to

prioritize in order to reach the millennial generation and what is less important.

Our research will ultimately benefit Macy’s financially and socially in relation

to the millennials. First, millennials have a strong voice and influence today in

society, especially in terms of the Internet and social media and therefore having a

closer relationship with them would benefit Macy’s in a social context. Additionally,

there will obviously be a financial gain from reaching the millennial generation and

influencing them to shop/spend more at Macy’s.


15

References

"About Us” (2013). Nordstrom. Retrieved from <http://shop.nordstrom.com/c/about-us>. Creswell, J. W., & Clark, V. L. P. (2005). Principles of qualitative research: Designing a

qualitative study. In a Capella University workshop, Washington, DC. "Current Annual Report / Fact Book - Macy’s, Inc.” (2013). Current Annual Report /

Fact Book - Macy’s, Inc. Retrieved from <http://www.macysinc.com/for-investors/annual-report/current/default.aspx>.

Department Store Retailing – US (Feb. 2013). Mintel.

<http://academic.mintel.com.ezproxy.lib.indiana.edu/display/653232/> Gantt.com (2013). What is a Gantt Chart? Gantt Chart Information, history and Software.

[online] Retrieved from: http://www.gantt.com/ [Accessed: 8 Dec 2013]. Grabowski, G. Marketing to Millennials - US (August 2012). Mintel. <

http://academic.mintel.com.ezproxy.lib.indiana.edu/display/590277/?highlight=true>

Hopkins, A. "Macy’s the Latest Retailer to Say It Will Open Thanksgiving Night."The Washingtion Times. (28 Oct. 2013). Retrieved from <http://www.washingtontimes.com/news/2013/oct/28/macys-the-latest-retailer-to-say-it-will-open-than/?page=all>.

"Join Our Team!" (2013). Explore Career Opportunities at Macy’s. “ Search and Apply

for Jobs. N.p., n.d. Web. Lipson, A. Issues in the Market. "Macy's CEO: Unemployment Threatens Retail's Recovery,” (22 Apr 2010). CNBC.com.

Retrieved from http://www.cnbc.com/id/36714157 "Macy's - Shop Fashion Clothing & Accessories - Official Site - Macys.com,”

(2013). Macys. Mindtools.com (2013). Gantt Charts - Project Management Tools from MindTools.com.

[online] Retrieved from: http://www.mindtools.com/pages/article/newPPM_03.htm [Accessed: 8 Dec 2013].

O'Toole, J. "J.C. Penney Scales Back Martha Stewart Partnership under Macy's

Pressure,” (21 Oct. 2013). CNNMoney. Retrieved from <http://money.cnn.com/2013/10/21/news/companies/martha-stewart-jc-penney/>.


16

Reidy, C. "Business." BostonGlobe.com. N.p., (26 June 2013). Retrieved from <http://www.bostonglobe.com/business/2013/06/26/fluent-firm-that-helps-brands-market-college-millennials-moves-larger-hub-offices/ME2WvOIkBzaPW7sOWMkwcL/story.html>.

Shropshire, C. "More than Cosmetic Change for Macy's Beauty Department,” (20 Sept.

2013). Chicago Tribune. Retrieved from <http://articles.chicagotribune.com/2013-09-20/business/ct-biz-0920-macys-beauty-20130920_1_ulta-beauty-beauty-departments-macy>.

Stanford.edu (2013). NCPI Student Assessment Toolkit. [online] Retrieved from:

<http://www.stanford.edu/group/ncpi/unspecified/student_assess_toolkit/interviews.html>.

"Sterne Agee Lowers Price Target on Macy's," (24 Sept. 2013). Bloomberg Business

Week. Retrieved from <http://www.businessweek.com/ap/2013-09-24/sterne-agee-lowers-price-target-on-macys>.

Talley, K. “Macy’s Issues Upbeat Outlook.” The Wall Street Journal. WSJ.com. (26 Feb.

2013). Retrieved from <http://online.wsj.com/news/articles/SB10001424127887323384604578327931366784520>.

Wilson, J. "Macy's Also Gets Slapped With Racial Discrimination Lawsuit By Black

Shopper," (25 Oct. 2013). The Huffington Post. Retrieved from <http://www.huffingtonpost.com/2013/10/25/macys-racial-discrimination-lawsuit-black-shopper_n_4164823.html>.


17

Appendix

a. Timeline (Gantt chart)

i. Timeline for survey

ii. Timeline for the selected qualitative method

12/4 12/6 12/8 12/10 12/12 12/14 12/16 12/18 12/20 12/22 12/24

Researcher's Salary

Statistician

Travel Costs-‐Petrol

Stationery

Computer Laptop

Photocoping

12/8 12/10 12/12 12/14 12/16 12/18 12/20 12/22

Draft of Letter for Survey

Letter to Survey Participants

Collect and Count the Number of Willing

Dissemination of 1000 Survey forms to 1000

Consolidate the Responses in the Survey

Analyze the Results of the Survey Using


18

b. Budget (itemized narrated budget)

i. Budget for survey

0 500 1000 1500 2000 2500 3000

Calculations

Estimated

Tasks Calculations Estimated Draft of Letter for Survey 2800 2200

Letter to Survey Participants 1765 1750 Collect and Count the Number of Willing Participants who will be

involved in the Survey 1770 1830 Dissemination of 1000 Survey forms to

1000 participants through email 2140 1900 Consolidate the Responses in the

Survey 1680 1590 Analyze the Results of the Survey Using

Qualitative Methods 1780 1900 Total Cost 11935 11170


19

ii. Budget for the selected qualitative method

Items/Resources Calculations Estimated Total ($) Researcher’s Salary 2000 2000

Statistician 1000 1000 Travel Costs – Petrol $25/week for 4 weeks 100

Stationery Paper

Envelopes Notebooks

Pen Extra

100

100

Computer Laptop 1000 1000 Photocopying

Printing Binding

30 50 20

100

Refreshments/Snack Drinks/snacks 50 TOTAL COST 12350

0 500 1000 1500 2000 2500

Researcher’s Salary Statistician

Travel Costs – Petrol Stationery

Computer Laptop Photocopying

Printing Binding

Refreshments/Snack

Budget

Macy's PR Campaign

Documents

Transcript of Macy's PR Campaign