Monday, May 21, 2007

Macy's to newspaper biz: "Shape up!"

Well, okay, you caught me making up quotes again. The CMO at Macy's, Anne McDonald, didn't quite say that -- what she said was: "In order for your newspapers to be winning our advertising dollars, you need to be winning in the marketplace, and that's not currently the case." And:

With Macy's now a national brand following Federated's acquisition of May Department Stores, the chain is turning increasingly to media with a national reach such as fashion magazines, television and Web sites, she said.

Newspapers are still effective at delivering local messages, she said, but need to do more to engage Macy's shoppers — primarily women ages 18-54.

Department stores have always been a mainstay of the newspaper business, along with supermarkets and car dealers. Although I don't have any numbers in front of me, I would be willing to bet that those have been the three leading categories of local advertising.

But car dealers are going on-line -- the last few cars bought in the Houk household (my kids go through vehicles at a disturbing rate) were sourced through sites like and, and that's where the dealers and manufacturers are going as well. Supermarkets, as any vendor supplying trade promo funding can attest, are spending most of their money in-store these days. And the consolidation of the department store channel has pretty much butchered that cash cow.

McDonald did offer some suggestions. A couple:
  • "newspapers [should] collaborate more effectively across regions and with each other in selling advertising, which would allow national companies such as Macy's to reach a broader audience"
  • "publishers [should] collaborate with advertisers on research to better understand the rapidly evolving habits of their customers"
Most importantly, she suggested that the newspaper industry, like her business, just needs to wake up to the changes in the marketplace:
Macy's, she said, is seeking to establish itself as a more upscale, fashionable brand and drive foot traffic even when there aren't promotions, and is still trying to understand how customers are changing the ways they shop. "Like us, you must change the way you think," she said.
Frankly, I'm not convinced that Macy's has the answer to the problems of their channel (I'm not convinced that there is an answer). But I'll give them credit for being aware that they need to change. I've seen less evidence of that awareness among newspaper execs.

More at this site.

In related news: Macy's is moving ad spending, responding to poor sales:
Troubled by sluggish sales across all Macy's stores the last three months, parent Federated Department Stores said Wednesday that it will shift its advertising dollars to public promotions from direct mail and private customer-only events. "Our promotions will need to create more urgency for these customers to react," CFO Karen Hoguet said on an earnings call. "These marketing issues are particularly critical in home areas that tend to be driven most by promotional offerings. We are hoping that these changes will help accelerate the business starting in late May."

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