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Monday, July 30, 2007

Name change has hurt Macy's

OK, one more Macy's story and then I'll move on to other subjects.

You might be thinking that the title of the post is just an excuse to talk about my support of bringing back the Marshall Field's name. Well not really, in fact this story talks about another retail chaing that was gobbled up into the Macy's Inc. umbrella. The article I present to you will only say that Marshall Field's isn't the only chain that had great loyalty from their customers.

Check it out...

Macy?s is not as big a draw in central Ohio since the chain?s name was changed from Lazarus last year, market research indicates.

In 2005, customer visits to Macy?s in the Columbus market declined 4.5 percentage points, or by more than 50,000 people, according to the independent marketresearch firm Scarborough Research.

The drop was steeper than Lazarus experienced during the previous five years combined.

Parent company Federated Department Stores changed the Lazarus name on six department stores and two furniture stores in central Ohio in March 2005, ending a 154-year run for a brand that had become synonymous with shopping in Columbus. The first Lazarus store opened in 1851 Downtown and grew into a regional chain of more than 40 stores in Ohio and four other states.

The change was part of Federated?s strategy to retire regional names, such as Bon Marche, Burdines, Goldsmith?s, Lazarus and Rich?s, in favor of a single national brand: Macy?s.

Federated also is converting 400 stores acquired last year from May Department Stores, including Kaufmann?s, to Macy?s. By the end of the year, the company plans to operate 850 stores, most of them under the name Macy?s.

Chicago-based retail analyst James E. Dion said the Columbus market-share data, the first he?s seen compiled, suggests to him that Federated might have misjudged consumer sentiment.

"I think it?s a huge warning flag," he said. "The customers are basically saying, ?We liked our hometown department store. We liked Lazarus. We trusted it.? "

Shopper Libby Benson agreed.

"I shopped Lazarus for many years. I went every time I had a chance," said Benson, a model for Lazarus in the 1970s.

While she continues to shop at Macy?s, she?s spending more time in rival Nordstrom and specialty shops.

"Since Lazarus left, I kind of shop around," she said.

According to Scarborough Research, Benson is not alone. Lazarus foot traffic declined modestly between 2000 and 2004, the last full year for the Lazarus name. Nearly 320,000 central Ohioans, or 28.7 percent of adults, said they visited a Lazarus in 2000.

By 2004, the number had declined to nearly 306,000, or 24.3 percent of adult shoppers.

A year later, less than 252,000 adult shoppers, or 19.8 percent of the market, said they visited Macy?s.

"Normally, you would not expect that level of decline," Dion said. "Lazarus absolutely had value as a name, and the customer is saying one size does not fit all."
So apparently Macy's isn't making a mistake only in the Chicago area. Perhaps Macy's should have stayed a regional chain instead of becoming a more American national brand name. I guess only time will tell.

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