Given Fewer Coupons, Shoppers Snub Macy’s
Posted by Universal Ad at Sunday, September 30, 2007 6:44 AM and is filed under Retail,macys,Coupons,Promotions 
Now that we're past stats week and
academia week, I think we'll just have a-bit-of-everything type week with no
specific theme, starting with this NY Times article about Macy's and their
failed no-coupon strategy. While it may seem surprising that the Gray Lady has an article on coupons, they've summed it up nicely with this sentence "Macy’s forgot a basic law of human nature: Shoppers love a deal."
The background story - Macy's acquired a bunch of department stores, like Marshall Field’s and Filene’s, that have provided their customers with 15-20% off coupons for years. To "reinvent" the stores, they tried to eliminate this practice, lowering the amount of coupons they send out by 30-65% depending on specific store locations. It seemed a reasonable step to take as they had already done this in their own stores (reducing coupons by 25% over 5 years).
The results weren't as reasonable - four consecutive months of falling store sales this spring and a decline of 40% in their stock price. Now Macy's CEO, ostensibly "one of the brightest stars in American retailing", is admitting that they've made some mistakes and promised that coupons will be back in time for the the holiday shopping season.
This was part of an overall re-positioning for all Macy's stores aimed at taking them out of head-on competition with lower priced competitors, such as JC Penney and Kohl's. The strategy included changing store names, new inventories and suppliers and more. All in all, it was "too much, too fast" for American consumers, with the coupon cut-off being Macy's biggest transgression.
(Apparently, this is not a first. Among others, Coca-Cola, Ruby Tuesday and P&G have tried to do away with consumers and suffered for it. With P&G it even led to boycott threats.)
Bottom-line - even in our high tech world, Americans can't live without their coupons (nearly 280 billion issued in 2006, up 13% in four years). So retailers are stuck in a bind - they don't want to "train shoppers to wait for deep discounts, making it harder to sell full-price merchandise" but if they don't issue coupons, they won't even get to see these shoppers.
Posted by Universal Ad
The background story - Macy's acquired a bunch of department stores, like Marshall Field’s and Filene’s, that have provided their customers with 15-20% off coupons for years. To "reinvent" the stores, they tried to eliminate this practice, lowering the amount of coupons they send out by 30-65% depending on specific store locations. It seemed a reasonable step to take as they had already done this in their own stores (reducing coupons by 25% over 5 years).
The results weren't as reasonable - four consecutive months of falling store sales this spring and a decline of 40% in their stock price. Now Macy's CEO, ostensibly "one of the brightest stars in American retailing", is admitting that they've made some mistakes and promised that coupons will be back in time for the the holiday shopping season.
This was part of an overall re-positioning for all Macy's stores aimed at taking them out of head-on competition with lower priced competitors, such as JC Penney and Kohl's. The strategy included changing store names, new inventories and suppliers and more. All in all, it was "too much, too fast" for American consumers, with the coupon cut-off being Macy's biggest transgression.
(Apparently, this is not a first. Among others, Coca-Cola, Ruby Tuesday and P&G have tried to do away with consumers and suffered for it. With P&G it even led to boycott threats.)
Bottom-line - even in our high tech world, Americans can't live without their coupons (nearly 280 billion issued in 2006, up 13% in four years). So retailers are stuck in a bind - they don't want to "train shoppers to wait for deep discounts, making it harder to sell full-price merchandise" but if they don't issue coupons, they won't even get to see these shoppers.
Posted by Universal Ad
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