Macy’s and the US downturn

The US subprime crisis which so far has only mildly touched our economy, has already been very severe in the US. Doom and gloom is everywhere in retail. But, despite the downturn, one major retailer --Macy's -- is still looking to increase its advertising.

On 13 August, Macy's cut its full-year earnings outlook dramatically, but said it will continue to make investments in marketing.

In Australia, retailers generally, with their emphasis on discounting, seem to know very little about marketing. But it’s a different story in the US. In fact, despite the difficult times, Macy’s looks to be expanding its marketing budget.

The retailer is developing a new relationship with the globally renowned customer focus specialist consultancy, Dunnhumby. Macy’s says that over the next twelve months, its marketing plans will be very visible.

As a consumer-insights firm, Dunnhumby has earned a reputation as an expert at accelerating sales through its work with retailers such as Home Depot. For Macy’s, Dunnhumby will be charged with developing customer segmentation models to be applied across the retailer's business.

The stated aim at Macy's is for the company to continue to build a sustainable competitive advantage by having a more complete understanding of customers. The management at Macy’s wants to mould the Macy offering to satisfy each customer's specific needs.

If you are in financial services or professional services marketing, this may not seem very profound. But in a non-marketing organisation, this type of thinking would represent a major step forward.