Macy’s and Bloomingdale’s powerful offline brands get a new look online
By Andrea McKenna Findlay
Brown shopping bags and brand boutiques. Home decor and hip window displays. Those may be the word associations that occur to consumers when they think of Macy’s and Bloomingdale’s. But what about their respective web sites? If Federated Direct, the direct-to-consumer division of Federated Department Stores Inc., has its way, online consumers will think exactly the same things.
In the past 12 months, New York-based Federated Direct has rethought, revamped, redesigned and relaunched its two flagship web sites to reflect the most powerful aspects of its brands. “We spent a little over a year focusing on integration, customer service, marketing and technology,” says Dawn Robertson, president of Federated Direct. “Federated did this to put a stake in the ground about what we believe the direct-to-consumer business should be online.”
Federated was one of the first online retailers with Macys.com. It set the pace with an operation that was separate and, based in San Francisco, a whole continent away from the parent. It had a separate marketing plan and a separate buying plan, separate management and separate goals. But it always recognized the power of the brand name, reporting, in fact, that it was receiving orders from consumers who lived hundreds of miles from a Macy’s store at the same time it was noticing customers in stores with print-outs of web pages.
Now with its re-launches, Federated has demonstrated that it is prepared to stay in the vanguard of online retailers. It gets high marks for its revamped sites—not just because they feature new technology and a slick look, but also because Federated took into account what its customers wanted. “Federated has shown an excellent understanding of what their customers expect from them,” says consultant Duif Calvin, vice president in the global retail practice at iXL Enterprises. “At the same time, they’ve done a good job translating that into something that is appropriate for the different channels.”
Federated has added new search functions, wish lists, designer boutiques, fashion content and even virtual closets to its revamped web sites. These new features will bring in shoppers in droves, Federated believes. That has happened, so far, at least. Transactions and traffic in August at the Macy’s site grew significantly, says Kent Anderson, president of Macy’s Direct. Conversion rates in August were 150% over last year, while orders have increased over 200%.
Calvin is not surprised by the growing usage. “The new sites have a number of merchandise improvements,” she says. “In that sense, they should see some clear increases in conversion rates.”
Anderson is pleased with the growth because it confirms that Macy’s is achieving what it set out to achieve: meeting customers’ expectations as to what a Macy’s web site should be while advancing Federated’s multichannel strategy and providing shopping experiences that are unique to the web. “Our customers expected the web site to be a clear representation of Macy’s in the real world, but they also were willing to try new online features that emulate real world shopping, such as comparison shopping, search capabilities and personalization,” Anderson says.
Combining catalogs
Among the first moves for Federated was to combine Macy’s and Bloomingdale’s catalog operations with their respective web site businesses. For Macys.com, that endeavor consolidated merchandising and planning in New York, with buyers buying for both the catalog and macys.com. At the same time, finance, web management, human resources and technical operations functions for both online and direct mail operations were consolidated at Macys.com headquarters in San Francisco. The new business line operates under Macy’s Direct. Bloomingdale’s consolidated its direct mail and online business in April. The new Bloomingdale’s Direct organization under Federated Direct management also streamlined merchandising, fulfillment and other areas similar to the Macy’s Direct integration.
The consolidation allows Federated to make sure it is sending a single message to customers. “We want to speak with one voice to the customer,” Robertson says. “We have developed a powerful mission of who we want to be and we’re lucky we have the brand recognition that we have.” She says shoppers expect Macy’s to have the best gift selections as well as home fashions and they expect Bloomingdale’s to have the latest fashions and trend commentary.
When developing Federated’s multichannel direction, the company relied on its own brand names as well as those of the top designers they feature. “We want the branding and creative experience to be truly a combination of all the channels,” says Robertson. “We put together what we thought the new site should be strategically from a technology point of view and then we spent time on how to fulfill that vision and on what the service ramifications are. We have exclusive collections of some of the greatest brands online. And one reason the vendors keep coming to our dot-com companies is that we can extend their brand as well as our own. Our brands sell a lot of trust.”
Better search
One area that Federated improved upon for both the Macys’ and Bloomingdale’s sites is the search functions. Federated officials explain that the revamped search engine reflects consumers’ surgical approach to online shopping. “Customers are using search engines to an incredible degree,” says Robertson. “Customers are comfortable with the key word search. We’ve been working hard on giving them good, solid search results. Once you punch an item in, the results come quickly.” Both Macy’s and Bloomingdales’ sites allow customers to view content by category as well on the entire site.
Macys.com was the first of the two Federated sites to announce a relaunch. The company began last year to build its web infrastructure. “We spent time talking to our customers and we represented them in the design,” Anderson says. In July, Federated relaunched Macy’s.com with some new features which accented the Macy’s brand and enhanced the multichannel shopping experience. The company worked with Mercado Software Inc. to improve its search engine capabilities including comparison shopping. It also added several designer boutiques, a wish list, and a new technology called My Macy’s Closet that allows customers to mix and match apparel and store their selections for later purchase.
Historically aligned with leading apparel designers, Macys.com introduced eight new designer boutiques. They include Polo Ralph Lauren, Calvin Klein, DKNY, Tommy Hilfiger, Liz Claiborne, Kenneth Cole, Jones New York and Lancome. Each boutique was developed to feature the best merchandise with the style and branding of the designer, Anderson says.
The benefit that Federated gains from housing boutiques within its web site is that it attracts shoppers who are familiar with the brands and thus more likely to be comfortable shopping online. “Customers look to us for brands,” Robertson says. “We’re finding that consumers most often turn to their favorite brands and the styles of clothes they’re familiar with. They know how Calvin Klein and the Jones New York clothes fit them. We’re taking that experience online with these new boutiques. We’re migrating those vendor and customer relationships onto the web.”
Robertson points out that the majority of what Macy’s had been selling online was brand-name-designer home products. But this trend is changing as customers get more used to shopping for clothes online. “Now the pendulum is swinging the other way and people are starting to buy fashion online,” she says. “So we’re beginning to sell those brands online. One of our goals is to make it easier for customers to buy fashion online.”
Making fashion easy
Macys.com has developed several new ways to make buying fashion online easy. As many analysts have suggested, making the online shopping experience more personalized will engage the shopper and not only keep her interested enough to buy something but to actually make multiple purchases and repeat purchases.
Macys.com’s personalization includes communicating online wish ideas by adding a wish list feature, which customers can e-mail to friends. “We have a strong focus on gifts,” says Anderson. “Our customers clearly told us they see Macy’s as a primary brand for gift shopping.” Robertson stresses that the wish list simplifies online shopping, adding that Federated was willing to try features that would make online shopping easier and more engaging for the consumer. Customers must register in order to get a customized wish list.
Macy’s also seeks to engage the shopper by offering improved search functions as well as a comparison shopping function that allows customers to compare similar products by price or feature. Anderson notes that the site will have 75,000 SKUs online to search from and compare, up from 55,000.
A new technology function on the Macys.com site is My Macy’s Closet, a sophisticated wardrobing tool and outfit generator that uses Flash technology to allow customers to mix and match apparel in a virtual fitting room. The “closet” holds up to 100 items that customers can combine with various accessories. They also can add or delete items, save items in a wish list or add an entire outfit to the shopping bag in one click. My Macy’s Closet, which was developed by Macy’s tech staff, uses dynamic inventory management so that the tool can add only items that are in stock. The closet also keeps a running total of all the items stored during an online visit. “My Macy’s Closet takes online shopping one step closer to the store experience,” says Robertson. “One reason we added this tool was to help customers feel more comfortable buying online as well as to encourage them to make multiple purchases.”
Keven Wilder of Wilder & Associates, a retail consulting firm in Chicago, however, believes the My Macy’s Closet function may be too laborious for consumers. “Any time you require a consumer to download an application you run the risk of losing them,” she says. But she says that the feature is “getting there” in terms of mimicking the offline shopping experience.
IXL’s Calvin believes My Macy’s Closet could do more to cross-sell products. She says Macy’s could do a better job selling fashion online by grouping outfits on one page and allowing customers to buy the complete outfit, similar to what they can do at The Gap and Eddie Bauer online stores. “Macy’s has done a remarkable job positioning itself as a fashion leader for Generation Y, Generation X and the Baby Boomers. It is one of the few brands that reaches fashion forward shoppers in all three generations,” she says. “They really have the credibility to be able to say ‘this shirt goes with these pants.’ They have much stronger fashion leadership than the site reflects.”
Further, she says, that drawback could hold down sales growth at the site. “I don’t know if they’ve done enough yet toward increasing the average order value,” she says. “It’s still somewhat difficult to buy the jacket and the pants. My Macy’s Closet is a good approach toward loyal Macy’s shoppers but the majority of those coming to the site will not know about it or use it right away because they have to register for it.” Fewer than 10% of visitors will register with a web site, she says.
New customer service
In addition to the new shopping features, the new Macys.com includes revamped customer service offerings, which the company says were based on customer e-mail and research as well as input from customer service representatives. The site has a detailed help section that answers commonly asked questions and explains how to use the site features. Macy’s also created a glossary of terms to provide definitions on fashion and houseware terms such as acetate, bone china, chemise and stemware. Keeping in line with its drive to promote a multichannel strategy, the section also includes a store locator that provides links to MapQuest for driving directions. Anderson says 25,000 customers access information about local stores each month.
For the new Bloomingdales.com site, the emphasis was on content, Robertson says. “We wanted the Bloomingdale’s site to be reflective of the brands,” she says. “Bloomingdale’s is an authority on what’s hot in fashion trends It’s about fun and excitement and that’s what we wanted to expand on the web site.” Content features include new boutiques, concept shops and an expanded version of its hip Y.E.S. boutique. The site also has a home planner that provides advice on home decorating trends. “At the same time, we wanted to make it easier to shop online,” says Robertson. New features to do this include the catalog quick order and express checkout.
The Bloomingdales.com home page makes a big fashion statement, Wilder says, and gets consumers excited about shopping and fashion. “You can tell this is a great store,” she says.
Other fun content on the new sites includes e-mail postcards with the theme of “Meet me at Bloomingdale’s. “It’s a nice tie-in to the store,” says Robertson. The e-mail postcards also allow the company to compile e-mail addresses for marketing efforts, Robertson says. And she notes that the heritage of Bloomingdale’s is of people shopping the windows in the New York store on 59th Street. To capitalize on that, the web site has added a feature that allows visitors to see the latest window dressings.
Fashion is a huge part of Bloomingdales’ brand, so naturally Federated is playing up its trend-setting status by adding designer boutiques online. New boutiques on Bloomingdales.com include Carolee, DKNY, Ralph Lauren and Lancome. Generaton Y.E.S.-which stands for “young Eastsiders”— is one of Bloomingdale’s own boutiques where consumers can find the most hip and modern apparel. “Putting more categories online underlines our efforts to try to bring the best of Bloomingdale’s online,” Robertson says. Bloomingdale’s has also added more concept shops to capitalize on its trendy reputation. They include Poolside, Spa, Luxe Home and Fine Jewelry. Bloomingdale’s says it successfully pioneered the concept-shop idea with its Hot@, Broadway Cares and Beatles shops. Robertson says Bloomingdale’s will focus on “bigger and better” concept shops, including one for Christmas.
Wilder likes Bloomingdale’s concept shops. In particular the jewelry shop has very clear images, which makes it easier to buy jewelry online. She suggests the store add more content such as a gemstone guide to encourage customers.
Don’t forget the catalog
Similar to My Macy’s Closet, Bloomingdales.com has instituted its own personalized shopping tool for the home called Home Planner. The new tool provides advice on current and future trends in the bath, bedroom, dining and kitchen categories. It also provides three other sections: Tips & Techniques on decorating, etiquette and ideas for entertaining, Basics & Essentials, which is a glossary of houseware and decorator terms, and Product Care that explains methods and ideas for cleaning such home products as crystal, silver and linens. “We think providing such rich content tied with e-commerce will produce a lot of sales for the home division,” Robertson says.
In addition to the new product features, Bloomingdales.com also added some features to make shopping online easier. Robertson says the Bloomingdale’s catalogs are a big part of its brand, which made adding a catalog quick order function a logical step for the new web store. Customers can now access catalog pages online and shop by item number to combine their online and offline shopping. They also can search for products within a specific catalog.
Other new features include express checkout, which customers can do after registering on the site. This allows customers who keep credit card numbers on their customer profile to check out in two clicks—one to buy and one to confirm the order. Registering on the site also allows customers to receive personalized product recommendations when they log on.
E-gift cards
In the credit services department, Bloomingdales.com has expanded its account management options to allow customers to apply for a store card online, view account balances and pay bills online. Live chats are available for customers who want to find out order status from the web site or from phone orders. Customers also can buy and use electronic gift cards online. Following Federated’s strategy to promote all its channels, customers can find out about store locations, in-store events and promotions on the site, as well as view historical information about Bloomingdale’s via Flash animation and graphics.
With its experience in real-world department stores, Federated’s Bloomingdale’s and Macy’s web sites expect to set a new standard for online retailing. “Changing content is what we do best. We have years of experience in merchandising the hottest products and newest trends. That’s what sets us apart,” Robertson says. “We have developed a process so that we can extend that online. It’s not easy but we think that it will help us and it’s part of our culture to identify the latest retailing trends. It takes constant maintenance and updating and there is a learning curve. Every day we find new things about what customers want and we’re learning how to quickly react to that.”
Says Wilder: “Federated is to be applauded. They really are working through trying to make this a more user-friendly vehicle and they’ve made great strides with the site launches.”
Federated Direct expects to see results from its web site re-launches in the holiday shopping season. So far, the company has released few results. “The results we have are favorable,” Robertson says, “and we’re pleased with them. The verdict is out but we’re positioning for a winning fourth quarter.”
andrea@verticalwebmedia.com
