Macy’s, Inc. (M): Why You Should Buy This Department Store

Macy’s, Inc. (NYSE:M) has recently announced its 1Q13 results, and it has reported 20% growth in profits. It is following some key strategies for growth, such as MOM. The MOM strategy has three parts: “My Macy’s,” Ominchannel, and Magical Selling. My Macy’s is a strategy that focuses on localization and segmentation of stores, while omnichannel will be crucial for Macy’s, Inc. (NYSE:M) to increase its customer base in the next few years. Magical Selling is also part of these efforts, in which the company gives extra training to its sales associates. It is also focusing on younger and frequent buyers called “Milleninal” customers for sales growth.

My Macy’s, Inc. (NYSE:M) is one of the key strategies of the company that has helped it to succeed in the past, and it will continue to drive growth for in future. In this strategy, the company emphasizes the localization of its offerings and further segmentation of its stores. Some of the segments are warm weather, Latino, a small store prototype and extreme growth stores. Merchandising and assorting in these stores has been well received with minimal complaints. This strategy provides a competitive advantage because customers are more aware of their needs and what they want.

Expansion of “Omnichannel” network will ensure quick delivery

The Omnichannel approach to selling products will be another key strategy that will be a sales driver in the future. Online sale have been the biggest growth platform, with 40% growth last year. The company has around 292 stores to cater to orders through these channels. They are planning to expand this facility to 500 stores by fall of 2013. This will result in quick delivery of products with closer options for in-store pick up of their online orders. This channel, with its use of digital advertising, can be the key to increasing per consumer spending and attracting new customers to the stores.

Targeting “Millennial” customer base with new launches and brand extensions

Millennial customers are a $65 billion market, and they are a point of focus for the company to drive sales in FY 2013. This category is full of young, active and impulsive buyers, and the company is planning to launch 13 new brands and expand 11 existing brands by the end of 2013 for them. They recently launched two new brands named QMack and Maison Jules, and a private label called Bar III Carnaby collection, which is an extension of its brand Bar III. These launches will bring more traffic into stores of this young customer base in 2H/13.