Macy’s Multi-Pronged Strategy for an Informed Customer Loyalty Program

How Macy’s shifted focus away from attracting new customers to retaining and cultivating their existing base through a sweeping loyalty initiative.

Macy's, DunnhumbyUSA, Retail Localization, NRF 2012

Their Approach is Not a Tactic, But a New Way of Doing Business.

The National Retail Federation’s “Big Show” Monday breakout session, featuring representatives from both Macy’s and DunnhumbyUSA, began with a simple key insight from their three-year collaborative journey to better understand their customers; 7 out of 10 people visit a Macy’s store or Macys.com every year.

Macy's, DunnhumbyUSA, Retail Localization, NRF 2012

The resulting was a shift in focus away from attracting new customers to retaining and cultivating their existing base through a sweeping loyalty initiative.

In other words, they don’t need any more customers; they just need those who are already customers to spend more with them. To Macy’s, customer loyalty is now key. To do this, they had to put the customer at the center of all of their decisions.

This new directive led to the creation of a new common customer language, one that was used to retrain their workforce and launched MyMacy’s.

The new language centered on three key tenets: loyalty, behavior and engagement. Loyalty programs were established to create more instances to get customers back into the store. Macy’s became less focused on multiple sales and more on increasing the number of times customers entered their stores.

The theory being that the increase in sales would come as a result of multiple visits. Macy’s also established a number of analytics and performance indicators to track engagement and determine if their strategy was sound.

With this new informed customer strategy, Macy’s created a three-tier approach to increasing sales:

    1. 1. Retain and Grow Loyal Customers
      2. Develop Non-Loyal Customers
      3. Convert Non-Purchasers
  • The execution of this strategy lied in the personalization of the in-store and online experience. According to Macy’s, consumers are looking for you to acknowledge that you know them, that you care about them and are thanking them for their business. They also added that if they own it, customers should be able to buy it right then and there.

    This lead to a localization campaign making each Macy’s store unique based on the needs and wants of their customer base in that area.

    They then asked themselves, could you personalize direct mail?

    Macy’s initiated an unprecedented direct mail campaign printing 500,000 unique versions of a single direct mail book. Their reason being that if an individual received a piece of mail that was tailored to their interests, they would be more likely to make a sale. This campaign reached over 4 million people. As Macy’s saw it, it was the ultimate expression of their new informed customer strategy.

    Macy’s now sets its sights on personalization throughout the digital landscape where each correspondence will be unique to the receiver. This is their goal for the future.

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