Retailer Daily writes today that Macy’s is cutting 7,000 jobs and expanding their My Macy’s programs. We think this is a sign of hope for independent retailers who capitalize on their unique strengths: while Macy’s is reducing staff, they are increasing the focus on the customer and local market customizations, long the domain of independent retailers.
Macy’s decision is a strong sign that local, independent retailers will be in the best position to grow during recovery. The job cuts at Macy’s account for 4% of their staff, with 2,850 of the 7,000 cuts coming from their three headquarter offices. About 40% of Macy’s executives are gone. At the same time, the company is expanding the number of employees who plan and merchandise stores at the local level. Macy’s is shifting planning from the national level to local districts to better serve the individual markets.
From the press release:
In order to concentrate more management talent in local markets and reduce "span of control," all Macy’s stores nationwide will be grouped into 69 geographic districts that will average 10-12 stores each, effective in the second quarter. Of those, 49 will be newly created districts. The other 20 districts (in the Midwest, Upper Midwest and Pacific Northwest) were created as pilots in spring 2008 and will remain in place.
The nationwide district structure will position Macy’s to develop and implement more effective strategies for identifying and serving specific consumer needs location by location. This is consistent with ongoing development of customer-centric business initiatives to leverage knowledge of customer segments to drive same-store sales, profitability and customer loyalty. Macy’s is working in partnership with consumer insight firm dunnhumbyUSA on these initiatives under an exclusive arrangement announced in 2008.
The last few months have seen a steady flow of layoff announcements from retailers, but few have announced shifting resources to local efforts. Too many retailers are hunkering down, rather than re-allocating. Macy’s thinks shifting staff from the national to local levels will position them to benefit from the recovery:
These moves will prepare the company for accelerated growth once the economy recovers while reducing previously planned expenses by approximately $400 million per year beginning in 2010 (and $250 million in the partial year of 2009).
Macy’s maneuvers are a validation that independent retailers can emerge from the recession stronger than they were before. Consumers are coping with the recession by re-using and repairing instead of replacing, finding inexpensive recreational activities at home and in their communities, and thinking more about shopping in their local communities. When the economy recovers, consumers’ interest in quality, service, and locality will directly benefit the local independent retailers that are ready to receive the business that once went to big box retailers and malls.
{ 1 trackback }
{ 0 comments… add one now }