Macy’s & Lands’ End Case #4 Pg. 375

Macy’s & Lands’ EndCase #4 Pg. 375 Ryan Platt Anthony Pemberton Kendra Platt Daisaku Okada Bryan Gauthreaux Jordan Thompson

Macy’s History and M & A • Founder Rowland Hussey Macy started company as R.H. Macy and Co. • Started as a small, fancy dry goods store that opened in New York City in 1858. • Went public in 1922 and began to open regional stores and take over competing stores. • In 1923, the Toledo-based department store LaSalle & Kock was acquired; the next year, Davison-Paxton in Atlanta was acquired and in 1936, the Newark-based Bamberger's was purchased. • In 1945, the company expanded west and purchased O'Connor Moffatt and Company in San Francisco. • On December 19, 1994, Federated Department Stores (FDS) merged with R.H. Macy & Co., creating the world's largest premier department store company. • As of November 2003, there are 248 Macy's stores in twenty-one states, Puerto Rico and Guam. Kendra

Macy’s Company • Federated, with corporate offices in Cincinnati and New York, is one of the nation's leading department store retailers with annual sales of more than $15.4 billion. • Federated currently operates more than 460 department stores in thirty-four states, Puerto Rico and Guam under the names of Macy's, Bloomingdale's, Bon-Macy's, Burdines-Macy's, Goldsmith's-Macy's, Lazarus-Macy's, and Rich's-Macy's. Federated also operates macys.com and Bloomingdale's By Mail. • Terry J. Lundgren, Chairman/CEO & President of Federated Department Stores, Inc. • Federated Department Stores as 113,000 employees • Stock: FD approx. $52.66 • Products include men's, women's, and children's apparel and accessories, cosmetics, and home furnishings. Kendra

Macy’s Website • Federated embraced e-commerce as a competitive necessity in the mid to late 1990s • Its initial implementation of macys.com-- like those of its competitors—operated as a standalone initiative, disconnected from the company's business operations. Federated abandoned this approach in favor of a deeply integrated model, with linkages between its Web sites and its backend systems—a configuration referred to as “integrated multi-channel retailing.” • the WeddingChannel.com is a partnership that allows brides to set up a wedding registry. The site is managed by third-party owners but it is fully integrated with Federated's backend systems. This integration is crucial to Federated's ability to use WeddingChannel.com as a third-party sales channel. • The macys.com and weddingchannel.com sites handle approximately 30 million hits from 260,000 unique visitors per day. Kendra

Macy’s (Federated) IT Platform • Macy’s platform integrates all of its sales channels into one seamless system using solutions from IBM and its DB/2 database package. IBM used middleware to tie all of Macy’s different systems together to create a real-time system. • Macy’s uses XML for its web infrastructure and product data is updated in real-time. Ryan

Macy’s Suggestions • Integrate Virtual Model Technology • Improve search engine rankings • Offer customers an “advanced” search box with additional specifications such as sizes, colors, etc. • Convert hyperlinks like: http://www.macys.com/catalog/product/index.ognc?ID=16497&CategoryID=7917&LinkType=EverGreen to more search engine friendly links like: http://www.macys.com/catalog/product/id/16497/7917 Ryan

Daisaku Macy’s Financial

Lands’ End History • In 1963, Gary Comer introduced Lands' End in a basement, along the river in Chicago's old tannery district. • In the second year, created the first catalog, the “Lands' End Yachtsman's Equipment Guide” • Moved the company to the little town of Dodgeville in rural Wisconsin. • Now headquartered in Dodgeville, Wisconsin. Kendra

Lands’ End Company and M & A • Lands' End has a number of sales channels. The company markets its products through its main catalog and specialty catalogs (such as Lands' End Kids and Business Outfitters). It also runs about 30 outlet and retail stores in the US, UK, and Japan, and its products can be found in about 370 Sears stores. Lands' End is expanding its Web presence worldwide, but catalogs continue to be its primary means of marketing. • Lands' End is the nation's largest specialty clothing catalog company and the biggest Internet seller of clothing in the U.S. Today • President and CEO Mindy C. Meads • Employees 10,200 • Sears acquired Lands’ End in a cash deal valued at approximately $1.9 billion in May 2002. • Its traditional, casual apparel for men, women, and children is generally immune to the changing tides of fashion. Lands' End also sells accessories, home goods, luggage, and corporate gifts to its primarily middle-aged customers. Kendra

Lands’ End Website • Lands' End launched its Web site (www.landsend.com) in 1995. • Web sites have been launched in the United Kingdom, Japan, Germany, France, Ireland and Italy. A separate Business Outfitters Web site (www.landsend.com/businessoutfitters) offers company incentives, rewards, gifts and group apparel. • In 1998, landsend.com was the first Web site ever to make My Virtual Model available to online shoppers. • My Virtual Model has become landsend.com's second most popular shopping tool (second only to the "search" function), seeing more than 1.2 million new personal models created during the past 18 months. Daisaku

Daisaku

Lands’ End Key Technologies • Virtual Model that allows you to try on clothes virtually using technology from My Virtual Model. Customers who use the Virtual Model have a 34% higher conversion rate. • Lands' End makes its entire product inventory available on its site. It can sell products that are in season or out of season to anyone, anytime. • 3 electronic purchasing methods for its corporate customers: the company’s Web site, a customized corporate portal, or via an e-procurement platform such as the one it created through its partnership with Ariba. Ryan

Lands’ End Key Tech Continued… • Real-time customer support chat • Sun Systems 8-processor machine running Solaris UNIX • Vignette Software to deliver the gift cards • HTML 4.0 to service the majority of browsers • CGI and C++ for checkout features • MQ access to legacy IMS Mainframe systems • Advanced email capabilities designed and implemented by Covansys, and processed through a Web-based mail Application Service Provider to the recipient • Web Server running Apache Web Server Software Ryan

Lands’ End Suggestions • Better, more prominent results filter. Currently the filter lets you sort by popularity, price and alphabetical list, but it's buried one page into the results. • More search engine optimization for keywords such as: “online shopping, online clothes, clothing” etc. • Partner with Froogle (Google’s low price search engine for consumer items) • Remove session ids from links to that search engines will spider more pages Ryan

Lands’ End Website Notes Ryan

Daisaku Lands’ End Financial

Trust • Most customers will not shop at a web page if they fully do not trust the end-to-end transaction of the web page. • Macy’s inventory levels are tied to the companies websites to insure the customers that the product they bought is not sold out. • Updates are regularly done to give the website integrity and reliability for customers use. • Prices should be reflected early during the purchase period. Bryan

Categories Categories consist of how fast the web-page can go from the front page to the product page. The web-site should have well differentiated pages within the site. Customers usually type key words or “trigger” words to find what they are looking for, so your search engine should have these “trigger words” to help find what the customer wants. Bryan

Search • The search engine text box should located in the same spot at the top of every page. • Make the search tolerant towards misspelling and accepting of most common mistakes by customers. • Most studies done show that if one search fails the odds of retaining that customer for that log on period decreases. • Macy’s had a poor search engine with regards to misspelled words and accepting common mistakes. Bryan

Product Page • The product page must have the most products displayed, also with the biggest pictures. • Macy’s has great volume of products per page with fairly large pictures. • People can zoom-in on products to see the fabric weave. • Macy’s gives a variety of products on one page but also gives related products that could benefit your purchase. Bryan

Navigation • Each page should be structured and navigational in a similar form to give the customer familiarity. • Macy’s pages are structured the same with the search engine in the same spot and the categories listed across the top. • Most designers create a shell to give the website pages the similar look that customers want. • The only problem with the shell is that it contains too many generic links. The majority of the time customers are disappointed with the results of generic links. Bryan

Competitors • GAP, Inc. has created an online program where one can visit its “Image Library” to simply download images of each season’s newest looks for its GAP, Banana Republic, and Old Navy online stores. • Prada’s customer focused website allows customers to place products in a virtual “closet” (like a wishlist) and if the item goes on sale before the customer purchases it, the customer will be immediately notified. This virtual closet also allows customers to interact with sales associates to discuss and match items to get an opinion on “what looks better.” • Gucci has designed a program that allows a customer to have desired items of clothing sent, for instance, to their hotel room upon request by ordering an item from their website and trying it on before actually purchasing it. Jordan

Cont. Competitors • Rockport has teamed up with the youth focused company Dubit to launch the world’s first 3D online shop as a strategy to help build relationships with teenagers. • Rivers West Apparel, Inc. has recently launched a website allowing customers to go online and design their own waterproof vests through its customer design apparel website. • Saks Fifth Avenue has taken a different approach to e-tailing by offering a vast majority of online products that most other companies in the industry do not offer online. It has also implemented Blue Martin’s Customer Interaction System software to maintain a close connection with its online shoppers. • Abercrombie & Fitch has recently decided to discontinue the release of its A&F Quarterly and A&F Holiday due to, among many other reasons, excellent performance of sales generated online and through its physical store locations. Its website will now be the exclusive home of the controversial Abercrombie image. Jordan

#1. Visit the Macy’s website. How does it measure up to the five shopability criteria discussed in the case? • 1. Trust- Macy’s provide customers with accurate information on stock availability. Also, Macy’s provides accurate order information for their customers and provides up to minute shipping information. • 2. Categories- Macy’s offers the following categories: Bed & Bath, Dining, Housewares, Women, Men, Ginxy, Kid’s, Jewelry, Beauty and SALE. • 3. Search- Put in the top left corner with a “star” Go button. Having a good search engine is crucial in sales. Usability studies have shown that if the first search fails, odds sharply decrease that users will find what they want. • 4. Product Pages- Customers can zoom on product pictures to see fabric weave. • 5. Navigation- Site designed to be specific according to the products. (IE..people want to see the fabric on sweaters but not bathing suits) Anthony

Macy’s Trust- offers better shipping and order information Lands’ End Trust-offers predominant customer service center aiding in sizes and fabric characteristics #2. Now compare Macy’s to Lands’ End in each category. Which is better? Explain your choices. Anthony

Macy’s Categories-more categories than Lands’ end but comparable Search- bolder heading and better attention getter Lands’ End Categories- More general Men, Women’s, Kids etc… Search- more detailed, search by subset categories for better ideal results #2. Continued Anthony

Macy’s Product Pages- More detailed and narrowed by category.(ie..Men’s suits, pants) Navigation- User friendly and quick. More colors make pages more aesthetically pleasing to the eye Lands’ End Product Pages- general layout but offers more choices in colors and styles Navigation- more tedious, must go through numerous pages before seeing product #2. Continued Anthony

#3. What are several other website design suggestions that either website could make to improve their shopability? Explain your suggested improvements. Macy’s • It might be hard for the users to see each of products, because all of colors used for the web design is white base. => should use different colors. (compared with the web site of Wal-Mart) • Incorporate virtual model technology into product engine Lands’ End • As for the “search”, although a certain term is input, the result seems to be a “wide-range”. The result should be narrower and more specific. For both of them • In looking for some products, the users may want to specify what they want. Both of those web sites should have, so-called, an “advanced search” to enable the users to find out the products directly and immediately from the open page. Daisaku

Macy’s & Lands’ End Case #4 Pg. 375