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In the movie classic Miracle on 34th Street, perhaps the biggest surprise was when Kris Kringle put Macy’s customers’ needs first and sent a mother to a competitor to find the fire engine her son demanded for the holiday. But with bigger stores and more options, the intimate retail experience in which salespeople know the preferences of their customers seemingly has disappeared. Macy’s is trying to bring back the miracle by emphasizing personalization in its My Macy’s program—a company-wide initiative to provide better service to local customers.

In particular, though Macy’s remains centrally run, each store’s assortment varies somewhat, depending on the local market. The goal is to make Macy’s relevant to customers who shop their local stores to take advantage of local marketing programs and purchase items appropriate to the location. A Chicago-area store thus hosts the Macy’s Beach Party program, targeting approximately 65,000 college students from 10 nearby campuses with fun spring break–oriented clothes that will appeal to them now, as well as remind them to return when they need to buy suits for their first job interviews.

This personalization effort also relies on knowledge about specific customers that may not relate to their location. In line with its database analysis, Macy’s therefore mailed 30,000 versions of its catalog to customers, depending on customer-specific information. Each catalog version varied from 32 to 76 pages in length, encompassing more or fewer pages of footwear or children’s clothing, as necessary.

Targeting customers with promotions on products they like or are interested in is critical to building a relationship with those customers. PetSmart might even have something to teach Macy’s: A customer buying crickets received a $2 coupon for live worms. Confusing? The PetSmart coupon explained: “Crickets are an important part of a reptile’s diet—but did you know that worms are an even better source of energy?” Thus the reptile lover became intrigued and added worms to the menu for his beloved reptile.

Discussion Question: Are there any risks to such personalization strategies?

Natalie Zmuda, “Retailers on Quest to ReKindle the Personal Touch of a Bygone Era,” Advertising Age, February 14, 2011.