Question

Case 2 Macy’s races ahead with Mobile Retail strategies
Mobile devices, particularly smartphones, have become a key tool in the arsenal of modern day shoppers.
Using barcode scanner apps, customers in brick-and-mortar retail stores can quickly compare prices with other
stores and online retailers. They can access product information, check expert and consumer product reviews,
and even purchase products from online retailers. This practice, called showrooming, represents a significant
threat to many traditional retailers who continue to ignore the impact of mobile consumer behavior.
Showrooming is frustrating to retailers who bear the costs of providing sales support, product inventory and
maintaining a store front, only to see customers purchase products at a lower price from an online retailer with
lower overhead costs. Target recently wrote to several of its vendors asking them to create special products,
only sold in Target stores, in an attempt to stifle consumer comparison shopping via mobile devices
(Zimmerman, 2012). But other retailers, recognizing the pervasive nature of mobile shopping trends, are
developing strategies to embrace and engage the mobile shopper.
Department store giant Macy’s (Figure 7.1) is recognized as a pioneer when it comes to using mobile
technologies to enhance the shopping experience of its customers (Figure 7.2). Macy’s uses in-store displays
to encourage customers to use mobile devices while shopping. The Backstage Pass Program is designed to
enhance the in-store shopping experience at Macy’s. Using quick response (QR) codes and short message
service (SMS) technology, customers can easily access fun and informative 30-second videos that highlight
the retailer’s celebrity designers and fashion experts (see related videos at youtube.com/Macys). Mobile
shoppers can access the videos by scanning the QR codes posted on displays in each department. Shoppers
who do not have a QR code scanner can access the videos by texting a special keyword to Macy’s using codes
supplied on the displays. Backstage Pass is an example of what marketers call a mobile display strategy. It is
supported by an integrated communications campaign involving traditional television and print media
advertising. Macy’s can measure customer interest in the program by tracking the number of times customers
watch the videos. Based on the initial success of the program, Macy’s has increased spending on mobile
display strategies by 70 percent (Kats, 2012).
Another key mobile strategy used by Macy’s is the SMS database strategy, growing its list of customers who
have opted-in to receive discounts and special offers via text message. According to Martine Reardon,
executive vice president of national marketing at Macy’s, New York, the retailer is including SMS short codes in
most of its printed coupons to encourage customers to opt-in to receive coupons and other offers via text
message. Macy’s customers have responded well to these kinds of promotions, so growing the list of people
who opt-in to this program should be easy.
With its mobile check-in strategy, Macys has partnered with Foursquare and Shopkick to create check-in
programs that reinforce shopping behavior at retail outlets. Mobile customers using the Shopkick app on their
phones receive points on their account just for visiting a Macy’s store. They may also receive special offers
from Macy’s via the Shopkick app when they visit particular departments or scan featured merchandise. The
points can be redeemed for restaurant vouchers, iTunes gift cards, and gift cards from a variety of participating
retailers. Macy’s partnered with Foursquare and a charitable foundation created by insurance company Aflac.
For every consumer who checks-in at Macy’s via the Foursquare app, Aflac donates $1 to its charity, The Aflac
Cancer Center and Blood Disorders Service of Children’s Healthcare of Atlanta. Aflac made the same offer to
customers who checked-in while watching Macy’s famous Thanksgiving Day Parade, using an entertainment
check-in service called GetGlue.com (now called tvtag.com). These kinds of partnerships and programs not
only reinforce store shopping behavior, but also enhance Macy’s positive brand reputation among target
consumers.
Via the mobile payment strategy, customers can pay for products at Macy’s using Google Wallet, a mobile
payment app (Figure 7.3). At the register, customers simply tap their phones on a Near-Field Communications
(NFC) device in order to transfer funds to Macy’s. Google Wallet is one of several approaches to mobile
payment competing to become the dominant alternative to traditional credit cards. Mobile payment is expected
to become widespread in the near future as banks, retailers, and telecommunications companies gain
experience with the technology. (Read more about mobile payment in Section 7.5.)
In an augmented reality strategy, during the Thanksgiving and Christmas holiday season, Macy’s runs a
program to benefit the Make-A-Wish Foundation. Over the past few years, Macy’s has donated $1 for every
customer who visits a store and “mails” a letter to Santa. In 2011 Macy’s made that visit even more fun, inviting
customers to take pictures of their children in special holiday displays using augmented reality apps that
inserted one of the animated characters associated with the campaign into the picture. Pictures could then be
uploaded into a holiday card template, shared by e-mail, or posted to the customer’s Facebook page.
While other retailers are still trying to understand mobile consumer behavior, Macy’s is already adapting to a
new retail environment where increasing numbers of consumers are using handheld devices. It has shown that
traditional brick-and-mortar retailers can enhance the in-store shopping experience using mobile technologies
in a variety of ways.
Questions
1) Describe how each of Macy’s mobile retail strategies enhances the in-store shopping
experience of customers.
2) How does Macy’s benefit from the use of location-based apps like Foursquare and Shopkick?
Why are retailers likely to view technology as both a blessing and a curse?
3) Describe how an Omni-channel retailer is likely to be different from a traditional, singlechannel retailer?

Answer 1

1) Macy’s mobile retail strategies enhances the in- store shopping experience of customer by the following factors:

1. By encourage customers to use mobile devices.

2. By providing video access by the help of QR Code or Short Message servicing technology. This enhances the usage of technology among the customers.

3. Customers who have opted for SMS will in to receive discounts and special offers via text message.

2) Macy’s benefit from the use of location-based apps like Foursquare and Shopkick as the positive brand reputation would be created among the customers. This is because the donation money goes to cancer patient and the customers would get points for shopping in Macy stores and they will get vouchers to utilize at restaurant, etc. This definitely develops the positive image about the Macy stores.

The retailers likely to view technology as both a blessing and a curse because of the following reasons:

1. It makes the process easy and fast but takes control of uses information.

2. Every time sending SMS by the retailer side weather we are in need or not will fells irritated but sometime makes some purchase meanings as the discount when started etc.

3. Comfortable in handling but difficult when the system failure or any network issues.

3. The Omni channel is different from the traditional channel of retailing as it has the power to recognize the range of channels the customers prefer while purchasing but also considers the interactions in this process that the customer have in traditional shopping. It actually concerns about the needs, communications, and interactions between customer, brand, and retailer. Thus, social media plays important role here. In other hand single channel prefers the tradition way of shopping such as only one distribution option although they are dealing online.