June 30, 2012: Macy’s Expedition

I’ve always been fascinated by retail merchandising and the way it responds to human behavior in order to facilitate sales. When I have a moment, I make it a point to visit Macy’s to see the Martha Stewart Collection. I like to spot new items and pay attention to the way the line is being merchandised by Macy’s. Obviously, placement in the store–near high-traffic areas, in very visible locations, with plenty of room to display adequate stock–is key to successful sales. Sadly, the San Francisco flagship store has not done well by Martha, I’m afraid. In the photo above, you can barely see the Martha Stewart Collection’s whiteware items, whereas Macy’s house brand, The Cellar, is positioned prominently by the aisle. If you look carefully in this photo, you can see the large table of whiteware behind the tall fixture with the blue Martha Stewart logo on it. (The right-hand edge of the table is to the right of the tired shopper, seated and talking on her mobile phone.) Also notice the lighting in this photo: The Martha Stewart logo is in shadow, while the well-stocked table of The Cellar items has three bright lights directly overhead.

Elsewhere in the Housewares Department, I found plenty of Martha Stewart Collection items in the middle of the aisle. Unfortunately, these were all on clearance. They were marked down, and shoppers could enjoy an additional 30-percent off the lowest price. The rear wall in this photo is lined built-in shelves, stocked with Martha Stewart Collection cookware. Only problem is, this wall is literally the farthest away from the escalators and elevators that service this basement level. In both photos, the clearance areas are directly adjacent to these locations–and you can bet Macy’s isn’t placing clearance tables in what they consider the “prime” areas of the floor.

It is also worth noting that these are NOT the locations on this floor where the Martha Stewart Collection could be found when it launched in 2007. Then, the collection was placed very prominently in the store, and merchandised beautifully with table settings and seasonal displays. Subsequently, this floor went through a number of remodels and the Martha Stewart Collection was moved to the less-desirable locations shown in these photos. I mention this because, as part of the countersuit against Macy’s, MSLO is claiming that Macy’s has not properly supported the Martha Stewart Collection in its stores. The countersuit claims that Macy’s has demoted the collection to “loss leader” status–whereby it advertises the collection but once shoppers come into the stores, they are presented with Macy’s house brand items (which are more profitable for the store) that are better positioned and better stocked. Based on what I observed this past Saturday, I’d say MSLO is spot-on.

Macy’s CEO Terry Lundgren is scheduled to be deposed tomorrow as part of the court case, and the hearing is scheduled for July 13. At stake is MSLO’s ability to open the Martha Stewart shops inside J.C. Penney stores in 2013.

If you’re interested, you can read about a previous Macy’s Expedition here.

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