Macy’s History- How Did It Start?

Macy's History- How Did It Start?

In 1851, the first Macy’s store opened its doors in Massachusetts to serve the needs of mill workers and their families. The store failed, and so did several others still opened by Rolland Hussey Macy. However, that did not discourage Macy, and today, Macy’s is one of the leading department stores in America. After over a century in business, Macy’s looks different from its beginning and the storms it has weathered. There was no parade or counters at the beginning of Macy’s, only the dry goods. Knowing Macy’s history will help you understand the brand better and how it grew to become the go-to place for most people to fulfill their shopping needs. This article explores Macy’s history to help you understand how the department store began. Without further ado, let’s dive in. 

Macy’s History – The Beginning

The founder of Macy’s started his career as a crewman on a whaling ship. The red star that makes up Macy’s logo arrived during this period of his life. He had the red star tattoo on his arm, which became the inspiration for Macy’s logo. Rowland Hussey Macy was famous for his inventiveness, and his store was the first to have the same price for an item for everyone. Bargaining was fun then, but the idea of a set price was new and welcome. 

Macy’s history isn’t complete without mentioning the flagship store opening in 1902. To date, the store is right there. Roland Hussey Macy had an idea to open a department store for mill workers and their families to meet their shopping needs. However, that didn’t work out, and he set out to find a suitable customer base for his products. The products Macy offered were ahead of their time. An example was towels in varying colors, which was unusual in the 19th century. After failing at the first department store in Massachusett, Rowland’s next best idea was opening a store in New York on 6th Avenue. 

Macy’s brand was a great success from the opening, and as the name continued to establish itself, sales increased exponentially. Soon, Macy’s was a household name and everyone’s go-to for their shopping needs. In 1902, Rowland decided to move the store to Herald Square. This location promoted the department store and drew locals and tourists alike crowds. Macy’s soon became a top employer in New York. 1902 was when many women entered the workplace, and working at a department store opened up possibilities for an ambitious woman.

Macy’s History – The Macy’s Day Parade

One popular day in Macy’s history is the Macy’s Day Parade. The first parade was in 1924 when Macy’s staff collaborated to organize it. Although it wasn’t as extravagant as recent parades, it had a quarter-million attendees. The parade featured live animal attractions and popular circus performers. The idea of the parade was to perform a significant publicity coup for the department store. Macy’s held it on Christmas Day before it got moved to thanksgiving. The parade helped just in time to kick off the shopping season. 

By 1927, the attractions at the parade switched from wild zoo animals to balloons and ornate floats. One of the first was Felix the Cat, a giant-sized animated character that required several hands to keep the cat afloat and prevent it from floating out of control. In those days, the workers cut the balloon loose after its complete duty. However, the giant character was deflated and stored for the following year due to rubber scarcity. 

Today, the Macy’s Parade balloons recently let you know who’s in style. It could be Sonic the Hedgehog, SpongeBob the Square Pants, or a new classic character like Popeye, Charlie Brown, etc. Marching bands from all over the country still show up for Macy’s Parade to date. The classic 1947 movie ‘Miracle on 34th Street’ revolves around the store’s Santa. Macy’s history shows that the store played an essential part in 20th-century American pop culture.

Macy’s History – Macy’s Expansion

This department store began to expand nationally in the 1960s with a store on Queens Boulevard in New York. However, this department store only started opening stores outside New York City in 1983. The first store outside this location was in Aventura Mall in Miami. Other stores soon followed in Florida, Dallas, Plantation, New Orleans, and Houston.

In 1986, the CEO of Macy’s led a leveraged buy-out of the store and then lost a takeover battle against Federated Department Store. Soon after this, several rebranding and acquisitions took place between 1980 and 1990.

The Modern Era

In 2005, Macy’s acquired the May Department Stores and rebranded its stores like its Chicago store. This move was met with opposition by Chicago locals because the store in Chicago had been in operation long before Macy’s was founded. Due to the rebranding efforts, Macy’s stores increased, and soon, the company had over 850 stores in the U.S.

Although Macy’s history shows that the store has been quite successful over the decades, it isn’t immune to the effect of online shopping. In January 2015, Macy’s announced that it would be closing 14 stores across the country. By September, the company decided to close 35 to 40 underperforming stores. By January 2016, Macy’s decided to lay off over 4,800 employees to save $400 million. This downsizing came after a disappointing holiday sales season. By January 2016, Macy’s was down to 770 stores. The company continues to close down stores. The Department store decided to close 100 stores and lay off 10,000 people in early 2017. This move helped save the company $550 million, which is invested in its online business and growth stores.

By February 2019, Macy’s Inc Stores were 867, including Bloomingdales, Backstage, Bluemercury, Macy’s, and Story. Out of the stores, only 641 were Macy’s. The company’s shares continued to fall, and it was at its lowest in August 2019 when the shares became $15.82.

Macy’s History – Macy’s Growth Strategies

Macy’s Department Store has been making a turn from its struggles in recent times. The strategic initiatives below helped the struggling department store rebound. The retailer utilized different strategies, which we will be exploring in this section of Macy’s history.

Redesigning the Loyalty Program

One of the ways Macy’s could turn their situation was through their Loyalty program. Although the loyalty program was always there, the company redesigned the program and opened it to all customers irrespective of their payment method. This was a different concept from the original program that required shoppers to use their branded Macy’s card if they wanted to receive benefits from the loyalty program. The loyalty program came in tiers, as explained below.

  • Bronze: This is the lowest tier in the loyalty program and allows all customers to enjoy star money days, a birthday surprise, and different perks and offers.
  • Silver: This tier is opened to customers who spend up to $499 at Macy’s Department store. Such customers will receive 25% off any day they want using the Star Pass coupons.
  • Gold: This is the third tier of the loyalty program and is open to customers that spend up to $500 to $1,199 annually at Macy’s. Such customers will receive 25% off any day they prefer using the Star Pass coupons and free shipping on their Macy purchases.
  • Platinum: This is the final tier in the loyalty program and is open to customers that spend $1,200 or more annually at Macy’s. Such customers will enjoy free shipping on all their purchases, 25% off using the Star Pass coupon, and a 5% back in rewards on every Macy’s purchase they make in-store and online.

The store has enjoyed immense success through the loyalty program, especially with the platinum tier. Overall, Macy’s experienced a positive change in behavior amongst their customers. There are new shoppers every other day, and customers choose to spend more for a chance at the benefits.

Expansion of Its Backstage Stores

Another strategic initiative Macy’s implemented was the expansion of the Backstage store. Backstage is an off-price brand owned by the company. The company opened 47 new Backstage stores in the second quarter, making it 65 openings in the year’s first half. Opening backstage stores create a ripple effect for the company by making the existing stores more productive. The new stores also work to give customers exciting new experiences. Additionally, the new location works to bring new customers into the brand. 

Expansion of Assortment

One way the brand has continually grown is by expanding its assortment—the company partners with vendors that are willing to handle fulfillment. The new system is quite identical to the marketplace model that many retailers already implement in their business. This expansion means that the unique assortments will include new brands, categories, and old Macy’s well-known brands. The new option aims at connecting Macy’s with a higher customer segment. 

Macy’s is counting on a mixture of art and tech to formulate their success formula in the store. The brand aims to increase the number of its digital sales without handling the fulfillment. In addition to this strategy, Macy’s relies on analytics to help it understand its shoppers’ needs. This information will help the department store craft its offering to meet the customers’ needs and demands. 

Store Fulfilment

Another way that Macy’s has grown over the years is with the expansion of its pickup program. This is the online store and the in-store purchases. The store has expanded its buy online pickup-in-store provision to 50 stores. Additionally, the store is refining its services by focusing on an improved customer experience. Macy released the ‘At Your Service’ station in all its stores to facilitate this. These stations aim to make pickup seamless and quick for shoppers around the country.

The Growth50 Initiative

The Growth50 initiative is to enhance 50 Macy’s stores throughout the chain. This initiative kicked off from the test location in New Jersey, where it was a success. The stores have been a success like the company expected. By adopting an improved trend in its stores, there’s also an improvement in the store’s customer satisfaction. This shows the company that the shoppers see the changes they’re making, and they appreciate it. The Growth50 strategy focuses on presentation, promotion, product, people, and process. 

Macy’s History – Final Thoughts

Macy’s history is one of struggles and success. It clarifies how the department store grew to become the retail giant it is today. Macy’s logo is one of the most recognizable logos in the country, even for those who are not department store enthusiasts. We also explore the strategic initiatives that the brand implemented that resulted in tremendous success.

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Macy’s History- How Did It Start? Macy's history explains how the retail giant began and how it rode through the waves of change to cement space in retail history.
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