Tuesday, December 25, 2012

Capitalizing On Christmas And Free Enterprise

"Our goal is to be a retailer with the ability to see opportunity on the horizon and have a clear path for capitalizing on it.  To do so, we are moving faster than ever before, employing more technology and concentrating our resources on those elements most important to our core customers."

Macy's Department Stores Mission Statement
Rowland Hussey Macy (1822-1877)

R.H. Macy accomplished a lot in a short 54 year life.  Leaving home at 15 to join a whaler company and sail the Atlantic Ocean, he worked there for four years.  During that time he acquired a large red star tattoo on his forearm.  That red star became the logo for his department store many years later.

Opening a "fancy dry goods" store in New York in 1858, his first-day sales totaled $11.08 (about $297 in today's dollars).  He plugged on however, with innovative policies like clearly marking prices (instead of haggling), and advertising those prices with lively and colorful newspaper ads.  His ads utilized set large-block letters, using marketing words and phrases over and over, and were instantly recognizable.  And he made history by hiring the first female executive for a major American retail store.

However, Macy had a lot to do with today's vibrant Christmas sales market.  He was the first to seize upon Santa as a way of selling goods, Christmas cards and wrapping paper.  He hit on this idea at the right time.  Nationally the Christmas tree was coming into vogue, as well as the recognition of Christmas as a religious and family holiday.

How did he capitalize on it?
  • He was the first to employ an in-store Santa in 1862.  Children came from all over to tell Santa their secret desires and Christmas toy wishes.
  • The country, and world, began to recognize Macy's as the instigator of the annual Christmas Parade.  This affair eventually morphed into the annual Thanksgiving Day Parade, which he used to kick off the Christmas buying season.  His parade was a marketing ploy for getting people to New York and to flock to his store at Christmas time.
  • Customers loved crowding outside his store to peer into the large, decorated windows, which advertised the latest in fashion, kitchen wares and toys.  His friend P.T. Barnum suggested he make them more elaborate by using moving figures to tell various Christmas stories.  The windows became the hit of the season, and a practice picked up on by many other retailers around the nation at Christmas time.
  • He began accepting mail order.

All in all, employing a capitalist spirit and shrewd business tactics (like mergers), the store eventually grew to be the largest department store in the world.  His short life left quite the legacy to the world of retailing success and free enterprise economics.

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