Get Local - Build Sales Productivity
After decades of consolidation and acquisition, Macy's has announced the "
My Macy's" initiative, which it describes as a "customer-centric localization initiative" designed to "drive sales with merchandise assortments focused on local customer needs and preferences in each location". Whether a company with such an ingrained centrally managed "top down" culture and history can realize these goals will be fascinating to watch.
The larger question is whether this kind of initiative is worthwhile and what it takes to make it successful.
There are some great examples of successful retailers that utilize this approach. Wal Mart, Bed, Bath and Beyond, Home Depot (pre-Nardelli), and Whole Foods have have been very successful, in large part, due to a
shared cultural focus on making the individual selling floors the corporate "center of gravity". Focusing on Bed Bath and Beyond, the corporate office is considered a "support function for the sales floor", which is quite different from most large retailers. There are strong channels of communication and shared decision-making between field and corporate managers. There is substantial decentralization of inventory level decision-making for all replenishment inventory at the individual store level, along with significant energy expended on individual regional and market assortment additions and edits. Both field and central merchants share a common primary performance metric of sales per square foot per store. As a result, sales per square foot have risen over 30% in the last decade. To put this into a competitive perspective, in the mid-90's Bed Bath and Beyond and its direct competitor Linens n' Things, which had a very "top-down" culture, shared the same volume and the same market capitalization. 10 years later, Bed, bath was doing over twice the volume and had 12 times the market cap of Linens. Two years later, Linens went into Chapter 7. Obviously, there are many elements of Bed, Bath, and Beyond's success, but building and maintaining a strong connection to local markets has been a major contributor.
Talking about re-establishing this local connection is easy, migrating to it is difficult. Being successful at accomplishing this requires, almost inevitably, a major change in the current company culture, shifting from a strictly top-down approach to a more collaborative approach with shared responsibilities and authorities. Changing a culture is, to say the least, complex. Over time cultures become self-sustaining, attracting and retaining people that are comfortable within that culture. Accomplishing a change of this magnitude requires an absolute commitment from the top down, shared measures of success, internal champions, extensive education and, ultimately, a lot of new faces. As difficult as this is to accomplish, it's worth the effort. Ask the folks at Bed, Bath and Beyond.
So the question for all retailers today becomes - how local are you?
Tough sales and a wary consumer have moved several big retailers to focus on "getting local". Getting local is defined as providing an assortment and in-store experience that speaks specifically to an individual store's customers. 
Customer frugality is not only a reality, it's now considered the new "cool". Obviously inventories need to be lowered to match a lower demand.