Bloomingdale’s:Inviting the Bloom Into the Store

• Federated Department Stores

• History of Bloomingdale’s

• Bloomingdale’s; Inviting the Bloom into the Store– Bloomingdale’s Answer to the Problem– Problems

• Research Design

Overview

• Federated Department Stores– Owns Macy’s, Rich’s, Lazarus, Goldsmith’s,

Bloomingdale’s, Burdines, and The Bon Marché

– Currently Owns 456 Stores in 34 States– Also operates direct mail services through

Macy’s By Mail and Bloomingdale’s By Mail

• In2002 Federated Department Stores reported $15.435 Billion in Net Sales– This was a 3% drop from the $15.651 Billion

in 2001.

• Bloomingdale’s has 31 stores.– 2002 Revenues were $1.7 Billion.– This was the highest sales revenue per

square foot out of all of the Federated Department Stores.

– This is almost double Rich’s sales per square foot.

– The only store with higher sales per square foot is Sears.

– 1 Compelling assortment of products

– 2 Improved shopping experience

– 3 Price simplification– 4 Enhance marketing

Federated Department Stores Four Key Strategies to Improve Performance and Innovation

• 1 Compelling Assortment– Editing assortment– Partnering with new name brands– Developing private brands

• 2 Improved Shopping Experience– Reinvent strategy– Remodeling– Technology

• 3 Pricing Simplification– Create best value program– Eliminate coupons– Competitive prices

• 4 Enhance Marketing– Shifting Advertising Dollars– Focused Newspaper Ads– New Marketing Systems

• Bloomingdale’s History– “It all started with the hoop

skirt.”– Started on April 17, 1872

as a dry goods store by Joseph and Lyman Bloomingdale in New York’s lower east side.

• The Bag– “It’s not just what you buy-

it’s what you take it home in, too”

– In 1961, Bloomingdale’s created the first designer shopping bags. Many since then have become collector’s items.

• Bloomie’s History (cont.)– By the 1970’s everyone was shopping at

Bloomingdale’s in New York.– Ralph Lauren, Perry Ellis, and Norma Kamali all

got their first opportunities at Bloomingdale’s.– Bloomingdale’s quickly became a sightseeing

spot for the public to see celebrities. Queen Elisabeth even visited the New York Bloomingdale’s.

• Bloomingdales: Inviting the Bloom into the Store– Bloomingdales developed a new

Customer-Friendly Design philosophy

– Asked focus groups to find customer related problems with the current store design.

• Focus Group’s found that the most common complaint focused on the lack of adequate lighting.– They suggested the use of natural light along

with the artificial fluorescent lights.– They based their decision of the fact that

clothing colors tend to look different colors in different types of lighting.

• Design Committee– Designed a new store

for the Adventura Mall in Miami.

– The design was a 220 ft. façade made entirely of glass.

• To fit in with Miami’s building codes the façade was covered by a metal screen.

• The metal screen was designed to let light in through very small perforations.

• It also was designed to prevent glare, fading of clothing colors, and sun damage.

• Because of the metal screen artificial lighting was also necessary.

• Both light sources together doubled the lighting in any other Bloomingdale’s.

• Was Bloomingdale’s correct in making changes based solely on the findings of focus groups? If not, what type of research design should have been adopted?

• Bloomingdale’s decision to use the focus group was both wise and unwise.– The focus groups allowed them to develop more in

depth ideas and gain a better understanding of the individual concerns than other survey methods.

– On the other hand, Bloomingdale’s should have used more than one survey method, such as secondary data and surveys.

– Bloomingdale’s should have also surveyed a similar area, such as Los Angeles, to get the opinions of a comparable market.

• Would a store in Miami want more light coming in through windows?

• What type of information available from syndicated firms would be useful for understanding consumer preferences for department stores?

• A plethora of information is available for retail organizations.– There are numerous firms who specialize in retail design, such

as Org-Marg.com which offers the following:• Benefit segmentation and positioning research • Brand health check • Concept testing • Communication development • Consumer profiling • Customer satisfaction and commitment studies • Diagnostic studies for enhancing customer loyalty • Effectiveness of communication and promotions • Efficacy of loyalty programmes • Loyalty programme development • Market mapping and consumer profiling • Mystery shopping exercise • Potential estimation • Store location studies

– There are also many published information sources which can be found in library databases.

• Discuss the role of projective techniques in understanding consumer preferences for department stores.

• Projective techniques are used to prompt an answer through indirect questioning.– Testing for an environment is difficult to do

when the subject is consciously thinking about their surroundings.

– A good way to test would be to run a study where the independent variable is the lighting in the room, but question them about the brilliance of the colors of the clothing.

• The design was so successful that Bloomingdale’s has used it in their new stores in King of Prussia, PA and Garden City, NY.

• The store in NY City is currently making plans to improve the lighting there.