Macy's has learned a hard lesson: when you take away a consumer's coupons, the consumer stops shopping. For years, Macy's essentially trained shoppers when to shop by having coupons at certain predictable times of the year. But when Macy's bought out big store chains such as Filene's and Foley's they stopped the coupons. Guess what? People stopped shopping. It was a retail disaster of unimaginable proportions. Foley's customers expect massive coupons, red apple shopping days, the works. You can't just yank those away and expect longtime customers not to be grumpy about it.
For years, the department stores that Macy's acquired, like Marshall Field's and Filene's, had relied on 15- and 20-percent-off coupons to alert people, like a Pavlovian bell, that it was time to shop. As part of its reinvention, Macy's tried to wean shoppers off them.
But the tactic backfired. With fewer coupons to clip, thousands of people from Washington to Los Angeles turned their backs on Macy's.
Now the company's chief executive, Terry J. Lundgren, one of the brightest stars in American retailing, is pleading mea culpa - and backtracking. Macy's pledges to issue plenty of coupons for the holiday shopping season.
It's a lesson that other companies have also learned the hard way. Since the first coupon was issued for the Coca-Cola Company in 1894, companies have occasionally tried to take them away - and suffered. Cuts by the Ruby Tuesday chain in 2004 hurt sales. Procter & Gamble's effort in 1996 led to boycotts.
Even in this era of Internet shopping, it seems, Americans are wedded to a low-tech form of marketing: the dotted-line clip-out coupon.
For years, Karen Gundling, 41, a communications consultant in Parma, Ohio, relied on 20-percent-off coupons from Kaufmann's in Cleveland to buy shoes. Then Macy's took over. "Now that Macy's doesn't do coupons, I don't buy shoes there," Ms. Gundling said.
Curbing coupons was not the only change that upset shoppers.
In 2005, Macy's, then known as Federated Department Stores, acquired May Department Stores, which owned 11 storied chains around the country, like Foley's in Houston and Robinsons-May in Los Angeles. Last year, Macy's changed all the store names, a move that upset loyal shoppers. Mr. Lundgren said the new chain, with 800 stores and $27 billion in sales, would be big enough to secure exclusive product lines from big names - as it did, with Elie Tahari and Martha Stewart - then blanket the country with advertisements to let shoppers know about it. To complete the makeover, Macy's reduced its reliance on midprice clothing brands like Levi's and Dockers.
Mr. Lundgren tried to create a new kind of national department store that would no longer compete head-to-head with lower-priced competitors like J. C. Penney and Kohl's. But the changes amounted to "too much, too fast," Mr. Lundgren acknowledged in an interview. It turns out that men, in particular, are creatures of shopping habit. They want to go to the local department store and find the Dockers where they have always been.
People do love their coupons and once they're trained on reliable coupons, they just don't buy until the coupon appears. That's the free market in action, as Terry Lundgren found out. So, tell us this: if he's such a "rising star" in the retail industry, why didn't he know that? It's not rocket science. All he had to do was ask his mom or his sister, or if they weren't available for consultations, do some market research. There's a concept.
