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Case Study: Macy's Cause Marketing Efforts

Summary:

Despite the recession, Macy's increased it's cause related programs and supported them with substantial promotional budgets.  Macy's cause marketing allows Macy's to give back and promote a strong corporate citizenship.  The good image Macy's projects through their support they believe will come back to them in sales when the consumer has to choose between supporting Macy's or other competitors. Their campaigns also were recognized at the Cause Marketing award ceremonies.

Challenge:

Retail stores were one of the areas hit by the recession.  While some companies dropped previously supported causes and programs, Macy's wanted  to do more, even with the rough economic times.

What they did:

Macy's decided to continue to support programs, including forming partnerships with the American Heart Association, Feeding America, Make-A-Wish Foundation, National Park Foundation, Reading is Fundamental, and more than 10,000 other local and national charities.

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Macy's used the down economy and the eat-at-home craze in a campaign and partnership with Feeding America.  The campaigns called "Come Together," asked consumers to host dinner parties and have guests make a donation to Feeding America instead of the usual host gift.  Macy's plan was to match all contributions until a total of 10 million meals were reached.  For this campaign, Macy's focused on celebrity support, which included Jessica Simpson, Queen Latifah, and Tommy Hilfiger.  Another way Macy's got their message out was by hosting the "World's Largest Dinner Party," event at all of its 650 U.S. stores on Sept. 15. 

Macy's often links it's cause-marketing with store savings, such as wearing red while shopping or donate $2 to the AHA's Go Red forWomen campaign to save 20 percent. 

According to Martine Reardon, the executive VP-Marketing, campaigns are most successful when nonprofit partners work with stores to inspire employees to talk up programs to customers.  The "Book a Brighter Future" campaign, a partnership launched with Reading is Fundamental in 2006, offered consumers $10 off a $50 purchase for a $3 donation.  This generated $1.2 million in donations in 2006, $2.5 million in 2007, $3.1 million in 2008 and $6.5 million in 2009, due in large part to increased grassroots support by RIF chapters. 

Results:

In the quarterly report ending Jan. 30, Macy's posted a "better-than-expected" profit for the fourth quarter that was a vast improvement from the huge loss it reported a year earlier.  Macy's reported a $466 million profit compared to the same period last year, when it lost $4.77 billion.

Although Macy's chief executive Terry Lundgren attributes the results to the company's success to the company's new local merchandising initiative, My Macy's; a 26.6% increase in online sales; and a rebound at its luxury Bloomingdale's chain, the cause-marketing campaign holds Macy's to a high competitor and someone that the consumer will support. 

"One of our major values is to give back," Peter Sachse, Macy's chief marketing officer said. "I believe strongly that when we can connect both emotionally as well as intellectually on value and price with the customer, we will always win."

Published by: The Fundraising Journal 2010

Sources:
http://articles.latimes.com/2010/feb/23/business/la-fi-macys-earns24-2010feb24
http://www.adweek.com/aw/content_display/news/agency/e3i60409bb5508f95749011f549e8a3ddf4
http://adage.com/goodworks/post?article_id=139076
http://www.causemarketingforum.com/award_archives.asp


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