The first retrofitted store, a Lazarus in Easton, Ohio near Columbus, "clearly outperformed the large majority of Federated stores," Lundgren said. "Customer feedback has been very favorable. We are strong believers in the program. We rolled out 44 units in the fourth quarter and we’re ready to keep going. I am looking at markets and am going to make sure the next step involves very specific markets, like Rich’s and Macy’s in Atlanta," two nameplates currently being merged.
By covering an entire market, he noted, it becomes economically feasible to advertise "store of the future" features. They have 12 new technologies, shops and amenities, such as fitting room complexes with a lobby, a seating area for significant others, CNN monitors and computer terminal jacks to get online. Stores are also equipped with price lookup, so customers and sales associates can scan a bar code and get the latest price on items; larger signs that are reminiscent of discounters, and new shop concepts. Children’s shoes have returned to the Federated stores, and juniors shops are enlivened with video games, snacks, a photo booth, and a cyber cafe. With these strategies, Federated is seeking to attract younger customers, where department stores have lost major market share.
Lundgren said that, beyond Atlanta, Federated has not committed the program to any other metro area yet. Also, Bloomingdale’s is not part of the program. "We want Bloomingdale’s to have a totally different experience. The mission for Bloomingdale’s is to be a step up beyond the Macy’s focus and core target audience. Bloomingdale’s is continuing to trade up its business, to be more aspirational and creative, and recently, Bloomingdale’s has opened some exciting stores," Lundgren added, citing the Bloomingdale’s Home unit in downtown Chicago. It’s housed in the restored and landmarked Medina Temple.
With Macy’s, too, "There is an opportunity to trade up a bit. But we want to make sure we offer great value for our customers while not chasing much more moderate customers," such as those served by Kohl’s or Wal-Mart. "We’re going after the fashion-oriented consumer, interested in unique, quality product at good value."