By Karen E. Thuermer, AJOT The retail business, especially at the department store level, is complicated, especially since stores handle a large number of brands and products, many of which are imported by their vendors around the world. Macy’s Inc., one of the nation’s premier retailers that also owns Bloomingdale’s, has found success by analyzing customer behavior data collected in partnership with DunnHumby USA, a company that analyzes customers and helps businesses better understand loyalty programs. Macy’s is its exclusive department store client. As reported by Bloomberg Businessweek, “Rather, by crunching data from credit-card transactions and customer loyalty programs, the outfit reveals hidden and lucrative facts about clients’ current customers. It can identify who might jump at a particular sale, or who will ditch the store if a certain product goes away.” While Macy’s will not reveal any details regarding its relationship with DunnHumby, the consulting firm does relay to Businessweek unique business findings. For example, in working with a major European catalogue company, shoppers of different body types don’t simply prefer different clothing styles; they actually shop at different times of the year. Slimmer consumers, for example, buy early in a new season. Larger folks take fewer risks, waiting until later in the season to see what will be popular. In other words, DunnHumby can uncover regional quirks. Consequently, not only can Macy’s selection of clothing merchandise vary significantly from location to location, its buying trends can differ depending on each store’s clientele. Noting such trends can have a significant impact on the supply chain and importing needs. While such specific consumer information is most relevant to retailer buyers, it is also of interest to shippers that are concerned with volume flows of merchandise. Obviously, if a department store can determine when its sales of particular items will peak, logistics managers can be more proficient in working with their freight forwarders to book space on ocean carriers or, if need be, air carriers. How to move and stock inventory can also be determined. More Localized Business Consequently, Macy’s has undergone a big change to its business model – that being one of localization. In fact, after initial pilots in 20 markets in 2008, in 2009 the retailer rolled out what it calls the My Macy’s localization initiative. This involved grouping Macy’s stores nationwide into 69 geographic districts that average 10 to 12 stores each. The 69 Macy’s districts are grouped into eight regions. Those eight regions are: Northeast (11 districts with 108 stores), Mid Atlantic (eight districts with 97 stores), Southeast (10 districts with 112 stores), South Central (five districts with 65 stores), Midwest (nine districts with 105 stores), North (six districts with 62 stores), Northwest (11 districts with 137 stores), and Southwest (nine districts with 123 stores). For example, Macy’s Mid Atlantic region is broken into New Jersey North with nine stores; New Jersey Central with 11 stores; New Jersey South with eight stores; DelMarVA South with 14 stores, DelMarVA North with 16 stores, and Philadelphia with 11 stores. “We added human intelligence – including new district merchants and planners – in each district in a manner that enables us to tailor merchandise assortments and the shopping experience by location,” states its annual report. “My Macy’s is proving itself to be a powerful competitive differentiator and driver of sales. In 2009, all of the company’s top 12 markets in sales growth were from the initial My Macy’s pilot districts. As the national rollout progresses, we expect the remainder of the company to perform consistently with the initial pilot districts.” Macy’s Inc. operates about 810 Macy’s department stores and furniture galleries in 45 states, the District of Columbia, Guam and Puerto Rico, as well as macy’s.com. The Bloomingdale’s brand includes 40 stores in 12