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Bloomingdale's strives for upscale customers

The home store will be a major beneficiary of the evolving Bloomingdale's brand strategy, now well underway at the flagship here and across all branches.

The overall strategy, Mike Gould, chairman and CEO, explained, "is to differentiate Bloomingdale's as a specialized upscale department store. Home offers a unique opportunity" within this framework, he said.

Gould positions Bloomingdale's in the ranks of Neiman Marcus, Saks Fifth Avenue and Nordstrom's. "We're more upscale than a typical department store, and our challenge is how we service the upscale home customer."

"We have a full-fledged home store where the others have fine offerings in limited home goods like tabletop and accessories. We can offer customers everything from high-end quality mattresses to the best assortment of home textiles. Our textile team has the ability to differentiate us.

"Home has had a good turnaround. 2003 was good and January and February have been strong. Home is an integral part of our strategy and an enormous differentiator," he said.

The differentiation strategy revolves around merchandise, service and marketing. In terms of merchandise, "Our goal is to be upscale, working with limited distribution merchandise, designers and 'only @Bloomingdale's' exclusives in all merchandise areas," said Gould.

Two years ago, he pointed out, the limited distribution/ designers/exclusive combination represented 48 percent of the business. Last year, it was 61 percent, exceeding the goal of 55 percent, and in two years, he expects it to hit more than 75 percent of the store's merchandise offering.

That the program is working is seen in the results for January and February, Gould said. "Our average sale across the total store was up 13 percent. And the number of transactions also were up, resulting in strong double-digit gains." And home ran at the same pace as apparel, he added.

At the same time, Gould noted, store-wide, "We were able to sell through at full price more." Today, he added, there are 200,000 fewer ready-to-wear items on clearance sale pricing. "We have fewer promotions, emphasize new trends and our electronic gift card business is running at double-digit increases both in giving and redemption. The givers are endorsing the store."

For sale events, "We are enhancing and differentiating them," Gould said.

As important as the changes in merchandise direction, "The stores are different — less cluttered. We've reduced signing 75 percent. There's no duplicate signing for an item and no overheads. We also eliminated aisle merchandise," said Gould.

Overall, he emphasized, "We opened the store for customers. Aisles are wider and there's less merchandise on the floor." Because of the emphasis on newness, "We bring in new goods faster and have faster turns."

An important objective is customer service, something Gould has been dedicated to since arriving at Bloomingdale's in 1991. "We are committed to enhancing our shopping scores. My goal is to have service on the level of the Four Seasons Hotel chain. We can take the store to that level." It's not just customer service, but things like restrooms, dressing rooms, and other service elements that are important, he added.

People play a key role in service. "We're ratcheting our training and also our expectations for our people," he emphasized.

As for the stores themselves, Gould points out, "59th Street is important above all others. Wall Street, the media, resources, other retailers all look at 59th Street. And 35 percent of our business comes from tourists."

At the same time, Gould remarked, "We're a neighborhood store, we support local charities and many of our people are mentors at the local school."

While the 59th Street presence is enormous, "It is not at the expense of the other stores," he noted.

Marketing also is integral to Bloomingdale's strategy. And with the scaling back of promotions and the more upscale advertising, the store has launched NOW, a magazine highlighting fashion trends and designers. "We need to get home furnishings suppliers to understand we're selling the brand Bloomingdale's, as well as designers," said Gould.

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