Tuesday, March 9, 2010
It's A Wrap for MACY's
By Sandra M. Jones,
The legacy of the department store as an oasis of customer service fell another notch this week when Macy's Inc. disclosed it is shutting down its gift-wrap department.
The retailer, like most these days, has been under pressure to cut costs. Staffing stores with clerks to cut paper and fold ribbons doesn't come cheap.
Department store services have been fading away for years. So it's no surprise that one more vestige of the traditional department store is going the way of coat checks, tea rooms and hair salons.Still, there is something ironic in eliminating gift-wrapping in a culture where shoppers, even those on a budget, are short of time and looking for convenience.
"It's penny-wise, but pound-foolish," said Pamela Danziger, president of Unity Marketing, a luxury market research firm. "It doesn't make sense. In our research, people are willing to pay extra to get a good presentation. By the time you buy the ribbons and bags yourself, it's $5 to $10, and you still have to do the work to wrap it." Macy's gift-wrap prices range from $5.95 for a small box to $15.95 for an extra-large box, said Macy's spokesman Jim Sluzewski. Bridal registry gifts are $7.95 for all sizes.
Macy's isn't alone, JC Penney Co. used to offer gift-wrap around the holidays but doesn't anymore. It stopped offering the perk six or seven years ago as a cost-saving move, said Ann Marie Bishop, spokeswoman for the midtier department store chain. Lord & Taylor also no longer offers gift-wrap. On the other hand, Bon-Ton Stores Inc., a rival midtier department store chain that includes Carson Pirie Scott, has kept its gift-wrap operation intact, said spokeswoman Mary Kerr.
As far back as the 1960s, retail pundits started to worry that department store cost structures wouldn't be able to support all the perks that made them so enticing, from no-questions-asked return policies to valet parking. And indeed, by the 1980s, discount chains, including Target, Wal-Mart and Kohl's, began to take over the retail landscape, betting that shoppers would tolerate bare-bones service in order to get a good price.One way to get around the expense of hiring gift-wrappers is to create a box and ribbon that sales clerks can package at the counter.
Nordstrom Inc., for example, stocks shiny, silver gift boxes and instructs clerks to wrap purchases carefully in tissue paper and walk around the front of the counter to present the finished package to shoppers. The gift box is free.
Even Neiman Marcus keeps it simple, with a silver box adorned with a bow and a special trinket, such as a key chain or small picture frame. The standard charge is $7.50, and for big spenders it's free.
Family-run Von Maur stands out as an exception. The Midwestern department store chain has been offering free gift-wrap since 1988 and has a separate gift-wrapping counter tucked away in a corner of the store, with eight separate choices of paper.
Macy's has been considering cutting out its gift-wrap operation for three years, said Sluzewski. The retailer tested the move in a few places before instituting the change at its more than 800 stores nationwide with a few exceptions, including Macy's flagship Chicago store, he said.
Macy's online wedding-registry service will also start offering engaged couples the option of asking their guests to send unwrapped gifts, Sluzewski said.
"There has been concern about the cost structure of department stores for many years, particularly the labor costs," said Homer Johnson, professor of management at Loyola University Chicago's school of business administration. "But they are between a rock and a hard place because their attraction was that they offered service, whereas the discounters didn't. So if they cut service, they cut out the very characteristic that made them attractive."