MACY’S making climb to billion-dollar spend mark

If you are a diverse supplier and want to introduce a line of polo-style shirts to the formidable chain of retail outlets at Macy’s Inc., it shouldn’t be just another polo shirt. That means the incoming product must project “innovation, differentiation and uniqueness,” said Gail Nutt, Macy’s corporate director of supplier diversity for retail.
Those requirements aren’t intended to discourage well-intentioned prospective suppliers, but rather to strengthen Macy’s brand and its bond with customers who expect distinctive merchandise for their shopping dollars, Nutt said.

“One of the things we’re looking at is what’s different about this shirt versus all of the other polo-styled shirts that we carry because it’s not like we need another shirt for the customer to come in and select from. We have them across all price ranges and throughout all brands. The customer doesn’t want to come in and see rows and rows of the same thing. So we ask suppliers, what do you stand for that is new, different and unique? That’s very critical,” she said.

For minority- and women-owned retail vendors, Macy’s is all embracing, Nutt added. As a retailer, it has to be, Macy’s has a diverse marketplace.

“Driving sales and profit is what we are about. Supplier diversity reflects our commitment to economic reciprocity — giving back and helping to create wealth in the communities where we are honored to do business,” Nutt said.
Macy’s purchases with diverse suppliers have increased significantly in recent years, according to company supplier diversity spend statistics. In 2007, the company reported about $604 million in purchases with diverse suppliers compared with $344 million in 2002.

Macy’s has had a formal supplier diversity program for many years. Nutt said the company hopes to reach the $1 billion mark in MWBE spend by 2010 — an accomplishment enjoyed only by a handful of corporations. Reaching the $1 billion-spend level would qualify Macy’s for membership in the Billion Dollar Roundtable, a top-level forum composed of corporations who have reached that threshold, including AT&T, IBM, General Motors, Ford, Chrysler, Verizon and Wal-Mart, just to name a few.

“It is a significant signal to the vendor community when you can say that $1 billion of your spend goes to minority and women vendors across the country in all the communities where you do business,” Nutt said.
A white paper, “Supplier Diversity: A Business Imperative,” from the St. Louis Minority Business Council, an affiliate organization of the National Minority Supplier Development Council, noted that “a strong supplier diversity program may open up new contracting opportunities, add value to existing business relationships and enhance a com-pany’s reputation.” Additionally, the Women’s Business Enterprise National Council reported that 79 percent of respondents in a June 2007 survey said that knowing a company buys from women-owned businesses would compel them to try that company’s products and services if they were not already customers.

Macy’s offers diverse supplier vendor opportunities in both retail and non-retail areas. On the retail side, for which Nutt is directly responsible, Macy’s is seeking products in all the categories it sells — from women’s and men’s sportswear, men’s accessories and suits to cosmetics, textiles and housewares. The supplier diversity team assists in navigating prospective vendors to connect with Macy’s Merchandising Group in New York, which provides merchandise direction to the stores.
This is an expert team who “scours the marketplace for product categories that are right for Macy’s,” Nutt said.
In August 2007, Macy’s conducted its first-ever national supplier diversity fair in New York, targeting minority- and women-owned vendors in the cosmetics and skincare categories. Macy’s estimates that 30 percent of its customers are people of color, and the vendor fair provided an opportunity to enhance its existing product assortment for the multicultural customer.

The event resulted in Macy’s adding four new cosmetics vendors from diverse suppliers, and several other prospects are pending, Nutt said.

“Today’s marketplace has a significant multicultural customer component. Clearly, if you are able to have partners from your community that can provide you with unique, innovative products that speak to either a specific segment or the total group in a particular lifestyle, your ability to create loyalty and service to your customer is enhanced appreciably,” Nutt said.

On the non-retail side, Macy’s is seeking operational goods and services that support the corporation including, data processing services, housekeeping and janitorial, office supplies and printing, construction services, employment services and advertising/marketing.

Finding a niche in Macy’s supply chain won’t come solely on innovative ideas and products, Nutt emphasized. Vendors have to be able to deliver to and service a major brand like Macy’s. Products must meet manufacturing, safety and quality control standards to be considered, and vendors must have manufacturing and supply capability. Additionally, diverse suppliers must be certified as being 51 percent or more owned by a minority or woman through the NMSDC or WBENC, both of which provide certification for corporations and government.

Nutt said great ideas are a starting point, and Macy’s supplier diversity organization is charged with being ready at the call to assist certified diverse vendors with the business basics necessary to supply major corporations, including strengthening business plans and assortment enhancements.

“People develop great ideas and say, ‘This is my opportunity to reach out and get my piece of the American dream.’ We clearly understand that a new and upcoming vendor won’t understand all the angles of the business, but that’s one of the reasons we exist — to provide mentoring, insight and support,” Nutt said. “With Terry Lundgren, Macy’s CEO, chairman and president serving as board chair of NMSDC, our commitment to supplier diversity leadership is stronger than ever.”