• The Wall Street Journal, Monday, April 21, 2008 10:14 AM

Macy's CEO Terry Lundgren is ditching a nationwide cookie-cutter approach instituted about a year and a half ago in favor of tailoring merchandise at the world's largest department-store chain by sales to local tastes. The localization strategy--called "My Macy's"--is a dramatic reversal for the retailer and Lundgren, who set out to end the slide of department-stores by creating a huge national chain that had more clout with vendors and stronger marketing, with fewer expensive local TV and print ads and more national ones.

"What the consumer wants in the Galleria of St. Louis is different from what the consumer wants on State Street, Chicago, or what the consumer wants in Portland, Oregon," Lundgren now says. He wants 15% of the merchandise in stores to reflect local preferences.

In going local, Macy's is adopting an approach that big chains like Best Buy and Ross Stores have come to view as imperative today. Retail giants like Wal-Mart Stores and Gap once prospered by opening identical stores around the country, but with almost everything now available on the Internet, retailers need to give shoppers a reason to make the trip.

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