Macy’s, Inc. (M): The “Magic” Is Still Driving Results

Macy’s, Inc. (NYSE:M) and The Walt Disney Company (NYSE:DIS) both have something magic going on. And it’s all about customer service. It’s why these two companies succeed where others struggle, and why both should be on your wish list.

Magic Selling

Macy’s, Inc. (NYSE:M) operates over 800 Macy’s and Bloomingdale’s stores across 45 states. These two nameplates are legendary in the brick and mortar world. As customers have shifted more and more toward the Internet, however, Macy’s, Inc. (NYSE:M) has found a way to thrive.

For starters, the company has embraced online and started to think of the selling process across channels rather than in store only. Secondly, it works to tailor its stores to the regions they serve. And, perhaps most important, the company initiated its Magic Selling program.

Magic Selling is intended to improve customer engagement. Sales associates are trained to make customer connections, ask questions and listen, give options and advice, and inspire customers to buy. At the end of the day, the goal is to “celebrate the purchase.” That’s pretty compelling, but sounds a little ethereal.

Impressive Results

After bottoming out in 2010, Macy’s, Inc. (NYSE:M) top and bottom lines have grown steadily. Same store sales have been growing reliably, with the first quarter marking the 13th consecutive quarter of 3% or better growth. That’s an impressive string for a retailer operating in a historically slow economic recovery following the deep 2007 to 2009 recession.

With such strong financial results, it shouldn’t be surprising that the stock is near its highs reached prior to the recession. Momentum and growth investors should be interested. Although the results of the company’s initiatives are impressive, the real magic is customer service. Macy’s realizes that it needs to treat its customers better than the competition by “celebrating” them.

Magic of a Different Sort

Another company that understands magic is The Walt Disney Company (NYSE:DIS). The best place to see this is at the company’s theme parks, though customer service pervades the entire organization. In the parks, all employees are cast members and have to play their role until they are in non-customer areas. Part of the role is to be pleasant and nice to everyone. On a more mundane level, the parks are kept immaculately clean.

Service doesn’t start and end in the park, however. The Walt Disney Company (NYSE:DIS) provides free bus service to and from the Orlando airport to its hotels. It also has agreements with airlines to take hotel customers’ luggage from the airplane and deliver it directly to their rooms. All of this makes a trip to Disney easier and helps to justify the premium price tag.

Of course The Walt Disney Company (NYSE:DIS) is more than just parks, it also makes movies, owns ABC, ESPN, and the Disney Channel, runs a cruise line, and has a chain of retail stores. But it works hard to spread the magic of impressive customer relationships across all of its businesses. The parks are just among the most obvious examples.