Technology Plays an Ever-Greater Role
Technology is playing a larger and increasingly crucial role at Macy’s, Inc.
as we increase convenience for customers, speed transactions, improve
merchandising and operate more efficiently.

Our direct-to-consumer businesses, including macys.com and
bloomingdales.com, continue to be the fastest-growing part of the
company, with sales expected to top $1 billion in 2008. Our Internet sites
are more complete, content-rich and faster than ever before. As a result,
we are benefiting from the interaction of our stores and online offerings,
which provide customers a seamless shopping experience.

These businesses are supported by two new 600,000-square-foot
distribution centers in Portland, TN, and Goodyear, AZ, that are part
of a $300 million investment in direct-to-consumer technology and
operations in the 2006-2008 period. With these new facilities in place,
the company’s selling sites can ship 98 percent of its online and mail
orders (up to 70,000 a day) within 24 hours. The nationwide distribution
center network, supporting Macy’s and Bloomingdale’s stores, also has
been upgraded and reconfigured to reduce the time and costs required
to bring fresh goods to the sales floor.

In the stores, Macy’s in 2007 began rolling out a network of 50,000 new
registers and point-of-sale systems that will be fully in place by the end
of 2010. New “smart registers” are allowing sales associates to handle
complex tasks more simply, while the supporting software will enable
true multi-channel retailing in the years ahead.

Tailoring merchandise by store, part of the My Macy’s localization strategy
in every Macy’s division, is being enabled by a series of new systems and
technology being rolled out after two years of development and testing.
In part, these systems will allow merchants to more accurately assort each
Macy’s store with items, brands, garment sizes and colors preferred by
customers who shop that specific location.

“We are running
our business
more intelligently,
more efficiently
and in ways that
are better for our
environment.”

 A Commitment to Sustainability
At Macy’s, Inc., we believe that contributing to a more sustainable environment is good business practice and the right
thing to do for future generations. As a leading national retailer with a significant workforce, we have the opportunity
to make a meaningful difference in improving the environment. And we will do so. But we must operate within the
bounds of good business decision-making so that the actions we take are measurable, sustainable and enduring.
Our strategies for sustainability include aggressively reducing wasteful behavior, decreasing our use of scarce
resources and pursuing environmentally friendly solutions whenever we have the option to do so. Moreover, we
are encouraging our customers, suppliers, employees and communities to join us in preserving the environment.
Results already are showing. Macy’s, Inc. has reduced its total energy consumption by about 9 percent over the
past five years. We have begun to host solar panels on more than 30 Macy’s stores, primarily in California. We increased
our use of recycled paper by about 10-fold in 2007 alone. And our customer-oriented fundraising programs in spring
2008 are benefiting organizations such as the National Park Foundation and the Natural Resources Defense Council.