Macy's: AI Redefines Retail

The Discreet Yet Powerful Impact of AI in Retail

Artificial intelligence is redefining the retail sector, but perhaps not in the most visible way for consumers. Rather than focusing solely on spectacular innovations like virtual try-ons or chatbots, AI is fundamentally transforming internal processes. It influences how products are ranked in search results, inventory management in supply chains, and even the speed at which code is developed. A crucial aspect is retailers' ability to respond to customer behavior in real-time, which is becoming essential in an increasingly fragmented and competitive market.

An "AI-first" Strategy at Macy’s

At Macy’s, this philosophy is embodied by an "AI-first" approach, as explained by Murali Murugan, senior engineering director. According to him, it's not just about adding a layer of artificial intelligence to existing processes, but about completely redefining decision-making to accelerate operations and make every interaction more relevant. Macy’s integrates AI directly into key systems such as personalization, search, operational planning, and even software development.

From Experimentation to Integration

Macy’s strategy reflects a broader trend in retail, moving from isolated pilot projects to integrated systems. The goal is to close the gap between signal and action, as Murugan emphasizes. Initial efforts focused on specific, high-impact use cases, such as search recommendations and customer engagement, which quickly demonstrated measurable gains in conversion and friction reduction. Murugan notes, “Once we established quick wins, scaling became a business decision, not a technological debate.”

Conversational Commerce with Ask Macy’s

This dynamic is now extending to conversational commerce through tools like Ask Macy’s, an AI-powered shopping assistant. This tool acts more like a personal stylist than a simple search bar. Customers can express their needs conversationally, whether preparing for a prom, a vacation, or a last-minute event, and receive personalized recommendations based on their past purchases, preferences, and context.

AI as a Complement to Human Judgment

For Macy’s, AI is not meant to replace human judgment but to enhance it. The company’s long-term vision is to create an increasingly seamless, adaptive, and personalized retail experience, supported by systems that customers may never notice. The true transformation, according to Murugan, lies in continuous improvement, learning from mistakes, and quickly adapting to new technological standards. These elements combine to deliver a significantly enhanced customer experience.