Macy's Embraces AI-First Retail Strategy

Macy's is repositioning its retail operations for the artificial intelligence era by adopting an "AI-first" operating philosophy, as described by Murali Murugan, senior director of engineering. This approach moves beyond simply adding AI tools to existing systems and instead focuses on redesigning core decision-making processes to increase business velocity and ensure experiences are inherently more relevant. The company is embedding intelligence directly into critical areas such as personalization, search functionalities, operational planning, and software development.

This strategic shift reflects a broader trend in the retail industry, moving away from isolated AI experiments towards integrated systems designed to minimize the time between identifying a customer need or market signal and taking decisive action. Initial AI initiatives at Macy's concentrated on specific, high-impact applications like improving search recommendations and customer engagement. These early successes, which demonstrated measurable improvements in conversion rates and reduced customer friction, generated internal momentum for broader AI adoption.

Murugan noted that once these "quick wins" were established, scaling AI became a business decision rather than a technological challenge. This momentum is now being leveraged to enhance conversational commerce, exemplified by tools like Ask Macy's. This AI-powered shopping assistant is designed to function more like a personal stylist, allowing customers to describe their needs conversationally for events like proms or vacations and receive curated recommendations. These recommendations are informed by a customer's purchase history and stated preferences, aiming to provide a more personalized and efficient shopping journey.