Macy’s: Driving Seamless Omnichannel Experiences

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BRAND STORY Macy’s recognized the need to transform and unveil its Polaris strategy to reset business and profitability and drive seamless omnichannel experiences for its customers.

The story began in 1858. Rowland H. Macy opened R.H. Macy & Co. as a dry goods store in New York City. The first-day sales totaled $11.06, and fast forward to 2021, Macy’s global net sales amounted to approximately $24.5 billion. The art of staying relevant in the face of changing shopping behaviors requires solid but regular intervention to provide a better customer experience (CX).

Macy’s celebrates its iconic Thanksgiving Day Parade every year. On its 95th march last year, the brand launched a limited collection of 10,000 free Macy’s Fireworks NFTs built atop the Polygon blockchain. The Polygon blockchain was chosen by Macy’s for its intent and commitment to creating environmentally responsible solutions within the Web3/NFT ecosystem.

With the pandemic, the retail sector expanded at a previously unheard-of rate. As a result, Macy’s recognized the need to transform and unveil its Polaris strategy to reset business and profitability and drive seamless omnichannel experiences for its customers. Announced in 2020, the retailer aimed to stabilize profitability by “focussing resources on the healthy parts of the business, directly addressing the unhealthy parts, and exploring new revenue streams.” Adrian Mitchell, Chief Financial Officer at Macy’s Inc., said, “As part of our strategy, we knew that to transform at the pace needed, we had to embed technology, data, and analytics into our operations. We invested strategically in technology-based initiatives, data science, and simplifying our technology architecture.”

Machine learning and AI to navigate headwinds

In the first three months of 2022, the supply chain saw disruptions. As a result, the company went with machine learning and automation to improve inventory allocation, forecasting, replenishment, and lead time management. 

The company forecasted lead time disruptions using data and analytics and then adjusted the means of transportation accordingly. In this manner, goods meet customer demand by entering the appropriate markets at the right time and place. Effective inventory management is still a strategic objective. The team is actively attempting to better match inventory measurements to real sales trends by accelerating inventory sell-through and modifying purchases to consider the shifting market conditions.

The company is experimenting with sophisticated and AI-driven targeting to determine the best communication method, frequency, message, and offer for customers. Macy’s hopes it can boost engagement through improved personalization capabilities, which will lead to good brand perception and more visits and sales. The company recently reported its first quarter 2022 results and found that approximately 44.4 million active customers shopped the Macy’s brand on a trailing twelve-month basis, which was a 14% increase compared to the prior year.

Data to dive deeper

This global department store’s physical and online platforms can examine vast volumes of data daily by leveraging analytics tools built into its databases. Regular retail purchases and information obtained through social media sites, particularly Twitter, are included in the analyzed data. Last year, Macy’s hired Xingchu Liu, with prior knowledge of AI-led strategies, as the senior vice president of enterprise data and analytics. He was bestowed to build and lead the company’s enterprise data and analytics team, which is responsible for focusing on analytics governance, data management, and activation.

The company collects and analyzes a great amount of customer information, ranging from visit patterns and sales to fashion preferences and online and offline personal motivations. They use this information to customize the consumer experience, including the offers customers receive at the register.

Going in the clouds

In addition to shifting its infrastructure to the cloud, Macy’s is improving retail operational processes throughout its network by leveraging Google Cloud data warehousing and analytics capabilities. To ensure that merchandise is accurately and quickly received, sorted, packed, ticketed, picked, and shipped from the company’s distribution center to the stores, even during busy retail seasons like back-to-school and the holidays, Macy’s utilizes the scalability of Google Cloud.

Moving ahead with a digital strategy

The pandemic has changed the scenario, and brands need to have a strong digital presence and better their services to survive. Launching a redesigned version of its mobile app in October 2021, which now has, among other things, personalized homepages, improved design and navigation, and an improved search function, was one of the things Macy’s bid to grow its digital sales. Better product filtering, personalized suggestions, access to lists and favorites, and a new frictionless return process in-store are all included in the new app.

Customers can virtually see their preferred furniture and home furnishings in a custom-built room made to exactly match their living space, thanks to Macy’s extension of its 3D Room design service. Any customer can start the in-store 3D design service room by working with a professionally trained furniture sales associate in-store or from home via virtual consultation.

Summing up with a cautious note

On a different pitch, Macy’s Inc. is currently in the middle of a case for allegedly using Clearview AI’s biometric database to identify customers whose images appeared in store surveillance footage. According to the complaint, the retail giant bought Clearview’s database and subsequently utilized it more than 6,000 times to look for biometric matches. However, the company is yet to make any statements citing the pending nature of litigation. Despite all the odds, Macy’s came out strongly after the setbacks retailers worldwide faced due to the pandemic.