Macy's Bet on AI to Make Retail More Human

Macy’s challenged the premise that technology and human connection are in tension. The real question isn’t whether to automate, but how to scale the parts of retail that actually build loyalty.

The question nobody is asking about AI in retail is the right one.

Everyone wants to know how much AI will replace. Macy’s is more interested in how much it can amplify, and that framing produces a completely different set of investments, priorities, and outcomes. Rather than using AI to remove store associates or automate decisions, their strategy is to enhance knowledge, confidence, and connection across both digital and physical environments. The human layer stays. It just gets better tools.

From search to guided discovery.

Traditional search returns results. Macy’s AI-powered assistant, “Ask Macy’s,” does something different: it guides discovery. Customers aren’t just shown what they asked for. They’re supported in figuring out what they actually need, whether that’s styling advice, occasion-based recommendations, or a complete outfit built around a specific moment.

This mirrors the role of a great in-store associate. A customer rarely walks in with perfect clarity. They have a vague idea, an upcoming event, a feeling they can’t quite articulate. The associate’s job is to help shape that into a decision. Extending that experience digitally is a service philosophy that happens to use technology.

Gen Z is returning to stores, but not to shop.

Younger consumers are coming back to physical retail for experiences, social interaction, and moments worth sharing. The purchase is almost secondary.

Macy’s is building accordingly. Stores are being designed as environments rather than assortments, with styling appointments, events, and experiential activations tied to key moments like prom and seasonal occasions. The question isn’t whether stores still matter. It’s what makes people choose to walk into one.

Omnichannel has become a baseline expectation.

Customers aren’t thinking in channels. Some start online and finish in store. Others do the reverse. From their perspective, it’s all one experience, and any gap between touchpoints feels like a failure.

Macy’s approach reflects this. The focus is on creating coherence: consistent look, feel, and service standard whether a customer is browsing online or walking through a store door. Brands that still optimize channels independently are creating friction at the seams. Consumers notice.

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From our sponsor: Fospha

Every session at Shoptalk touched on some version of the same problem: customers are discovering products on TikTok, researching on Reddit, browsing on ChatGPT, comparing on Amazon, and converting in store. The journey is more fragmented than it has ever been, and the measurement tools most brands rely on were built for a simpler world.

Last-click attribution, still the default reporting model for many teams, systematically undervalues the channels that create demand in the first place. When a customer sees a brand on a YouTube creator’s video, discusses it in a Reddit thread, and then searches on Google two weeks later, last-click gives all the credit to that final search. The upper-funnel activity that actually built the intent gets zero recognition. Fospha’s data shows this undervaluation averages over 90% for awareness and consideration channels.

The result is a structural bias that quietly starves the channels responsible for growth. Brands end up over-investing in demand capture at the bottom of the funnel while under-investing in the demand creation that feeds it. The numbers tell the story: brands using Fospha’s full-funnel measurement achieve 30% higher ROAS than the market average. When Amazon halo effects are included, showing how paid social and video drive marketplace sales that siloed tools miss entirely, brands see an average 37% ROAS uplift.

Fospha’s always-on Media Mix Model measures full-funnel impact across every channel, from DTC to Amazon to TikTok Shop and beyond, updated daily at the ad level. In a world where the customer journey looks like the one Shoptalk just spent three days describing, that kind of unified view is the difference between scaling with confidence and scaling on assumption.

Learn more at fospha.com

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Personalization is becoming memory.

Historically, personalization meant suggesting products based on past behavior. Macy’s is moving toward something more continuous: building a deeper understanding of the customer so that interactions feel cumulative rather than repetitive. Customers shouldn’t have to repeat themselves. The brand should recognize preferences, anticipate needs, and adapt accordingly, whether the interaction happens online, in store, or through an AI interface. That’s what a relationship looks like, and it’s where personalization is headed.

The strongest differentiator is still human.

Despite everything, Macy’s most emphatic point was this: store associates remain the critical link between brand and customer, and no technology replaces the emotional component of that exchange. AI reduces operational friction, surfaces information faster, and makes associates more confident and better prepared. But it can’t replicate the moment when someone helps you prepare for something that matters and makes you feel genuinely understood. The technology exists to protect that experience, not to replace the people who create it.

Loyalty built on experience, not points.

What emerges from Macy’s strategy is a broader truth about how loyalty is earned now. Price, convenience, and product availability still matter, but they’re no longer the primary drivers. What shapes loyalty is how customers feel throughout the journey, from discovery through purchase and beyond.

Customers who engage across multiple channels are already proving more valuable, spending more time and building stronger relationships with the brand. The opportunity is turning those interactions into something cohesive and intentional rather than coincidental. Experience is the compound interest of retail. It builds slowly, then all at once.