• by Sarah Mahoney , Staff Writer @mahoney_sarah, July 3, 2024

While Macy’s has spent the last few months diving into a new corporate transformation effort, the retailer’s digital overhaul has been ongoing for several years. This includes a massive redo of Macy’s Star Rewards, the loyalty program, and its approach to personalization. Since 2022, working with Deloitte Digital, Macy’s has delivered half a billion offers to shoppers, increasing engagement and frequency.

Bennett Fox-Glassman, senior vice president, customer journey, at Macy’s, and Trinadha Kandi, managing director and advertising, marketing and commerce leader at Deloitte Digital, tell Retail Insider how these personalization efforts are changing the store’s relationship with its most important customers.

The interview has been edited for length and clarity.

Retail Insider: Can you explain what personalization means right now? Many people still misunderstand it.

Trinadha Kandi: Personalization is a value exchange between brands and customers. From a consumer standpoint, it means getting the right message on the right channel at the right moment. For brands, it's about delivering that experience at every touchpoint.

Deloitte’s latest research shows it’s crucial -- nearly three in four consumers are more likely to purchase from brands that deliver personalized experiences, and those consumers that do spend 37% more with those brands. About 50% of brands now consider personalization a cornerstone of their customer strategy. The leaders in personalization surpassed revenue goals by 10% last year.

Retail Insider: OK, 37% more is a lot. Are consumers just grateful for tailored offers? Do these offers unearth products they didn’t know about? Or is there more to it?

Kandi: It’s a combination of factors. Consumers are more conscious of the value of every dollar. Personalized offers and communications make consumers more loyal and more likely to spend.

Retail Insider: Bennett, what does this mean for Macy’s?

Bennett Fox-Glassman: My role is to help Macy’s become increasingly customer-focused, resulting in better experiences, engagement, retention, and profitable growth. Customers rarely ask for personalization explicitly; they ask for relevance and conversational communication.

We know our customers well and have a strong loyalty program. The challenge is to use this knowledge throughout the customer journey. For instance, we may inspire a customer with something in the same style or price point as their last purchase. As customers move further in their journey, we offer more personalized value. We also tailor communication based on customer preferences -- whether it's email, the website, paid media, or our app -- to ensure consistency. Our new technology aids in this process.

Retail Insider: Macy’s is undergoing major transformation, including closing many underperforming stores and focusing on the “First 50,” the 50 locations that are leading the way. Is there a digital analogy to these brick-and-mortar changes?

Fox-Glassman: Yes, it's all the same and part of our "bold new chapter" strategy. We’re an omnichannel company, so our store and digital teams constantly collaborate. Our focus is on outstanding products, great experiences, and good value, whether in-store or online.

This strategy involves investing in staffing, service levels, and store aesthetics. On the digital side, that means ironing out digital friction points and enhancing the digital channel’s individualized feel. We’re also working on value clarity to ensure our offerings are clear and easy to understand.

Retail Insider: Despite new technology, personalization still has a way to go. Are there any goals you're still striving to achieve?

Kandi: Yes, brands are moving closer to achieving omnichannel personalization at scale. With AI-driven personalization, many brands, including Macy's, are leveraging advanced analytics, data science, and machine learning models to communicate more precisely with consumers. The integration of generative AI, more data, and advanced technology brings us closer to this goal.

Retail Insider: Where will Macy’s be in six months?

Fox-Glassman: Personalization is a journey, and we've made significant investments in foundational elements over the past three years. We’ve centralized our data and coordinated our messaging systems, allowing us to build momentum in the next six to twelve months. Our focus is on deepening customer relationships, improving retention and engagement, and driving more sales through our own channels. Ultimately, we aim for higher retention and lifetime value.

Kandi: I agree -- personalization is an ongoing journey. Over the next 12 to 18 months, Macy’s will leverage generative AI, AI, and automation to improve operational efficiency and enhance customer experience and engagement.