AI-First Retail: How Macy’s is Transforming the Customer Experience
Macy’s is implementing an “AI-first” operating philosophy to redesign how retail decisions are made, according to Murali Murugan, senior director of engineering. Instead of layering AI onto existing workflows, the company embeds intelligence into personalization, search, and supply chain systems to reduce the gap between consumer signals and business action.
How does an “AI-first” retail strategy differ from traditional AI pilots?
An AI-first approach redesigns the core decision-making process rather than adding intelligence on top of legacy systems. Murali Murugan describes this as a shift from isolated AI pilots toward integrated systems. This integration allows retailers to move faster by making every customer experience relevant by default.
Traditional retail AI often focuses on narrow, standalone tools. In contrast, the integrated model embeds intelligence directly into software development and operational planning. According to Murugan, the goal is to compress the time between receiving a data signal and taking a business action.
What is the future of conversational commerce in retail?
Conversational commerce is shifting from basic search bars to AI-powered personal stylists. Macy’s uses a tool called “Ask Macy’s” to facilitate this transition. Instead of typing keywords, customers describe their needs conversationally—such as outfits for a prom or a vacation.
These systems curate recommendations based on three specific data points: past purchases, user preferences, and current context. This removes friction from the shopping process by mimicking a human stylist’s ability to provide tailored advice.
How is AI transforming backend retail operations?
AI functions as an invisible layer that augments human judgment rather than replacing it. According to Macy’s engineering leadership, this transformation occurs across four primary backend areas:
- Search Optimization: Determining how products surface based on real-time behavior.
- Supply Chain: Automating how inventory moves to meet demand.
- Code Deployment: Enabling engineers to ship software updates faster.
- Behavioral Response: Adjusting retail strategies in real time based on customer actions.
This operational shift relies on continuous improvement. Murugan states that the ability to learn from mistakes and adapt to new technology standards compounds into a better customer experience over time.
Comparison: AI Layering vs. AI-First Integration
| Feature | AI Layering (Traditional) | AI-First (Integrated) |
|---|---|---|
| Implementation | Added to existing workflows | Redesigns the workflow |
| Focus | Isolated pilots/tools | Operating philosophy |
| Outcome | Incremental efficiency | Compressed signal-to-action gap |
Frequently Asked Questions
What does “AI-first” mean for a retail business?
It means redesigning business decisions so intelligence is embedded in the system by default, rather than adding AI tools to existing processes.
How does “Ask Macy’s” improve the shopping experience?
It acts as a personal stylist, allowing customers to use conversational language to find curated products based on their history and specific event needs.
Will AI replace human retail employees?
According to Macy’s, AI is viewed as an invisible layer intended to augment human judgment, not replace it.
For more insights on the intersection of technology and commerce, explore our latest retail tech trends analysis or visit MIT Technology Review for deeper technical research.