During a breakout session at this week’s Big Show, hosted by the National Retail Federation, Macy’s svp of customer journey, Bennett Fox-Glassman, described how the department store is revamping the customer experience through hyper-personalized and connected journeys. Under Fox-Glassman’s leadership, Macy’s is dedicating more resources to better understanding consumer behavior, in order to then increase brand loyalty and ultimately drive sales.
“Personalization has long been a priority for Macy’s,” Fox-Glassman told Glossy. “Historically, we have personalized product recommendations; our e-mail, SMS and push programs; various aspects of our on-site and app experiences; as well as paid media [dedicated to personalization]. Each of these has driven greater relevance for our customers. And we have seen greater engagement from customers exposed to a more personalized experience.”
Back in August 2022, during Macy’s second-quarter earnings call, chairman and CEO Jeff Gennette said, “We are continuing to ramp up our digital capabilities, including personalization, that increase engagement with our customers and optimize our omnichannel experience.” He added that, at the time, active app customers had grown about 17% year-over-year, while “Star Rewards active members totaled 29.5 million and accounted for 70% of total owned-plus-licensed [brand customers],” representing a 5% increase year-over-year.
Macy’s beat analysts’ predictions for the third quarter of 2023, ending in October, reporting overall sales of $5 billion, a decrease of 7% year-over-year. The results showed that approximately 41.3 million active customers shopped the Macy’s brand, and Star Rewards program members made up approximately 72% of owned-plus-licensed sales. But on Thursday, Retail Dive reported that Macy’s plans to reduce its workforce by 3.5% and close five Macy’s full-line stores. Tony Spring will take over Gennette’s CEO position early this year.
According to Fox-Glassman, in 2024, Macy’s will be zeroing in on specific methods of personalization. “It’s important to focus on applications that matter to the customer,” said Fox-Glassman.
“Macy’s has started by focusing on five use cases [for personalization], which include prompting customers to ‘complete the look’ [with complementary purchases], helping customers discover the next category to try, and [ensuring they] know about the omnichannel benefits we have to offer,” Fox-Glassman said. Other use cases Macy’s is prioritizing include driving first-to-second purchases, encouraging online shoppers to shop in-store and in-store shoppers to shop online, increasing Macy’s credit card usage, and re-engaging churning high-spend customers.
Glossy spoke with Fox-Glassman after his session at NRF to discuss what’s in store for Macy’s personalization efforts and what challenges the company anticipates as it perfects these innovations.
What does the future of Macy’s personalization look like?
“While our efforts in the past have been more tactic-specific, our future focus is on bringing it all together for the customer. Our customers want to have a relationship and a conversation with us, and just like a conversation, it’s important to be able to pick up where you left off. Our aspiration is that, whether you receive an e-mail, walk into a store, open the app or see a Macy’s ad, we are speaking to you with one voice. The investments we’re prioritizing are making this aspiration a reality.
In 2024, we plan to continue investing to bring personalized experiences together. We believe connecting the channels creates a great experience and our early results have shown this leads to greater customer engagement. The customer guides our investments, so in 2024, you will see more personalization within our popular sales and events, and more personalization within all the different channels where our customer hears from us.”
How is Macy’s approach to personalization different from competitors?
“Macy’s has a strong advantage in being omnichannel and multi-category. We know our customers’ sense of style and can help them get inspired and shop for the best products in apparel, accessories, beauty and home. The Macy’s Star Rewards loyalty program is also industry-leading, with over 70% penetration. Loyalty combined with personalization is allowing us to deliver more relevant products, offers and inspiration within and across these categories.”
Where do you anticipate Macy’s will face the most challenges when growing and scaling personalization?
“With so much rich data and the rapid advances in AI, we are excited about delivering higher quality personalization to our customers. We are also extremely mindful of staying true to the beloved Macy’s brand. Everyone is learning the use of these tools together and we are working to balance the amazing potential of new tools and technologies with creating a brand-right experience, all while staying in a leading position competitively.”