Name: Macy's Inc.
Revenue: $27.9 billion (2013)
We’ve all been there. While shopping for new clothes, you enter a fitting room to try on a stack of possibilities—except some of the items, it seems, aren’t the right color or size. You crack the door and crane your neck past the threshold. Where did the attendant go? And how on earth are you going to describe exactly which pair of jeans you really need?
Bloomingdale’s, the upscale department store owned by Macy’s Inc., thinks technology can help solve a common problem that has cost apparel retailers dearly in sales: frustrated customers who give up and leave rather than take the time to acquire the right piece of clothing.
The solution? “Smart” fitting rooms equipped with wall-mounted tablet computers. At five of its 37 stores, Bloomingdale’s has installed Apple iPads that connect to the complex inventory-management systems it uses to keep track of tens of millions of items. With the iPads, a customer or a store associate can scan the item in question to find which colors and sizes are in stock, as well as see ratings and reviews by other customers. The tablets also recommend items that would complement the scanned original. And with a tap, a customer can summon an associate. (No neck craning necessary.)
“The problem we are trying to solve at Bloomingdale’s is age-old,” says R.B. Harrison, chief omnichannel officer at Macy’s Inc. “You’ve got a customer sitting half-naked in the fitting room and wanting to try a different size. This is technology for a common problem customers have.”
The technology isn’t particularly advanced—customers still have to try items on—but the initiative is part of a bigger push by Macy’s Inc. to best its competition at integrating analog and digital shopping experiences. It’s paying off: Macy’s is way ahead of Kohl’s and J.C. Penney in terms of using unsold inventory from physical stores to fill online orders (rather than sell it on clearance), as well as offering store pickup for orders placed online.
If its tablet test proves effective, Bloomingdale’s may roll out the system nationwide. Macy’s Inc., like its peers, hopes that its embrace of technology will help stem losses of customers to e-commerce behemoths like eBay and Amazon. The existential threat is why it created an internal tech incubator called Idea Lab in San Francisco. It’s also why the company continues to experiment with tech-flavored initiatives such as same-day delivery and Shopkick’s ShopBeacon, which lets the retailer deliver personalized, location-specific deals to shoppers’ mobile devices.
“Our stores are the fundamental differentiator from pure plays,” Harrison says of his digital rivals. “So doing both is a whole lot better than doing one or the other.”
This story is from the October 27, 2014 issue of Fortune.