Macy’s (M) enjoyed a decent holiday season that saw it break a three-year streak of sales declines, and its top executives have made clear they are doubling down on new technology to avoid sliding again.
Following its announcement reported last week by Fortune that Macy’s would introduce mobile checkout at most stores by year-end, the department store chain said on Monday that it will update its shopping app and site this year so the merchandise it suggests to shoppers is more in tune with their interests. Macy’s is also introducing virtual reality to the furniture departments at 60 of its 650 stores.
Visitors to Macy’s website or shopping app are greeted by generic merchandise and information about a discount. But by the end of the year, Macy’s plans to welcome digital shoppers with merchandise that is tailored to their past shopping and spending patterns along with other information provided by the customer.
And the item will often be show with addition merchandise that could be complimentary. For example, if you frequently buy cashmere sweaters, Macy’s may suggest a new sweater but also with pants and shoes that go with it. That is part of Macy’s efforts to restore what CEO Jeff Gennette has called its “fashion authority.” And as it has done in stores where sales signage has been reined in, the electronic messaging about discounts will be limited.
In the physical world, Macy’s entices shoppers inside with its store windows, says Jill Ramsey, Macy’s recently appointed chief digital revenue officer. And so it is in the digital realm, Macy’s hopes.
“This is really our front window now,” she told Fortune in an interview on Monday at Shoptalk, a retail conference in Las Vegas, pointing to phone.
Figuring out via algorithms what items to offer shoppers has bedeviled retailers for years. Indeed, personalized offers have long been a priority for retailers, but success has been elusive. Too often, shoppers have been bombarded with offers based on something they bought only once, or for another person as a gift. But armed with tools such as a newly strengthened loyalty program and better tech, Macy’s believes it can crack the code.
And as online retailer StitchFix has shown, once you figure out how to make relevant offers, your app becomes habit forming. And the utilitarian ease of shopping on Amazon shows that department stores have to make their shopping about more than discounts and convenience, and more about the specialness of an item.
According to eMarketer, Macy’s is the seventh largest online retailer in the U.S. now, garnering some 20% of sales on line. But under Macy’s president Hal Lawton, a longtime eBay executive appointed last year, Macy’s is planning to take it up a notch with the VR test.
Shoppers will be able to imagine how Macy’s tables and sofas would look in their own actual dining and living rooms by using the app to on their phones. Home goods are a key area of more growth for Macy’s, says Ramsey.