How Retail is Restructuring for the Age of Artificial Intelligence

Artificial intelligence is transforming retail not through external innovations, but through fundamental changes in business logic. Instead of flashy virtual fitting rooms or chatbots at the forefront, the focus is on supply chain optimization, personalized search, and instant responses to customer actions. For traditional retailers operating in a highly competitive environment, AI is becoming not just a tool, but a new management philosophy.

At Macy’s, this approach is implemented through an 'AI-first' strategy, where technologies are integrated into key processes—from personalization to software development. As noted by Engineering Director Murali Murugan, the goal is not to layer intelligence on top of existing systems, but to restructure processes so that decisions are made faster and the customer experience becomes more relevant by default. The company started with targeted solutions, such as search recommendations, and later scaled the technologies across the entire infrastructure.

Macy’s is now developing conversational commerce with the Ask Macy’s* tool, which functions as a personal stylist. Customers can describe their needs in free form—for example, for a graduation or vacation—and receive a curated selection of products based on their purchase history and context. Here, AI remains an 'invisible layer,' complementing human decisions rather than replacing them. In the long term, this will enable a highly adaptive and personalized shopping experience.

According to Murugan, the key to success lies in continuous improvement. Retailers learn from mistakes, quickly adapt to new technological standards, and optimize processes to make the customer experience increasingly seamless. Meanwhile, the systems driving these changes remain invisible to the end user.