Is AI the Next Frontier for Macy’s New CMO?

IHL Sees Potential for $7.5 Billion in AI-Driven Business Gains Through 2029 — Will Macy's new CMO Take This On?
Liz Dominguez
Managing Editor
Liz
Macy's logo

Macy’s has named a new chief marketing officer, tapping Sharon Otterman for the role. Otterman will be spearheading the company’s strategic marketing, brand activations, content planning, visual merchandising, media strategy, and more. 

While Macy’s doesn’t name artificial intelligence within its ongoing marketing efforts, the No. 1 Department Store by market share has been experimenting with “the intersection of fashion and technology,” according to Dave Torres, VP of interactive marketing at Macy’s in an earlier statement. 

It’s safe to say that it’s only a matter of time before artificial intelligence-powered marketing makes its debut at Macy’s, and new research from IHL Group shows the retailer is poised to rake in $7.5 billion in additional business gains through 2029 due to its AI readiness. 

The increased growth is a sum of up to $3.8 billion in increased sales and $2.1 billion in improved gross margins as a result of lower production costs, optimized pricing, and improvements across the supply chain. IHL also expects these AI efforts could reduce about $1.7 billion in sales and generative admin costs through 2029. 

IHL isn’t discounting human-led progress, however. Rather than cutting back on headcount, the company sees these benefits as ancillary through supportive technologies like generative AI, traditional AI, and machine learning, which can lower expenses. 


IHL’s Methodology

The Retail AI Readiness Profiles research evaluates companies based on AI readiness, providing insights into the potential impact AI can bring to their organizations. The research company analyzed nearly 200 North American public retailers and restaurant chains. 

“Our research approach was to start by looking at opportunities from an industry-level, then to the segment and specific retailer level leveraging our public and private data,” said Greg Buzek, president of IHL Group. “We then applied a nine-point algorithm to each company that measured items like data maturity, analytics maturity, alignment with key vendors, as well as free cash flow.”


While IHL predicts this overall growth as an enterprise-wide investment, touching all areas of business including merchandising, sales and marketing, infrastructure, store systems, and more, the marketing function is especially ripe for AI-powered innovation. 

Adidas and Traeger Grills, for example, are tapping into generative AI to open up capabilities related to content creation, data visualization, and complex calculations — simplifying data so that executives can better transform insights into actionable strategies. 

Also, Tapestry (parent company to such brands as Kate Spade and Coach) is bolstering its marketing efforts by leveraging generative AI tech to automate online personalization.

According to Gartner, the top potential use cases for generative AI are “generating novel, diverse, and personalized copy content, audio, video, and images at speed and scale; and saving time and cost for audiences in different languages spread across other geographical boundaries.”

For sales and marketing at Macy’s, specifically, IHL reports that of its potential AI-driven growth, promotions management could make up $132.3 million, CRM for retail $128.6 million, price management and optimization $107 million, call center $67.3 million, and digital content creation $63.1 million.

 

IHL provides an in-depth profile that breaks down additional categories by line of business

About Otterman

As CMO, Otterman will be building brand awareness, increasing engagement and loyalty across all customer segments. She will also be overseeing iconic Macy’s events, such as the Thanksgiving Day Parade, the fourth of July fireworks, and the company’s annual Spring Flower Show. 

She brings more than 25 years of marketing and brand transformation experience for Fortune 500 companies across several industries, including entertainment, media, and sports. Otterman was most recently the CMO for Caesars Entertainment, where she launched Caesars Sportsbook, a new sports betting brand in the U.S., and elevated the sports betting and gaming brand experience.

Otterman takes the CMO spot beginning December 11, reporting to president and CEO-elect Tony Spring. 

“Sharon brings a diverse background in media, entertainment, and digital transformation to Macy’s. We are excited to leverage her expertise to bring more retail theater across our shopping experiences,” said Spring in a statement. “She is a passionate strategist and has a successful track record of evolving brands, developing creative marketing campaigns, and driving profitable growth. We look forward to having Sharon as part of our leadership team.”

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