Repositioning retail for the AI era

Macy’s is embedding artificial intelligence into its core operations, moving beyond isolated pilots to a strategy that senior director of engineering Murali Murugan calls “AI-first,” according to a sponsored report from MIT Technology Review [1]. The department-store chain is redesigning decision-making systems for personalization, search, and software development to compress what Murugan describes as “the gap between the signal and the action” [1]. The initiative reflects a broader push by legacy retailers to integrate AI directly into workflows rather than layering it onto existing processes [1]. Murugan said the approach is not about adding intelligence on top but about redesigning how decisions happen so the business moves faster and every experience feels more relevant by default [1]. Early efforts targeted search recommendations and customer engagement, where measurable gains in conversion and reduced friction built internal momentum. “Once we established the quick wins, scaling was a business decision, not a technology debate anymore,” Murugan said [1]. That momentum has extended into conversational commerce through Ask Macy’s, an AI-powered shopping assistant designed to act as a personal stylist. Customers can describe needs conversationally and receive curated recommendations informed by past purchases, preferences, and context [1]. The company views AI as an invisible layer augmenting human judgment rather than replacing it, with a long-term vision of retail that feels seamless, adaptive, and personalized through systems customers may never notice [1]. Macy’s push arrives as the U.S. retail sector continues a decades-long pattern of consolidation and technology adoption. Mergers and acquisitions have repeatedly reshaped American retail, from the rise of chain stores and department-store conglomerates in the early 20th century to the digital revolution of the 1990s and 2000s, when traditional retailers consolidated to compete with online rivals [3]. The integration of digital and physical sales channels has since become a defining feature of the industry [3]. Murugan emphasized that continuous improvement underpins the transformation. “It’s about learning from the mistakes, quickly adapting to the newer technology standards that are coming into play, timing, and execution which compound into a meaningfully better customer experience,” he said [1]. The content was produced by Insights, the custom content arm of MIT Technology Review, in partnership with Infosys, and was not written by the publication’s editorial staff [1].