Macy’s Inc. has expanded its retail media network capabilities, working with technology provider Rokt to leverage artificial intelligence. The retailer says this move will make the shopping experience more personalized and relevant to each customer.

The company’s retail media business, called Macy’s Media Network, is an in-house platform that connects advertising partners with Macy’s customers. Rokt uses AI technology that it says is powered by more than 4 billion transactions a year. Through the partnership, Macy’s Media Network seeks to support Macy’s initiatives for its credit card enrollment and membership in its loyalty program, called Star Rewards.

Macy’s Media Network began in 2020, and it first started its Rokt integration in the fall of 2023. Among the integrations it uses is an ad served on the order confirmation page after a customer completes a transaction, Michael Krans, Macy’s Media Network vice president, told Digital Commerce 360.

In Macy’s Media Network’s current state, Krans said, “the vast majority of our revenue stems from digital advertising, whether it’s on-site advertising or through off-site media activations.”

Macy’s also uses digital screens for advertising in 98 of its stores, which its media network uses.

Macy’s is No. 16 in the Top 1000 Database. The database is Digital Commerce 360’s ranking of North America’s largest online retailers by their annual web sales. In the Top 1000, Digital Commerce 360 categorizes Macy’s as an Apparel/Accessories retailer.

Digital Commerce 360 projects Macy’s total web sales in 2024 will reach $7.30 billion.

Macy’s web sales by year

Importance of first-party data in a retail media network

The Macy’s retail media network’s unique selling proposition, Krans said, stems from its first-party data. Other retail media networks have highlighted similar advantages, particularly in light of Google’s recently curbed plans to deprecate third-party cookies for user tracking. However, Krans said Macy’s Media Network’s strength remains in the quality of its first-party data, which no other data provider can sell.

From there, it comes down to the retail media network’s ability to reach known customers in open web environments and then measure against those media campaigns. That helps Macy’s achieve closed-loop attribution and measurement, he said.

“That has a benefit over using a third-party audience ’cause you can deterministically reach the Macy’s or the Bloomingdale’s customer,” Krans told Digital Commerce 360.

“A very high majority” of Macy’s customers use traceable — or digital — tender at checkout, even in physical stores, he explained. Unlike when a customer uses cash or a gift card, a customer using a credit card or digital wallet helps the retailer close the loop when it comes to marketing attribution.

“We have a very good match rate when it comes to attributing the store sale to someone who’s been exposed digitally to an ad,” he said, declining to specify the rate.

How Macy’s Media Network uses Rokt technology

Since starting the Rokt integration last fall, Macy’s Media Network slowly ramped up how many customers it exposes those ads to, Krans told Digital Commerce 360. He added that the media network has now fully scaled its Rokt integration on Macys.com.

The integration is also a new way for non-endemic brands to advertise on Macys.com. In other words, Macy’s Media Network is offering a new way for brands that Macy’s does not stock in its stores or on its ecommerce website to advertise with Macy’s customers.

“We’re constantly iterating on the creative spec, the copy — testing different copy formats, testing an ad with a logo, without a logo, the placement, like when the customer receives the ad,” Krans said. “Most of our customers receive it as an overlay, which is sort of a pop-up, so after you complete the transaction. Between when you press click to buy and you land on the order confirmation page, you receive an overlay ad. That ad appears to you sort of as an in between. In other cases, you land on the order confirmation page and the Rokt is an embed on the order confirmation page.”

Krans said Macy’s Media Network uses Rokt to help make decisions, feeding off the billions of transactions it powers “to inform which non-endemic advertiser and which particular offer will resonate most with a given customer.”

What Rokt brings to Macy’s Media Network advertising

Rokt also “reads signals” from Macy’s Media Network’s first-party data, Krans added.

“A lot of what is at the core of Rokt is how you deal with what we call the paradox of choice, where when you’re confronted with more, your conversion is less,” Rokt chief marketing officer Doug Rozen told Digital Commerce 360.

Using AI, machine learning and generative AI to help with decision-making, Rokt tries “to put the best offer in front of the best person at the best time in order to ensure that less is more,” Rozen said.

He added that sometimes, machine learning and AI predictions tell Rokt that an ad might not be the best action to take for a certain consumer. Instead, it might be a third-party offer, or in Macy’s case, an internal initiative such as its loyalty or credit card programs.

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