Macy's navigates tariffs, turbulence and retail evolution

Executive overview

Macy's CEO Tony Spring discusses navigating 2025's volatile retail environment—marked by unexpected tariffs, shifting consumer behaviors, and rapid competitive disruption. Department stores remain viable today by serving as marketplaces that blend physical experience with digital convenience, enabling personal connection at scale. The key is balancing long-term vision with fluid, weekly-updated forecasts that respond to real-time supply chain and tariff shocks.

Core insight: Adapt operations weekly while protecting what makes you distinctive, and reframe legacy assets (stores, events, staff) as relationship engines, not just transaction channels.

Why in-person retail matters for next-gen consumers

• Gen Z is actively seeking in-person socialization; shopping is part of their social experience, not just transaction fulfillment.
• Top-tier malls are thriving; mediocre retail dies. Macy's success depends on creating shopping experiences worth the effort, not grudging necessity.
• Experiential events—DJs, flower arranging demos, bottle engraving—drive store traffic and extend Macy's into people's lives beyond transactional moments.
• Physical retail holds ~70% of Macy's revenue. The insight is not to abandon it, but to elevate it with better staffing, merchandise discovery, and human service.

Operating in wartime and peacetime simultaneously

• Tuesday might require peacetime leadership (long-term positioning, culture, growth). November 1st might demand wartime urgency (tariffs, supply shocks, rapid inventory pivots).
• Rolling forecasts are essential. Macy's now updates its forecast and plan weekly—currently on version 27—because tariffs and supply disruptions can flip the business overnight.
• Plans are guardrails, not scripture. The longer the plan, the less accurate it is. Real-time data from traffic counters, conversion rates, and inventory position allow staffing and marketing adjustments hourly, not quarterly.
• Graciousness and kindness don't cost money. Small wins and recognition matter in chaotic environments.

Three-part strategy for "bold new chapter"

Reimagine Macy's flagship stores: Close underproductive locations. Invest in future-state stores with more staff and curated merchandise based on 60,000 customer interviews. Modernize digital experience.

Double down on luxury: Operate three iconic brands (Macy's, Bloomingdale's, Blue Mercury) as distinct marketplace tiers. Gain fair share across all three.

Back-office transformation: Deploy automation, robotics, and AI to eliminate operational complexity and speed fulfillment without customer friction. AI pilots span supply chain, call centers, inventory planning, HR, and marketing—not yet transformational, but generating learning and small wins.

AI adoption: avoiding hype without missing the wave

• Many AI implementations disappoint. Macy's takes a portfolio approach: test widely, measure rigorously, avoid over-investment.
• Both truths coexist: the word AI is overused, and it will transform lives. Don't ignore it; don't overspend on it.
• Technology should scale humanity, not replace it. Use AI to amplify staff insight and customer service, not cut headcount recklessly.
• AI in retail works best on discrete problems: supply chain optimization, workforce scheduling, inventory allocation. General-purpose hype rarely delivers.

The department store as marketplace model

• Reframe "department store" as "marketplace." Offer any category, any brand, multiple price points, serve five generations, operate physical and digital simultaneously.
• This is not dated; it's the future state of retail. Macy's competes not by imitating e-commerce, but by doing what e-commerce cannot: personal service, community events, tactile discovery, social experience.
• What's at stake: turning naysayers into believers. The cynic is destructive; the critic is valuable if listened to closely. Advocates deserve amplification.
• Macy's has survived retail revolutions for 150+ years. The mission now is ensuring the brand means something to the next generation—proving the department store model is not nostalgia, it's necessity.

The Thanksgiving Day Parade as brand experience

• 99th parade, 101st year (two years off during WWII). ~32 million watch on TV; several million attend in person.
• Freshness every year: partnerships with Disney, Pokémon, new Pop Mart characters. Merge cultural trends into both merchandise and the iconic event.
• CEO role: stay out of the way and celebrate the craft. The parade team spends a full year preparing; leadership's job is to protect the process and recognize the work.
• The parade transcends retail. It allows Macy's to live in people's lives as cultural institution, not just store, building emotional bonds that sustain loyalty through disruption.

Leadership priorities in disruptive times

• Self-awareness + ambition: Know you won't be perfect. Baseball analogy: if you outperform average and beat your own history, you win. Celebrate small victories and progress daily.
• Recipe metaphor: Getting proportions right matters. Some things are foundational (customer service, merchandise quality, supply chain resilience); others are icing (flashy marketing, trendy collabs). Allocate investment accordingly.
• Distinguish role types: Advocates get megaphones. Critics provide constructive input if you listen closely. Cynics are destructive and should be managed out.
• What you inherited and what you define: Macy's is part of what people grew up with. The responsibility is ensuring it's part of what future generations grow up with too.