Why retailers should sell experiences, not products, with Macy's CMO

Speaker A: Hi, I'm Adrienne Pascarelli, Senior editor of CMO Strategy and Commerce at ah Adage. And welcome to another edition of the Marketer's Brief Podcast. Our, ah, weekly discussion about marketing news and trends that have the industry buzzing. July 4th is almost here. And that means Macy's 4th of July fireworks show, now in its 50th year. But this time around, the retailer is taking a different approach by tying all of its events and campaigns to one overarching brand message, that celebrations start at Macy's. It's also drawing back to the nation's 250th anniversary. Today, we'll be talking with Sharon Otterman, executive Vice president and Chief Marketing Officer of Macy's. She joined the retailer in 2023 after working at Caesars Entertainment. She'll discuss the celebration start at Macy's platform, what's happening July 4th and how Macy's has found its footing. Now, here's my conversation with Sharon.

Speaker B: M.

Speaker A: Hi, Sharon. Thanks for joining us.

Speaker B: Nice to be here. Thanks for having me.

Speaker A: So July 4th is right around the corner. Why is this holiday so special for Macy's and how are you marketing it differently this year in particular Amid the nation's 250th anniversary?

Speaker B: Yeah, it's a very special year for us in 2026. It's our 50th Macy's fireworks. 50 years ago, when our parade turned 50, the marketing department at Macy's decided to add fireworks as a new tent pole. And so it was our bicentennial that year. And ever since then, we've been innovating on making ourselves having the largest celebration for the nation. And, and it's really exciting to have it be our fifth this year. What we're doing this year that's different is we've combined it in a whole year of celebration because not only our fireworks are 50 and our parade is turning 100 in November, we've decided that we would celebrate the entire year with this year of celebration. And that means that we're helping customers celebrate moments both big and small. We've always been a place for celebrations. You come to us when you're celebrating, whether it's Mother's Day or Father's Day or wedding or prom. And so it was an organic place for us to play. But we're excited to bring these big tent poles now into the fold for our celebration year.

Speaker A: So what will the fireworks specifically entail?

Speaker B: Yeah, you know, every year the biggest question I get on the fireworks is, is it going to be the east side, Is it going to be the west side? The answer this year is both. So we're excited that we're not only doing downtown by the Brooklyn Bridge and we're going to be projecting on the Brooklyn Bridge, but we're also going to be having our fireworks come out of Jersey. So you'll be able to see east and west side. And we are innovating this year in terms of some of those projections and, uh, what we're doing with the bridge itself and the most amount of shells that we've ever had. So I'll have 85,000 shells, which will continue each year to make it, um, bigger and bigger so that we're the largest fireworks celebration.

Speaker A: So the celebration start at Macy's, as you said, is a new platform that you've really been able to tie all your messaging into. It's so helpful how you, um, nice round numbers for 50th and 100 and then 250th for the nation. But can you talk a bit about how the idea came about? Because it's more than just those big tent poles to your point. It's the smaller moments too, in consumers lives. So can you talk about how you came up with this strategy and also how it's been going?

Speaker B: Yeah. So when you talk to consumers and you understand the role that Macy's play, we know that our purpose is to help inspire these lasting memories for customers. And when you talk about what counts as a lasting memory, they talk about how important it is to come to us when they're getting ready for something. So they're getting ready for these celebrations, they're getting ready for the prom. And God, I remember that prom dress moment with my mom and going up the wooden escalators and I was going to pick up the dress that I always pictured and the moment. I even helped my kids be able to pick out a Father's Day gift for their dad. Like those getting ready moments, we've always been there, so we always start with the consumer insight for that. And we wanted to take those getting ready moments for the big tent poles, which we get ready for 18 months in advance and make sure we can help consumers get ready on the everyday moment. So we've launched these celebration Saturdays in our stores that really help customers get ready. So they can come in, they can do engraving, they can have an experience that they interact with. They, we create a whole bunch of content for them and experiences. And it starts with helping the consumer get ready. So all starts with the insight from the customer.

Speaker A: And what does the campaign entail because it's more than just the TV spots. There's these Saturday in person activations. And what else is part of this?

Speaker B: The shift we really made this year was going from fragmented campaigns to cohesive campaign platform. So that means that in addition to this moment before spot that we were running in the prom and we're about to Launch one for July 4th of uh, getting ready for the 4th of July and having the outfit and being prepared, we also have those experiences in the stores and then we also have experiences outside of the stores. So we're going to be, um, working with the Cubs, for instance, with their fireworks and really trying to get the celebration to be national, not just in New York. So it's, it's a range of experiential plus ad campaign plus social media, all to help customers get ready for these big events.

Speaker A: And what kind of feedback are you hearing and seeing from customers in terms of engagement?

Speaker B: Yeah, it's been fun to go in the store on these celebrate Saturdays. I feel the energy of when you see that it's not just about a transaction of shopping for the dress, it really does become these experiences in the moment. So you remember those big times where you bought something to get ready for something, whether it's your first suit for your first job interview or a dress that you're wearing for a wedding or just being able to have a new regimen for your beauty. You remember those moments, you remember who they're with. So when I go into the store, I see, I see energy. And that to me, um, sometimes is the leading indicator before you even see any of the business metrics as well.

Speaker A: And have you seen any business metrics that are making you smile?

Speaker B: They are. You know, we look at both traffic and conversion and we're really seeing on those celebrate Saturdays, we love looking at our traffic numbers, but we also love looking at conversion and really seeing customers engage not only with the content but at these events themselves.

Speaker A: Have you had to make any adjustments or tweaks as you've executed this overall platform with the activations and the TV spots and all of that?

Speaker B: Yes, yes and yes. I think like, uh, a lot of marketers today, we, and especially being a retailer, we not only look at the week, but we look at the month, we look at the quarter and then we look at the five years and we tweak as we go. And some of it has just been, you know, I think as a marketer you always want more lead time. So as the events went on, we had some more lead Time to be able to plan. But we've added more interactive elements as we've gone. We've saw, um, with. We started with Prom back in March, and it was a fun experience. A little bit of music element in the store and getting together. But as we went on to Mother's Day and Father's Day, we had a lot more of the engraving stations, the embroidery stations, and adding on those interactive elements. We found that customers really wanted to stay longer, and so we added more and more, and we'll continue to do that as the year goes on.

Speaker A: Let's talk a bit about your agency roster. What agencies are you working with currently and for what Marketing channels. And do you ever do anything? Have you ever brought any work in house?

Speaker B: We do a combination of both because we do such a huge volume of work by having our promotional sales and the signage in the store and all that. So we've always done a combination of both. But we're working with Spring Studios on our fashion campaign actually shooting today right after this. We are working with both Omaha Productions and BBH on some of our gifting and holiday work. But, you know, we are still in the market for chief Creative officer. And so as we make that higher, we will continue to look at. We're always looking in the market for adding new folks in and of course, maintaining the roster that we have. So. But we do have a key position open that we are looking to fill.

Speaker A: Is that a new position?

Speaker B: It's not a new position. We had somebody retire in that role. And so we are, um, excited to be able to add new folks to the team.

Speaker A: Let's talk a bit more about how Macy's is working to insert its brand into cultural events. I feel like the World cup is a current example of this, um, with your summer Ultimate World Soccer HQ campaign. Can you explain the positioning there?

Speaker B: Yeah, you know, we love to work with our merchant partners. So between Adidas and Nike, we work with partners that have great World cup product. And because we really focus on celebrating these moments, big and small, celebrating World cup and Father's Day, just perfect alignment. And so we have activations here in Herald Square and a lot of our stores that really bring the World cup experience to life. So it's not about just going in and making the transaction, about buying the jersey, but it's about everything of, um, meeting people, ticket giveaways, and really just bringing the experience to life.

Speaker A: And what other cultural touch points are you looking to be part of for the remainder of the year? Kind of what's ahead.

Speaker B: So we do have some relationships with some baseball teams this summer where we're going to be celebrating getting ready for summer and getting ready for baseball. We have some relationships with some artists and concerts that we're going to be able to help people get ready for one of the biggest music seasons as well. So it's all around this, getting ready for these celebrations that, that start at Macy's. And of course we've, uh, we've had a nice little activation downstairs of just helping the Knicks in this last round of the playoff, selling a couple of jerseys as well.

Speaker A: Is there anything that you guys have been a part of with this platform that you think people, consumers would be surprised at? Like, they would be surprised that, oh, I didn't know Macy's was, was doing that, or I didn't know that was something from Macy's because I feel like part of the transformation that you guys have had is really modernizing the brand and kind of, you know, you have such a history, but a lot of the recent success is from some of this newness, this experimentation.

Speaker B: Yeah, I love that question. Uh, the big shift that we've been making is really just not making it just an event where you go and buy a product. It's really been about this next level of immersive experiences. During our flower show, you could build, uh, one of the LEGO flower products. We had a great immersive experience through Valentino. And so having those immersive experiences, not just coming into the store and buying something, but coming in the store and being able to have an activity, being able to bring the brand to life the way that we do with the parade and the fire works. It's that retailtainment that we call it to kind of bring every, all the worlds together.

Speaker A: And what, uh, challenges have there been? I know that the New York store, the flagship, is a real magnet, is a draw, but what about when you think about rolling this out to the whole fleet across the country, it feels like that could be challenged because you have, you know, staffing issues or kind of execution issues there.

Speaker B: Yeah, it's a great point. I think for us it's really been that is the opportunity of figuring out how to be able to scale. So we love to activate in Herald Square. We also activate really big in our State Street Chicago store as well. We had a mini flower show pop up there this year and we've experimented for prom. We were in 200 doors and mother's Day, we called it down and we were in a lot fewer doors. And so we are getting the Event experience. Right. And continuing to scale. We've always done events though as Macy's and every given weekend we do beauty events, we do jewelry chunk shows. It's these larger scale celebrate events. We've been figuring out what's the right amount to do in the way that we want to be able to do them. Getting the formula right and then going back out and scale so that you know, at some point all of our doors can experience the retail tainment.

Speaker A: Now Macy's has been around for more than 150 years. We all know that and also know that it's had its share of ups and downs. But recently you guys have been on an upswing with some strong quarterly results. Congratulations on that. As uh, a legacy brand that has been able to reinvent itself for modern times, what advice do you have for other brands that are looking to do the same thing?

Speaker B: That's such a good question. It's knowing who you are. You know, we've never forgotten in 168 years of who we are that in our purpose it isn't about retail, it's about inspiring memories. And we know that role that we play for customers and that we help them get ready. And the changes that we've been evolving as part of our bold new chapter over the last two and a half, three years has really been about that. It's about making sure that our assortment is relevant. The experience in the store is helping customers get ready. But we haven't lost sight of who we are and we haven't lost sight of who our customer is. And that's really important.

Speaker A: And when you think about some of these newer marketing channels or at least budgeting more for the in person activations and some of the celebrations, how, how are you figuring out what you know because you have a uh, fixed budget for the most part for marketing, how are you figuring out which channels to put more into and which channels to put less into? When you think about your media mix,

Speaker B: your budget, there's two things really at play. And we use all the measurement tools you can imagine. Media mix modeling, multi touch attribution, last click attribution, that's on one side. On the other side is with these big platforms and we now have them mapped out all the way through to 2028. Having a more cohesive platform allows you to be a lot more efficient. So we look at all the metrics and all the science from all those tools and then we look at the art piece and say putting it under a platform like Celebration start at Macy's and we have two platforms coming in 27. That helps us make our media dollars go a lot further and make our creative more clear to the customer.

Speaker A: And who do you work with for your media?

Speaker B: We work with Spark.

Speaker A: And what about when you think about other brands, like in terms of inspiration, where, where are you getting your marketing inspiration? What brands think are doing a good job right now and why?

Speaker B: You know, I have jealousy over, um, you know, I come from media and I look at what Netflix has done of coming from a red envelope to being in an incredible, not only streaming service, but a brand that it has become like Kleenex as a verb. You know, I think about after a long day, I'm going to go watch, you know, I'm going to Netflix. Right. Like, and I love what they've done. I loved the combination of really understanding who the consumer is and balancing, balancing technology with the curation and you know, at the end of the day we're a curator and we believe that we. Retail therapy is a real thing. And I think Netflix is in that same kind of business. They have to curate a million of high quality titles, make sure they really understand the consumer can take them away and immerse. And uh, I think they've done a great job. They've done a great job from not only advertising but immersive experiences. We, we love making their floats and their balloons every year in the parade itself and partnering with them. And so I think they've been a very interesting, um, story for sure over the past, you know, 30 years, I guess now I don't even know how long.

Speaker A: But, um, yeah, it's funny to think about where they started and those, you know, getting the, the uh, DVDs in the mail, hoping it wasn't damaged. Um, and now the K Pop Demon Hunters was such a success. Their biggest challenge is coming up with what are our kids going to be watching, uh, next year.

Speaker B: And it's been so fun to have the K Pop Demon Hunters in our parade and Stranger Things. And it's just, you know, the world of our brands, you know, working together, you know, very different from what you would have seen in our red envelope world. Right. So.

Speaker A: And then one more question before we go. ADH has started a new series called CMO Survival Guide. And it gives practical advice for chief marketers dealing with unprecedented change in the role. I was wondering if there's one thing, uh, that you would say has changed the most about your job as a CMO in the last year or so.

Speaker B: You know, I think with the role that AI is playing in marketing, it forces you to really be about customer needs, not just about customer transactions. Right. So if a customer in the past was looking, typing in and saying, I want to dress today, they're typing into AI saying, I have to go to a beach wedding. What do I wear? Marketers have always been about solving problems like that, and I think so the role that we can play, CMOs can play in the organization by really not only wrapping marketing campaigns around customer needs, but being able to help think through those strategic shifts, um, as a company with customer needs is a new, interesting role that marketers are going to play, um, today and going forward as AI expands.

Speaker A: We didn't even talk about how AI has changed your role. That's a good example. Is there anything else about AI in the marketing function at Macy's that has, um, moved the needle?

Speaker B: Yeah, we love that. It's a combination of that. AI is only as good as the human prompts behind it. So that interaction between humanity and what the technology enables, and whether that's retouching or being able to look at a lot of our measurement data in a more cohesive way, we've just been experimenting with a nice mix of when human meets technology. Like, what's the possibility that can happen?

Speaker A: Well, we are out of time. Thank you so much for joining us.

Speaker B: Yeah, thanks for having me.

Speaker A: That was Sharon Otterman, executive vice president and Chief Marketing Officer of Macy's. And I'm Adrian Pascarelli, senior editor at Adage. I'd like to thank our producer, Lauren Ciardio, and invite you to subscribe to the Marketers Brief podcast on your favorite player. We promise to keep it brief or at least short enough for your morning coffee. Thanks for tuning in.

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