Macy’s Expands After-Sale Offers to Boost Retail Media Sales

Macy’s wastes no time — or money — when it comes to its retail media offerings.

Yesterday, the retailer announced an expansion of its partnership with Rokt, a technology partner that enables Macy’s to offer high-quality, non-exclusive deals to customers who shop online.

Advertisements and offers are displayed to the customer immediately after making a purchase on the Macy’s website. These offers are personalized for each customer, based on both Macy’s own data and Rokt’s partner data.

“Rokt’s unique AI-powered technology allows us to leverage our first-party data to deliver high-quality, premium offers from independent advertisers to our customers after they make a purchase, delivering the right message at the right time, ultimately leading to increased customer engagement,” said Michael Krans, vice president, Macy’s Media Network.

The partnership means Macy’s can leverage new ad dollars, likely with minimal additional investment in underlying ad technology. Rokt’s e-commerce network enables the retailer to leverage information from more than 5 billion transactions across hundreds of leading companies.

It also unlocks an entirely new type of advertiser for Macy’s: non-endemic brands. While endemic ads (i.e. ads for products sold on Macy’s website) are most effective before a customer selects a product on an e-commerce site, non-endemic ads are most effective during the transaction stage, when customers are most likely to respond to new offers.

“It’s the only way for non-network advertisers to reach Macy’s customers within their footprint,” said Michael Krans, vice president of Macy’s Media Network.

Krans says a number of non-endemic brands have already expressed interest, including Paramount Plus, Hulu, Vogue and meal subscription companies.

Protecting the customer experience

Any opportunity to increase ad revenue must be balanced with customer experience. Customers are frustrated by the number of ads they see when searching for products on Amazon, for example. Monetizing every step of the customer journey can ultimately turn customers off.

Rokt says its top priority is to provide customers with the most relevant experience possible. “Rokt’s technology leverages intelligence from more than 5 billion transactions across 2,000+ leading companies, and each message is tailored to the shopper based on factors related to their transaction,” Buchanan says. “This level of relevance is why our engagement rates, which average between 5% and 15%, are significantly higher than the industry average.”

Buchanan adds that if a customer never clicked on an offer on a confirmation page, our technology will ensure they are no longer presented with offers and messages. “We look at the experience from a long-term perspective and believe that sometimes not presenting a customer with an offer is the best experience.”

Macy’s Michael Krans adds that Macy’s Media Network has seen increased customer engagement since partnering with Rokt. “Because the Rokt-powered ad is displayed to customers after the transaction (before they reach the order confirmation page), it doesn’t diminish their shopping experience,” Krans says. “We believe our customers see these special offers as an added value for being a loyal Macy’s customer.”

The Latest on Macy’s Continued Investment in Retail Media

Retail media, compared to a retailer’s core business of selling physical items, is typically very lucrative. By partnering with Rokt, Macy’s can unlock value from an existing asset—customer transactions that are already happening.

The company’s latest achievement is part of an ongoing effort to leverage digital platforms and customer data to create new revenue streams.

Over the past two years, Macy’s has introduced a number of innovations to its media offering, including self-buying, shoppable display ads, top-of-funnel video ads and a partnership with The Trade Desk.

Macy’s RMN launched in 2020, which puts the retailer ahead of other competing department stores like Nordstrom but behind major giants like Amazon, Walmart and Target.

Macy’s Media Network generated $37 million in revenue in the first quarter of 2024. Department store rival Nordstrom has not disclosed advertising revenue for its media network since its launch in 2021, which was $40 million for the full year.

But that victory still dwarfs that of major rivals like Target, Walmart and Amazon.

Amazon’s ad revenue in Q1 2024 was $11.8 billion. And Roundel, Target’s ad business, brought $1.5 billion in “value” to the company in 2023.

Strengthening Macy’s Core Business

Compared to competitors with stronger digital roots, it’s worth asking how much sales Macy’s sells online — since e-commerce sales volume and traffic are key requirements for a retail chain to be attractive to advertisers.

Unfortunately, the most recent digital sales data we have is for Macy’s fiscal 2023, where digital sales declined 7% year over year.

However, the benefits of an expanded partnership with Rokt may extend beyond the ability to further monetize digital sales.

In addition to securing revenue from non-endemic brands, Macy’s now plans to use the purchase confirmation stage to bolster other internal strategic initiatives, such as Macy’s credit card enrollment and participation in its proprietary Star Rewards loyalty program.

Promoting its own loyalty and credit card programs may not directly increase a retailer’s total ad revenue, but there is a long-term benefit in Macy’s ability to grow its first-party data set by increasing participation in those programs. First-party data is an asset that is of great interest to advertisers and can be leveraged in the future as Macy’s retail media offerings mature.

Macy’s new CEO Tony Spring, who took over in February 2024, has made digital a top priority. Strengthening first-party data through better adoption of credit cards and loyalty programs could lay the groundwork for better online customer experiences, as well as provide a compelling value proposition for future advertisers eager for richer customer data sets that will enable more effective media spend and reach.

Summary

With this expanded partnership, Macy’s demonstrates its commitment to building a robust retail media business that leverages its valuable first-party data and customer relationships. By leveraging post-purchase engagement opportunities with personalized, non-endemic offerings, Macy’s can unlock new revenue streams without compromising the customer experience.

Most importantly, the retailer is taking a balanced approach—using these new monetization opportunities to also drive strategic initiatives like credit card enrollment and loyalty program expansion. This holistic strategy positions Macy’s not only to grow ad revenue in the short term, but also to strengthen its overall business by building on its first-party data assets in the long term. As retail media networks become an increasingly important part of the modern marketing landscape, Macy’s is taking smart steps to solidify its position as a leading player in this space.