Melanie Zimmermann of Macy: The Remote-First Management Principle That Builds Strong Culture and Drives Retail Innovation

As a part of our series about the future of retail, I had the pleasure of interviewing Melanie Zimmermann.

Melanie Zimmermann is Vice President of Macy’s Media Network, an in-house media agency for the iconic retailer. Tapping into cross-category consumer insights, Macy’s Media Network connects brands to shoppers through relevant and personalized advertising cultivating greater engagement. Melanie has 15 years of experience creating and executing growth strategies at the intersection of marketing and digital. As the Head of Macy’s Media Network, Melanie is responsible for developing and executing strategy and leading all retail media functions inclusive of Advertising Sales, Account Management, Media Planning, Campaign Management, and Analytics. In her previous roles at Macy’s, Inc., Melanie led the Strategy & Innovation and Customer Analytics function. Before that, Melanie worked as Strategy Consultant at Bain & Company.

Thank you so much for joining us in this interview series! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?

Prior to joining Macy’s, Inc., I was a consultant with a focus on developing business strategies that drive results. I was very passionate about change management and saw an opportunity to join the iconic retailer at a time when it was going through a transformation amidst a very dramatic and exciting change of the entire retail industry.

In 2015, I helped launch Macy’s off-price Backstage business. I loved the fast pace at which we built the new business and dreamed that perhaps I would start a business myself one day. And then I was tapped to launch Macy’s Media Network, our in-house advertising business that allows brands to connect with consumers by way of advertisements across their entire shopping journey, which spans digital and in-store. I saw this as a tremendous opportunity because I realized that in-house retail media networks are poised to become a critical part of the future of retail. They have the potential to fundamentally change the relationship not only between retailers and brands they work with, but also between retailers and customers through personalization of the shopping experience. In my role, I have been able to apply my passion for building new businesses and my strategy toolkit to a new venture that’s helping to shape the future of retail and is an important contributor to the overall success of Macy’s, Inc.

Can you share the most interesting story that happened to you since you started your career?

I was promoted to lead Macy’s Media Network in March 2020, right when the pandemic hit the country. Given the new reality, I decided to build the entire organization around a remote work model. Two years later, I have hired a 45-person team and I am yet to meet most of my hires in person. Despite, and perhaps because of, our remote model, my team has some of the best culture and engagement scores in the company. I think my team’s success is proof that you don’t need in-person office time to build a strong culture and deliver great business results.

Are you working on any new exciting projects now? How do you think that might help people?

I’m very excited about what’s next for Macy’s Media Network. It’s such a dynamic and growing space for the future of retail, and I am thrilled to be helping shape it. What makes it fun is that retailers in every category are launching retail media networks, and this is driving innovation and competition. Industry forecasts expect U.S. retail media networks to exceed $52 billion in ad sales by 2023.

As the style source for generations of shoppers, at Macy’s, Inc., we strive to inspire our customers and help them discover new brands and products across all the categories we sell. To that end, my team will continue to innovate new advertising formats and campaign landing pages to offer more relevant and personalized content to help them own their style and make their shopping experience enjoyable and fulfilling. As we build new offerings, our brand partners will also find value in growing their business and reaching new customers, by engaging shoppers where it matters most.

Over the last 18 months since our launch, we have developed comprehensive media offerings across all customer touch points and highly sophisticated customer targeting capabilities. And our pipeline of innovation for 2022 looks exciting: we will continue efforts to personalize advertising content for our customers, launching self-service options to give our brand partners more flexibility, and we are looking to broaden our client base with adding non-endemic partners.

None of us are able to achieve success without some help along the way. Is there a particular person to whom you are grateful, who helped get you to where you are? Can you share a story?

I learned a lot from Jill Katz, founder of consulting firm Assemble HR, about the importance of “Candor, Courage, and Care” in people-focused leadership. Retail media is a talent-driven business, and I have placed great emphasis on a highly engaged, collaborative team culture from day one.

How have you used your success to bring goodness to the world?

As an organization, Macy’s, Inc. is committed to using its resources, talent, and scale to advance diversity, equity and inclusion. To that end, we recently launched our social purpose platform, Mission Every One, committing $5 billion of the company’s spend over the next four years to the partners, products, people, and programs that help create a more equitable and sustainable future.

I am proud that my team at Macy’s Media Network supports these efforts by helping drive awareness for sustainable and diverse brands at Macy’s and Bloomingdale’s. In the next couple of months, we’re launching a campaign supporting underrepresented brands and creating opportunities for emerging brands to utilize the media network’s services. Pulsed at various times throughout the year, this campaign will help raise customer awareness and traffic to Asian, Black, Hispanic/Latino, LGBTQ and women-owned brands we carry — particularly those brands that we have identified as part of our retail diversity development program with which we plan to increase our investments with over the next several years. We have also identified opportunities for select brands to participate in Macy’s Media Network’s paid media offering, as part of our commitment to accelerate growth and exposure with underrepresented brands.

The Pandemic has changed many aspects of all of our lives. One of them is the fact that so many of us have gotten used to shopping almost exclusively online. Can you share a few examples of different ideas that large retail outlets are implementing to adapt to the new realities created by the Pandemic?

As a result of the pandemic, more consumers became omnichannel — they shop online but also visit stores. Today, shopping is more about ease, convenience and a seamless experience. At the same time, many consumers increasingly want and seek style advice and personalized attention. This presents an opportunity for retailers who have access to data and insights about consumers’ preferences and shopping habits to create truly personalized and guided shopping experiences.

At Macy’s Media Network, we support our company’s efforts by creating inspirational, guided ad campaigns both online and in-store. We have had great successes partnering with multi-category vendors like Ralph Lauren. We have also had success studying the impact of our campaigns on both in-store and online shopping behaviors, which is very valuable for our brand partners as we can advise them on better ways to connect with consumers.

The supply chain crisis is another outgrowth of the pandemic. Can you share a few examples of what retailers are doing to pivot because of the bottlenecks caused by the supply chain crisis?

Retailers across the board had to quickly transform their supply chain approach to effectively navigate the disruptions. At Macy’s, Inc., our supply chain team proved to be creative and agile and employed a myriad of mitigation strategies to navigate bottlenecks. These included sourcing from manufacturers that have transnational capabilities, placing orders on merchandise early to secure inventory, reducing reliance on the large ports and making quick decisions as to whether to move product by rail or truck. Our company also made a lot of investments in adding technology, as well as data and analytics, to be able to forecast blockages in the supply chain and have a better understanding of when and where we need goods. These efforts paid off for Macy’s Inc. in 2021, and we are continuing to deploy them in 2022.

How do you think we should reimagine our supply chain to prevent this from happening again in the future?

The turmoil caused by the pandemic brough supply chain to the forefront for all retailers, and it’s clear that all players need to rethink their supply chain strategy to successfully operate in this rapidly changing and highly vulnerable to disruptions reality. Building resiliency and flexibility in the supply chain is critical. Identifying your specific risks and diversifying your supply base is important. Data science and analytics will continue to become more important. At Macy’s, we have been focused on upgrading our infrastructure and network to move quicker and more efficiently to fulfill customer orders conveniently and profitably. We also leverage data science on receipts and inventory to make sure it’s being delivered through the right channel and the right markets to meet demand.

In your opinion, will retail stores or malls continue to exist? How would you articulate the role of physical retail spaces at a time when online commerce platforms like Amazon Prime or Instacart can deliver the same day or the next day?

We’ve found that today’s customers are increasingly omnichannel, shopping with us both online and in store. They want to have flexibility to seamlessly shop whenever and however they choose. To that end, stores continue to play an important role in Macy’s retail ecosystem. In addition to being a place for discovery and shopping, our stores are also fulfillment hubs, supporting our digital operations through buy online pickup in store, curbside pickup and same-day delivery. Our digital sales are higher in markets where we have stores than those where we do not. We are investing in new store formats and experiences, like smaller format off-mall locations, as we reposition our store footprint.

​The so-called “Retail Apocalypse” has been going on for about a decade. While many retailers are struggling, some retailers, like Lululemon, Kroger, and Costco are quite profitable. Can you share a few lessons that other retailers can learn from the success of profitable retailers?

At Macy’s, Inc., we demonstrated strong performance in every quarter of 2021 despite COVID-19 related disruptions, supply chain issues, labor shortages and elevated inflation. A lot of this success is due to our transformation efforts that enabled us to be more digitally led and customer-centric in our planning and execution. We know and understand our customers, and I believe it’s critical for any retailer who wants to be profitable. The most effective way to understand your customer is through data and insights — by understanding your customers you can deliver a shopping experience that is relevant and engaging. At Macy’s, Inc., we’re enhancing how we use our personalization capabilities to increase engagement that drives positive brand perception, additional visits and purchases. My team at Macy’s Media Network plays a critical role in supporting our personalization strategy. We use data and insights to both provide ads that are relevant to our customers and ensure that our brand partners are effectively reaching the customer. Moreover, our media network is an additional meaningful revenue stream of our company.

Amazon is going to exert pressure on all of retail for the foreseeable future. New Direct-To-Consumer companies based in China are emerging that offer prices that are much cheaper than US and European brands. What would you advise to retail companies and e-commerce companies, for them to be successful in the face of such strong competition?

I would advise retail companies to keep the customer at the center of their strategy, rather than just looking at the competition. At Macy’s, Inc., we are focused on offering great products at great value, delivered to consumers in the most convenient and easy ways of shopping. And great value is not just a low price. Great value is a combination of both quality and price. We provide quality products through both market and private brands. And our pricing science initiatives allow us to more effectively and strategically price our merchandise while staying competitive within the retail environment, delivering value to our customers and having healthy margins within our business.

Based on your experience and success, what are the five most important things one should know in order to create a fantastic retail experience that keeps bringing customers back for more? Please share a story or an example for each.

1. Make it easy for a customer to find what they are looking for. An example can be improving the relevancy of search results with sponsored products, highlighting relevant additional items.

2. Help the customer discover new items. One way we do it at Macy’s is through advertisements driving awareness of new product launches.

3. Take the guess work out for the customer — help them choose the right style and size. At Macy’s, we created Own Your Style platform, a curated destination that offers customers style inspiration and product recommendation on the latest trends.

4. Provide a fast and reliable shopping experience. Excite their imagination and invite to do additional shopping by including package inserts to drive discovery of additional items.

5. Stay top of mind by following up with relevant communications, like personalized emails with new products or promotions.

If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

Start each day with an act of kindness, and end each day reflecting what you are grateful for.

This was very inspiring. Thank you so much for joining us!