Q4 at Saks: Stores Down, Digital Up
● At the luxury retailer, digital demand represented nearly 60 percent of owned business during the holiday season.
Like other retailers, Saks Fifth Avenue is getting through the pandemic because customers are increasingly shopping online.
“As predicted, business softened at the start of the fourth quarter, but ramped up during the prime holiday shopping season, thanks in large part to our strong digital performance,” Saks’ president and chief executive officer Marc Metrick wrote in his quarterly letter to vendors. “During this period, digital demand represented nearly 60 percent of owned business for this period. Additionally, our decision to delay our designer sale break was successful in driving more full- price selling.”
Since the Hudson’s Bay Co. went private in February 2020, no financial figures on Saks or the other HBC divisions are released publicly, making it difficult for outsiders to get a read on the retailer’s performance. Metrick issues his quarterly letters to keep vendors apprized on certain developments at Saks.
In his latest letter, he wrote that more customers shifted their spending online and “responded positively to our revamped online experience. New site features that were strong performers include new segmented homepages and improved internal search functionality. Additionally, our section of curated editorial content, ‘ The Edit,’ continued to generate high page views.”
As expected, traffic at Saks Fifth Avenue stores continued to be down overall last quarter. “Our two Toronto locations temporarily closed due to government orders and New York experienced challenges, which may be attributed to the ongoing pandemic and a continued decline in tourism. However, key markets such as Detroit, Atlanta, Boca Raton and Philadelphia were up double digits to 2019,” Metrick wrote in the letter.
Consistent with the third quarter, men’s, women’s accessories, kids and fragrances continued to be top- performing categories across all channels, Metrick said.
He also said he expects business to ramp up over the course of the year, and acknowledged continued uncertainty due to the pandemic.
In 2021, Saks will continue to introduce “new personalization initiatives, enabling more individualized interactions for each customer.” As part of these efforts, Saks will unveil an online preference center, amplify clienteling efforts through automation, and recently launched a “customer council,” which Metrick described as a cross- functional team focused on further improving the customer experience.
“Additionally, we have initiated a multiyear redesign of our SaksFirst loyalty program, starting with the introduction of new rewards and benefits, such as early access to sales and in- home styling sessions,” Metrick wrote.
He also listed various strategies that were accelerated in 2020, including off- hours appointments, virtual styling appointments and events, and sameday delivery. “They are now ingrained in our day- to- day operations. We continued to deliver unique virtual experiences and shopping opportunities, including offering top clients first access to the latest merchandise. Additionally, we continued the development of our personalization efforts, bolstering our clienteling with automation, as well as improving the effectiveness of our customer communications and outreach.”
The company also revamped saks. com, saw its online customer count increase by nearly 40 percent. Last month, Barneys at Saks opened on the fifth floor of the Manhattan flagship, with emerging and established designers, and rotating pop- up shops and Barneys at Saks opened as a stand- alone store in Greenwich, Conn.