TORONTO — Luxury retailers who view shopping as merely a transactional experience are in for a rude awakening, according to Saks Fifth Avenue president Marc Metrick.
“In the last year or so we’ve been trying to understand what makes today’s luxury customers tick. Things have changed a lot, even from just two or three years ago, because for the first time the consumer is ahead of us retailers,” Metrick told attendees at Store 2016, the annual two-day conference hosted here by the Retail Council of Canada.
After months of speculation, Saks, which is owned by Hudson’s Bay Co. Inc., opened its doors in Toronto last February. On Tuesday, Saks revealed it will open a third Canadian location in 2018 in Calgary.
“Since we arrived in Canada we’ve been very pleased with the way consumers have come to us at Saks and stayed with us,” Metrick told WWD. “Our research told us that the market here was ready for us and ready for upheaval. But entering Canada gave us a lot to consider in terms of what is relevant to today’s luxury consumer.”
Indeed, the three years spent planning the launch helped spawn a new strategy for the company, one that Metrick now calls “the new luxury.”
According to the Saks executive, today’s new luxury elevates the ordinary or the mundane to a higher and more emotionally meaningful level for consumers. While exclusivity, top quality and great design are still part of this equation, Metrick views Starbucks as the embodiment of new luxury.
“Starbucks took an inexpensive commodity like coffee and turned it into an aspirational product,” he said. “So when I go to Starbucks I don’t get a coffee. I get a Vente Bold Black Eye and pay $4.50 for it because a barista is serving it to me and the drink is uniquely mine. That’s meaningful to me.”
This kind of personalized sales model holds huge potential in the realm of luxury retail, according to Metrick. “Today’s new luxury is all about creating an experience for shoppers and an emotional connection with them. It’s about newness, ease, immediacy and personalization of service. But new luxury is for everyone,” said Metrick.
Thanks to the influence of social media, today’s new luxury is egalitarian and does not judge where fashion trends come from, according to Metrick.
“New luxury is interested in what’s great, hot and what’s new. But it’s also about greater authenticity and quicker access to goods. There’s no denying that fast fashion and the rise of fashion as entertainment have changed what new luxury means to today’s consumer,” he said.
To illustrate that point, Metrick recounted one incident that occurred in Saks’ Beverly Hills store. A sales associate told Metrick about a customer who only wore clothes from one designer. When a new shipment of goods arrived in store the associate contacted the client. But when the client saw the merchandise, she said, “This is old. Don’t you have something new?”
Though the tale was “somewhat disturbing,” as Metrick explained, it illustrated just how important new technology has become in luxury retail, as has a taste for the unexpected.
For example, Saks’ New York store recently opened a yoga studio on its fifth floor. “I took a class there last week,” said Metrick.
Moving forward, Saks will continue to integrate such novel new strategies into its U.S. and Canadian stores to foster a heightened emotional connection with consumers. The retailer will also push towards “whispering luxury” rather than screaming it at consumers with its move towards a sleeker, light-filled store design.
“In today’s world of new luxury, standing out and taking risks is critical,” said Metrick. “New luxury pushes the envelope of personalized service by marrying it with data and analytics. But the real challenge is in connecting all the dots. That stakes for making these connections have never been higher.
“We are not there yet at Saks, but we’re making progress. But in today’s world the customer is telling us what she wants. The retailer no longer is setting the terms of engagement. That’s a seismic shift in the industry,” he added.