Heading into the pandemic, Saks Fifth Avenue had its long-term strategy, coined “luxury disrupted,” in place.
“The first pillar is, don’t forget the fashion,” said Marc Metrick, president and chief executive officer of Saks Fifth Avenue. “That’s something some of us have done — not Saks. It’s knowing our place with the consumer.
“We are in the fashion business,” Metrick said during a Q&A with James Fallon, editorial director of WWD and Fairchild Fashion Media. “If somebody says if you sell Tylenol and toilet paper you can stay open, we are not going to win doing that. It’s about sticking to who we are and being true to the consumer.
“Luxury disrupted is also really steeped into personalization and ease. It’s all built on connectivity between our physical store and digital, the relationships, the assortment, the edit, the fashion — that’s how we are going to win. The consumer is our boss. He or she wants to engage with Saks differently, in a much more efficient way, which is where personalization comes into play.
“A lot of things you have seen us do over the years, whether it was the flagship reimagination, making our men’s business bigger, looking at our apparel footprint and tightening it. We have expanded things we saw as opportunities, whether it’s handbags or other leather goods. We were on our way with this. One thing in our business you can’t do is overreact, and say, ‘let’s just put a bunch of home exercise equipment in our store because that’s what selling now.'”
On Amazon launching its Luxury Stores platform, Metrick said, “These guys do anything. You are not going to out Amazon Amazon. We have to out Saks Amazon. We have to offer an alternative. Not the same thing but just better. It’s a fool’s errand. I’d love for Amazon to not throw their hat in the ring [with luxury], but they are and we are ready.”
During his talk, Metrick underscored the “disconnect” between when fashion is delivered to retailers and when consumers want to buy the products. Hence the need for the industry to implement a “buy-now-wear-now” approach.
“That disconnect has been there for quite some time,” he said. But the pandemic led to “an opportunistic push” by Saks to change the situation, at least for the time being, when the Saks stores reopened after being temporarily closed. “In mid-June, when it was starting to get warm, there it was — it was short sleeve. It was linen. It was silk. It was open-toe. It was everything summer.” Because Saks held back orders (and canceled some) the summery goods arrived months later than usual, but perfectly timed for when the consumer was looking to buy summer merchandise.
Sustaining the buy-now-wear-now approach “is going to take the entire industry, cradle to grave,” meaning all rungs of the product cycle, from the creative and production functions, to how and when merchandise gets delivered to stores and how stores market it to consumers, Metrick explained.
“If you put the goods out at the wrong time, the consumer passes, and by the time they want it, you already need to make room for new stuff coming behind it that the customer would also want. So you have to mark that down,” he said.
No one in the fashion industry is going to make stuff later, said Metrick. “It’s all about the sensibility, the end use of the product, making it more wear-now for when it’s delivered. Luxury has the opportunity to do that. It’s not going to be black or white. It’s going to be iterative over time. But I do believe that everyone is aligned around getting this done.
“My chief merchant, Tracy Margolies, always says to me, ‘Maybe it’s not the timing. Maybe it’s the content. Maybe it’s the wearability of the product when it comes in. Maybe we don’t change when it comes, it just becomes more wear now.'”
Metrick stuck up for Saks’ brick-and-mortar as being relevant in normal times as well as in a health crisis. He said Saks is built for social distancing, having wide aisles and spacious floors, and for clienteling, private selling and styling with consumers. “We have been doing these kinds of things for years…Selling expensive products requires touch and feel. I always thought the department store has opportunity. I never thought the department store was dying.
“We have a consumer panel that we regularly tap and it’s amazing. Everybody is interested in coming to a store. You get different answers on when they will feel safe and ready to [visit], but the physical existence of a luxury environment is always going to be here and people want to come, regardless of their age.
“Being inside our stores now is safe and people are coming in. They enjoy it. It’s escapism. I am excited to see a return to stores when we get into the next year or so.”
While Saks stores are running flat, Saks’ business overall “on a relative basis has been outstanding,” lifted by digital gains.
He said Saks spent the last five years rebuilding its matrix and product offering, and this fall launched Barneys New York “as a little spot on our web site,” through an agreement with Authentic Brands Group which owns Barneys. Saks got “lots of feedback on great product. It was amazing because that was our product. We just assorted it and put it in this micro shop.” He characterized Barneys as becoming “a sub-brand” at Saks. The Manhattan flagship’s fifth floor for contemporary sportswear and a compact Saks location in Greenwich, Conn., will be converted to Barneys at Saks formats in January.
With the pandemic, Saks’ buyers shop using NuOrder, a b-to-b e-commerce platform. “It helps us buy and assort products very differently,” Metrick said. While acknowledging the value of live fashion shows and shopping showrooms in person, the vast majority of which got canceled this year, Metrick sees advantages in shopping virtually, suggesting c-level merchandise teams get a more holistic view of the seasonal assortment as it’s evolving.
“We can see it from the eyes of the consumer,” as buys get placed. “The assortment can be better, deeper, richer, with much more balanced content. I think it’s a win.”