Saks Off 5th is rebranding, raising its profile and putting more muscle into its marketing.
“It’s an exciting time to really supercharge our growth in the digital space,” Paige Thomas, president and chief executive officer of the Saks Off 5th dot-com business, told WWD in an exclusive interview. “We are putting the customer at the center of everything we do.”
“We have this significant opportunity to appeal to a younger, fashion-minded customer and to further our market share,” added Sara Griffin, senior vice president of marketing for the luxury off-pricer.
On Monday, Saks Off 5th unveiled its 2022 spring marketing campaign and new brand tag line, “Where Fashion Takes Off.” The campaign emphasizes inclusiveness, diversity and cultivating self-expression, and sets out to modernize the image of the Saks Off 5th brand. It was shot outside Los Angeles in the desert, incorporates more vivid color than past campaigns, has an updated Saks Off 5th logo, and was developed by the in-house Off 5th creative team.
“It’s more about conveying a mind-set and less about targeting any specific ages,” Griffin said. “Today, more than ever, fashion is celebrating the individual — leaning into a world of self-expression and inclusion where you’re free to be whomever you want.”
The marketing of “Where Fashion Takes Off” includes paid social media, display advertising, website ads, email and online video podcasts, and covers both Saksoff5th.com and the 100 Saks Off 5th stores.
“We have really increased our marketing spend to increase brand awareness,” Griffin said, though she declined to disclose the marketing spend in dollars.
In June 2021, Saks Off 5th split its e-commerce and store businesses into separate companies and Insight Partners invested $200 million into Off 5th, valuing it at roughly $1 billion.
The re-engineering of Off 5th mirrored the separation of the Saks Fifth Avenue brand into separate dot-com and brick-and-mortar businesses in March 2021. With that reengineering Insight Partners invested $500 million into Saks Fifth Avenue, valuing it at $2 billion.
The Hudson’s Bay Co., parent of Saks Fifth Avenue, Saks Off 5th and Hudson’s Bay in Canada, hopes to take at least Saksfifthavenue.com public in the future, similar to how the Mytheresa luxury website went public in January 2021 and shed a lot of light on the potential value sitting in the digital operations of fashion retailers. Indeed, some shareholders have been pressuring retailers such as Macy’s and Kohl’s to spin off their dot-com businesses, though both have rejected the idea due to concerns about executing the different channels so they seem coordinated and provide seamless experiences to customers.
For Saksoff5th.com, the investment by Insight “has put us in a position to invest in things that matter for our customers,” said Thomas, citing marketing and driving brand awareness as well as customer acquisition; enhancing the app and website experiences; improving logistics and distribution to get products to customers faster, and attracting talent to the team. Those are “key areas of investment,” Thomas said. “It’s really about being able to unlock the true value of Saks Off 5th and broaden the reach.”
Thomas said Off 5th recently conducted extensive market research, reaching 5,000 fashion and luxury shoppers, both current and prospective Off 5th customers. “The goal was to understand the mind-set of how they shop for luxury and how they live. This core customer engages with brands, described shopping as a hobby, and fashion as a means of self expression. They don’t want to wear a single designer. They want to mix and match pieces, with true luxury brands like Longchamp, to mainstream brands such as Adidas.”
This year, Off 5th intends to add 300 brands to its assortment, and in the past two years added about 500, adding volume to the business, including Longchamp and Adidas as well as Brunello Cucinelli, Giuseppe Zanotti, Mansur Gavriel, Levi’s, Bally, Brooks Brothers, Skechers, Allen Edmonds, Eddie Bauer, Hush Puppies, Dr. Scholl’s and Tommy John.
Soaring inflation could drive consumers to shop value-priced retailers more often, while lingering global supply chain issues means there’s more late arriving, out-of-season merchandise that regular-priced retailers want to unload and off-pricers can pick up.
Executives said the Saksoff5th.com business is up 50 percent compared to 2020, customers are being retained “faster than ever before,” and that the customer base has increased nearly 40 percent since 2020. They also said the brand has a 50 percent customer retention rate. This summer, the company intends to release a revamped loyalty program. “We are seeing customers shopping with us more frequently, particularly online, where frequency is up 10 points to 2020,” Griffin said.
“We are targeting the customers we know we can win with. In our merchandise assortment and our marketing strategy we were too narrow. We see an opportunity to increase the pie,” in particular with a younger customer by offering more payment options and refining the app experience.
While the rebranding will cast a brighter light on the brand and reach a broader audience, “Our message is always that combination of access to luxury and value. “It’s a balance of both,” Thomas said. Since she joined Off 5th two years ago as CEO, “We made significant progress on our customer experience and merchandise assortment. Now the marketing gets to shine.”
Asked if the profile of Saks Off 5th had been too low, Thomas replied, “We have really strong awareness already. The way we think about this is, it’s about amplification.”