Saks Off 5th officially launches a shopping app on Thursday, marking another step forward in driving digital growth at the upscale offpricer.
“This is the next trigger,” said Paige Thomas, president and chief executive officer of Saks Off 5th, a division of the Hudson’s Bay Co. “Last July, we converted our web platform to Salesforce,” the cloud-based software company that provides a suite of tools to build websites and apps. Off 5th launched its mobile app with Follow Analytics.
Pre-pandemic, digital sales represented 30 percent of Off 5th’s volume, which was about $1 billion in 2019. This year, “We are tracking well above the 30 percent penetration and see the potential for 50 percent within the next three to five years,” Thomas told WWD.
While Off 5th’s stores have suffered through the pandemic, “Our digital performance has grown every month since the holiday season and we’ve seen that momentum continue as we entered 2021.”
According to Thomas, three quarters of those visiting saksoff5th.com get there via a mobile device, and data gleaned from the Saks Off 5th “customer adviser panel” shows that 30 to 40 percent already use competitors’ apps.
“As we go into the second half, I believe the Saks Off 5th app will really become a win for us in our digital business,” Thomas said. “This is a build. We’ve got a marketing push behind this. Our store associates will encourage people to use the app. We have communications plans for in the stores, and we are testing, but not ready to share the specifics yet, incentives for customers to download the app.”
The app went live in the last week of March and is available online in The Apple Store, but the marketing push commences Thursday.
The app has several user-friendly features. It enables shoppers to zoom in on products and create a wish list, and the navigation is “intuitive,” Paige said. The app also has scanning capabilities. For example, if you are in a store and see a blouse that you like but it’s not the right size, you can scan the ticket on the item to learn if the item is available at saksoff5th.com. “We will continue to invest in the app to provide additional personalization capabilities, including push notifications,” said Thomas.
She emphasized that with a shopping app, it must work well on Day One. “You have one big shot and it has to be a positive experience. Customers start to rate your app. It’s very much grounded in having a very positive experience from the get-go. We replicated our mobile web experience on the app. We are not starting from scratch. That gives us confidence we will have a strong launch and user experience because of the existing functionality that we know. You could have built it ground up, but that’s not what we did.”
The CEO also said that for four to six weeks, Off 5th tested the app with store associates and office workers. “Beta testing with our store associates that were acting like customers was a big component for us.”
Asked if creating the app was expensive, Thomas replied, “We don’t normally share those details, but whether it’s a mobile app or continued digital capabilities, we have very specific capital funding to support that, and one of our single largest capital expenditures is to support digital growth.”
The app has the same payment options as the Saks Off 5th website and stores, including Klarna, PayPal and the combined Saks Fifth Avenue/Saks Off 5th private label credit card.
Asked if the app would get higher conversion rates than the website, Thomas replied, “Yes. We would expect it to. Our best customers are going to be the first to download and engage with our app, but we still have a marketing spend for customer acquisition.”
She also suggested a younger demographic will utilize the app. “Between the app, payment options, and BOPIS (buy online, pickup in store) which we will have in the fall, there’s no question those enablers are attracting a younger demographic.”
Off 5th is in a position to capitalize on the availability of merchandise through the ill fate of other upside retailers. Century 21 Department Stores and Barneys New York recently liquidated (although Century 21 has since relaunched under its former owners); Neiman Marcus Last Call closed most of its stores and six years ago, and Loehmann’s shut down. Off 5th is the last offpricer with a comprehensive designer and luxury offering, though Bloomingdale’s The Outlet was adding locations before the outbreak of the coronavirus and Nordstrom Rack offers some designer merchandise but it’s not nearly as extensive as Off 5th’s.
Most of Off 5th’s merchandise is purchased in the market. A lesser but still significant amount of merchandise is produced for Off 5th, and a small amount of merchandise is leftovers from Saks Fifth Avenue. The app offers 30 to 70 percent off the manufacturer’s suggested retail price, just like the Off 5th stores and website. Currently, Off 5th operates 89 stores in the U.S. and 17 in Canada.
With the introduction of a shopping app, Saks Off 5th is a Johnny-come-lately in the retail world. “When I joined the Saks Off 5th organization 13 months ago, it was very clear to me we had a significant opportunity to support our digital growth,” Thomas explained. “The first priority was to convert the website to a more stable platform with the right user experience. Once that was done, there were obvious follow-ups. We are following a purposeful roadmap.”