For fashion retailers, “buy-now, wear-now” has been the holy grail of merchandising. But at Saks Fifth Avenue, the time for changing the product cycle has arrived.
Saks merchants, moving to implement changes to the product cycle beyond those imposed by the pandemic, have been in discussions with vendors to closely align the arrival of new seasonal product to its stores with consumer demand. The talks have been with 20 key brands in particular, including Brunello Cucinelli, Burberry, Proenza Schouler and Stella McCartney. So a fall cashmere turtleneck could be introduced in September instead of June; boots arrive close to cold months, and sandals arrive around spring.
“It’s a matter of what we can do now, through this health crisis, to accelerate the transformation of Saks Fifth Avenue,” Marc Metrick, the president of Saks, told WWD in an interview.
“Where does Saks want to be in 2025 or 2028? There are a lot of things we can do differently now that would have otherwise taken us a lot of time to correct. We want to be the leaders in luxury with how we market to the customer, with what our product flow is like, and with what we sell to people as we come out of this.”
Saks wants to lead so others follow. “We need this to be an industrywide thing. We are going to lead it, but everyone has a certain level of responsibility in the market,” said Metrick. “It doesn’t work if the consumer is seeing different products at different times. It’s got to be something that changes [throughout] the industry.”
“How we align products coming in with the seasons is something we have been thinking about for a really long time,” added Tracy Margolies, Saks’ chief merchant. “Specifically, we are evaluating the product delivery flow. We have seen a lot of contemporary brands react to it, shipping more monthly. But this is something to work with going forward with all brands,” of which there are about 2,000 sold in the store.
For years, the industry has thrashed out the buy-now, wear-now philosophy without embracing it. A few designers made stabs at it, but backed off within a season or two.
Saks executives, however, believe they’re making progress on that front, indicating that in the second quarter — May, June and July — there won’t be as much fall product on the shelves to the degree seen in past years. “Pre-fall and fall merchandise will be received later than they have in previous years,” Margolies said. “For example, historically we would start to receive pre-fall as early as April with most arriving by July. In the new model, we will receive pre-fall later with 50 percent received by July and the remaining 50 percent arriving in August. Fall will be received during the months of August, September and October.”
The reset for 2020 is due to the pandemic, with stores being temporarily closed now, spring merchandise backed up, and uncertainties as to what degree consumers resume shopping for fashion. But the plan is for permanency.
“The current situation has afforded Saks with an opportunity to reset the product lifecycle to better align with customer preferences, which is for more focus on buy-now, wear-now,” said Metrick. “Better seasonal alignment of merchandise receipts will solve what has been an ongoing challenge for customers, brands and retailers. It’s what Rahm Emanuel said, ‘you never let a serious crisis go to waste.’ But I would never say there is a silver lining in this horrible health situation.”
Saks Fifth Avenue’s business showed some slowing before the coronavirus spread, and there has been some question about the success of certain flagship renovations, specifically relocating beauty to the second level. Saks executives have said renovations have at least met expectations, though some cosmetic sources have said otherwise.
Regarding current business through the luxury chain, executives said there have been upticks in certain categories of merchandise during the pandemic, notably women’s casual and loungewear, men’s, beauty and home. Executives cited Aviator Nation, Monrow, ATM and Agolde in casual and loungewear; and John Elliott, Amiri and Fear of God in men’s.
Trends seen now could play bigger into the future, and some heavy lifting across much of the assortment is contemplated so Saks can be relevant in a post-pandemic society. Among the possibilities cited by Saks executives: smaller deliveries that could come more frequently for constant newness; more “season-less” styles that can be worn from one season to another, and reconfiguring the balance of casual, wear-to-work and evening merchandise to meet lifestyle changes, like work at home. Online shopping, where Saks isn’t a frontrunner but has seen growth, is an opportunity as well. With more investment, saks.com could eventually represent a greater proportion of the total sales. Saks declined comment on the proportion.
“We have to continue to watch and see where the demands go,” Margolies said. “We have to wait and see how the office-workplace environment comes back. What do big galas and events look like in a year or so from now? There is already a big demand for fashion casual. We have to wait and see how that evolves. But we will continue to be who we are to our customers, something special, emotionally connected. That’s what is not going to change.”
With buy-now, wear-now, “Brand partners have been extremely receptive,” she said. “We are working with vendors and spending a lot of time on conference calls. It’s all about collaboration and looking at different ways to do things.
“There is a whole lot of work that needs to be done on the brand side to make it digestible,” added Metrick. “The whole content needs to be adjusted.”
For the Saks initiative to take hold, brands and suppliers would have to change their design, production and delivery schedules, and other retailers have to be ready on the receiving end. The initiative would get an enormous lift, in terms of coordinating with other retailers, if Saks’ owner Richard Baker, executive chairman of Hudson’s Bay Co., is successful in buying the Neiman Marcus Group. It’s no secret that he is eager to take over NMG and is pursuing a deal.
Metrick didn’t mince words discussing how the product cycle is out of whack. “We’ve been shipping heavy sweaters and leather pants to Boca Raton in June when it’s 115 degrees outside. When you think about it, we just weren’t lined up with customer demand.”
The mismatch forces markdowns to move the merchandise, and by Labor Day, when the demand gets stronger, stockout arise, disappointing customers. Under the new approach, “Tracy is taking these deliveries and putting them more in front of the consumer when they want it. This helps the consumer, helps the retailer and it helps the brand. It maximizes the full price life of a product,” Metrick said.
Saks decided to temporarily close its Manhattan flagship on March 17 and the rest of the chain a day later. Asked how Saks is going to orchestrate the reopening of its stores once the coronavirus subsides, Metrick said, “It’s going to be very iterative.” He said the organization has strategies and plans for “the now, the re-entry and the next normal.”
“We need to think about the Saks experience, how are customers going to want to shop, how are they going to come into the store right from the entry point? The fire department allows 11,000 people into the Saks flagship at once. On an average day throughout the year we have about 5,000 people in the store all through the day. It’s not going to be one of those problems where people are afraid to come,” due to social distancing concerns. “Saks is not a traffic store. It’s a conversion store,” meaning compared to other big retail boxes, Saks gets fewer people in the store on a daily basis, but they’re bigger spenders.
Regarding wearing masks and other protective gear, “We’ll abide by all of the guidelines of the medical professionals. Our stylists, associates and customers need to feel safe.”
He sees new shopping experiences for Saks into the next normal. “We can imagine shopping by appointment in the off hours of the store,” when it’s closed. “Who wouldn’t want to shop when there are 11 people in a 600,000-square-foot space?”
With people getting more comfortable living a digital life in the next normal, Saks could feature shopping via Zoom, where shoppers from their computer devices at home meet up live with a stylist who is in the store ready to show them around and help them shop. “It’s a combination of the physical and virtual,” Metrick observed. It allows you to shop from the convenience and safety of your home and be assisted by a stylist physically present in the store, Metrick said, adding, “It’s a new way of shopping.”
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