Luxury retail has learned some lessons from the coronavirus outbreak, and the disruption is helping stores such as Saks Fifth Avenue do what they do even better than before.
“Luxury retail was primed for disruption going into this crisis,” Saks president and CEO Marc Metrick said. He explained that Saks was “on a good streak” heading into the outbreak, with “positive growth in 11 out of 12 quarters.”
That winning streak was helped by having a strategy in place based on “knowing who we are” and keeping in mind that it’s a retailer in the business of selling fashion. Personalization was already a part of the mojo of Saks. Because Saks knew its place with its customers, Covid served as a means to prove right the concept of Saks’ overall strategy. “The consumer is our boss. He or she wants to engage with Saks,” Metrick said, speaking at WWD Virtual Apparel and Retail Summit last month.
According to the CEO, Saks was built for social distancing, with its array of personal services such as clienteling. “We’ve been doing this for years. [Covid] accelerated the new way we’re doing business,” he said, explaining that the retailer has accelerated its clienteling options, along with changes to store layouts and other private shopping services to help make the store a more comfortable place to shop.
“Coming into the crisis, we had 4,000 [associates] selling, now we have 3,000 selling. We’ve given them more digital tools,” Metrick said, adding that the “3,000 associates generated almost $150 million in sales during the crisis. Even with the stores closed, we were able to generate that volume.”
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Saks has benefits from other decisions made over the last few years, including a revamp of the website that included highlighting its men’s fashion offerings. Saks also has been opening men’s shoe departments in stores, which Metrick said is “now one of our best performing businesses….Footwear is a safe place to start. It’s a gateway drug to men in fashion. As more men find fashion, [shoes are] what they want.”
Metrick refers to the coronavirus pandemic as an accelerant for rapid change in the luxury space. He spoke about the disconnect in luxury between when fashion gets its deliveries and the time when the consumer either wants the product or has a need for it. Covid and its impact on delays in the supply chain helped everyone get a taste for getting product that’s season right. Metrick said one way to prevent that disconnect is to work upstream so products come in on time. “When you put goods out at the wrong time, the consumer passes. When they want it, you’re already behind for the goods that are coming in, so you markdown [the season-right merchandise],” he said.
One thing Metrick was emphatic about was the need for stores. “The flagship is our beacon for everything we do,” he said, noting that nowadays consumers can shop the flagships virtually over Zoom to get the same feel as if they were there in person.
But for Metrick, stores have another role in the intersection between fashion and luxury. Likening luxury to theater, Metrick said fashion and luxury is about the feel and touch and experience of it all. He believes in the physical presence, such as being at a fashion show to feel the energy in order to understand the creative vision of the designer.
He noted that while many people watched “Hamilton” on television this year, if given the opportunity most would probably have opted to be in a theater to experience it. That’s because some things are still meant to be touched and felt and in luxury, the physical stores are the theater, he explained.