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Shoptalk: How Listening to Consumers is Paying Off at Hudson’s Bay Company

Department stores are slowly gaining ground in the retail landscape after a massive downturn, but keeping that momentum is key to the sector’s recovery.

Helena Foulkes, CEO of the Hudson’s Bay Company, is determined to strengthen her banners by catering to customers by creating experiences that are easy and enjoyable.

In a keynote at Shoptalk, Foulkes focused on Hudson’s Bay and Saks Fifth Avenue, two brands that HBC has been able to lift out of the mire since she joined the team one year ago, but she notably skirted any discussion about Lord & Taylor, which made headlines last year when it closed its massive flagship in New York City.

Foulkes said one of the things she found surprising when she came onboard was how passionate Canadian shoppers are about Hudson’s Bay. “It’s the largest department store chain in Canada, and it’s a big part of their identity as Canadians,” Foulkes said. Still, despite the devoted fanbase, she found there were few channels for consumers to provide feedback on their experiences. So, Foulkes and the HBC team initiated feedback initiatives at all 90 Canadian stores and assessed the pain points customers raised.

The first of those pain points was the checkout line. Foulkes discovered that purchases and returns were happening at the same cashiers, and returns didn’t have a dedicated service counter. What’s more, 97 percent of returns of online purchases were actually going back to brick-and-mortar stores, which contributed to high congestion levels in the checkout/returns line.

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The HBC team tested digital return centers in a group of stores, creating a centrally-located hub for those services, which lifted their Net Promoter Score by four points across the stores. Hudson’s Bay also leveraged employees alongside the return centers to help customers making returns and exchanges find what they were looking for while still in the store.

At Saks Fifth Avenue in NYC, Foulkes faced a different problem. The New York flagship was outdated, with a cluttered handbag department along the perimeter of the ground floor, a crowded beauty department that didn’t allow consumers space to explore, and a long pathway to the bank of elevators that would take customers to higher floors. The Saks Fifth Avenue store, Foulkes said, is an example of where the “radical change” she believes in played out.

The HBC team completely rearranged the Saks Fifth Avenue layout, turning the second floor into a “beauty oasis” that was easier to navigate, used natural lighting, and generated plenty of buzz in the media. Along with rearranging the handbag department on the ground floor, the team also tripled the number of products offered and added 100 new products that were exclusive to the Saks re-opening. On top of all that, the team added a brand-new escalator right in the center of the store, so customers can more easily access the upper levels.

While all of this renovation was happening in-store, Saks also reinvigorated its digital experience. “While many of you might not think of Saks as a digital player, our digital penetration is quite high,” Foulkes said. To make the most of that penetration, Foulkes said HBC leveraged its 4,500 employees, which it has dubbed “style advisors” across Saks locations nationwide, arming them with their own online hub where they can live chat with customers and make style recommendations. The company also uses advisors’ social media to showcase their individual style and give customers inspiration for looks they can create with Saks Fifth Avenue and Saks Off Fifth products. Some in-store style advisors may also act as personal shoppers or concierges for customers.

Foulkes is optimistic about the future of department stores, and said she’s excited to find new ways for HBC to connect deeply with customers on-site and online.

“In this environment, companies that thrive are those that focus on radical change,” Foulkes said. She hopes that HBC continues to upend consumers’ and other retailers’ idea of just what a department store is capable of.