History of Saks Fifth Avenue and Marketing

¶ … business founded in 1867 by Andrew Saks became Saks Fifth Avenue, one of the world's top luxury department stores, in 1924. Since then, the Saks brand has been associated with top quality fashion and design. It is now owned by Canadian firm Hudson Bay Company, which acquired Saks for the tune of $2.4 billion. While the decision to purchase the Saks department store and also that of competitor Lord & Taylor might have seemed "plucky" to some, the decision reflects current consumer shopping trends in that department stores can be valuable anchors for the brand (Klara, 2014). Online shopping through branded digital stores supplements but does not take the place of traditional browsing in brick-and-mortar establishments.

The world of fashion and merchandising has dramatically changed since Saks Fifth Avenue first set up shop in New York City. Emerging markets throughout the world are paying attention to the luxury sector, and Saks has done its best to make inroads around the world. Saks already has two stores open in Mexico City, as well as stores in wealthy Gulf nations like Bahrain, Saudi Arabia, and the United Arab Emirates ("Saks Fifth Avenue," n.d.). Its purchase by Hudson's Bay heralds a new era for the iconic department store chain. One of the ways Saks' top leaders are working to boost the brand is by differentiating itself further from its outlet store, Off Fifth. By channeling $1 billion into the flagship Saks stores and increasing the range of elite luxury goods including "$48,000 bags and $1,500 shoes," while ensuring the Off Fifth brands are correspondingly "devamped," (Bryant, 2014). This means that Saks wants to establish itself as a global luxury department store offering top elite brands, positioning itself well.

The current CMO is Mark Briggs, and he and current President Marigay McKee both hailed from Harrods, the mainstay British department store. When asked about Saks' new direction under the Hudson's Bay umbrella, Briggs claims that the classic name and "heritage" of the Saks brand will be combined with "something different and fresh," (cited by Klara, 2014). Displays are being renovated, lighting is being improved, and generally the presentation is going to be richer and flashier throughout Saks stores. The new Saks merchandise is set to be presented in a format like a "coffee table book" than a catalog, reflecting the direction of the store as being firmly and fully committed to the luxury sector. Saks has always been a well-curated department store, but under its new leadership, both the online and brick-and-mortar stores will be edited to reflect its new global sensibilities. One of the ways Saks is set to establish itself as a leading luxury provider is through the new personal shopping service (Klara, 2014). The personal shopping service and other service-oriented elements of Saks' new approach allow the elite consumer to minimize time spent shopping while maximizing the value of their spending.

Even while Saks appeals more to the elite luxury sector, the CMO and other leaders in the organization are working to please the more mid-range sector by offering incentives such as a SAKSFIRST loyalty card. Customers earn points and special benefits, and those benefits increase with "more substantial purchases," allowing Saks to distinguish between their more elite clientele and those in the mid-range sector (Loeb, 2013). Moreover, Saks is not only investing in improvements to its elite lines and in-store presentations. The company is also expanding Off Fifth stores and merchandise. Currently, there are more Off Fifth locations than there are Saks Fifth Avenue locations. This shows that Saks has developed a clear and cogent marketing strategy that allows the company to segregate its Off Fifth and budget-conscious consumers from its Saks Fifth Avenue clientele. Moreover, "Saks is growing nationally and internationally through strong Internet sales," (Loeb, 2013). An interview with Tong Yue, digital merchandiser for Saks Fifth Avenue, illustrates the strategy for the company's online presence.

Tong graduated with Bachelor of Science in marketing from the University of Pittsburgh and went on to receive a Master of Science in Integrated Marketing from NYU. Saks was a natural fit for her taste, style, and experience. Prior to working with Saks, Tong completed a series of internships every semester when she was attending university including an ecommerce internship at Alexander Wang, a purchasing/buying internship at Emilio Pucci, a marketing internship at Proenza Schouler, and an internship in wholesale management at Thakoon. For the past seven months, Tong has been the digital merchandise assistant at Saks.

As a digital merchandiser, Tong works with a diverse team. She works especially closely with the store's buyers, as well as the merchandise operations specialists to ensure that the products available are accurately represented and displayed on time for seasonal shopping. Tong also works closely with Saks' fashion studio to maintain the integrity of the online shopping aesthetic. The brands she works with regularly include top lines from classic fashion houses Dolce & Gabbana, Valentino, Fendi, and Gucci. As an entry-level digital merchandiser, Tong does not yet travel with her job but will need to in the near future.

Because Saks carries hundreds of brands across multiple categories, business for her concentrates on buying. Even the Saks Fifth Avenue house brand is purchasing oriented, as there are no in-house designers or product developers. Instead, Saks places its name on products purchased from reliable vendors. Furthermore, Tong notes that the buyers and planners work side by side to determine the amount to buy each season. Purchasing decisions depend on the percentage of each business, historical selling data, and of course, budget. Although Tong does not participate in quality control testing herself, the Saks team does work constantly to maintain the integrity of the brand. Tong does her part by ensuring all website information is fully accurate. Troubleshooting is a critical component of Tong's work as a digital merchandiser. One of the issues Tong may have to contend with are the end-of-season markdowns on items that did not sell well, and the need to transfer merchandise from one platform or store to another.