Saks outlets to get sloppier
Following its November acquisition by Hudson’s Bay Co., Saks plans to make its Off 5th outlet boutiques "a little more unkempt" to better connect with bargain hunters, according to a profile in The Wall Street Journal.
Plans call for a switch to apparel stacked in piles and shoes sorted by size instead of brand, a look more commonly found at off-pricers like T.J. Maxx as well as Rack Room.
"Our outlet stores look too much like department stores," said Richard Baker, chief executive of Hudson’s Bay, in an interview with the Journal. "Nordstrom Rack is a mess, and customers love it."
The change come along with plans to double the number of Off 5th locations to capitalize on the success many outlet centers are having reaching today’s spendthrift consumer. Saks currently has 71 Off 5th locations. Other luxury brands and chains, particularly Nordstrom with its Rack concept, have likewise been expanding aggressively in recent years. To improve profitability, lower priced merchandise is expected to be brought into Off 5th, including overstocked items from Lord & Taylor.
While Saks may risk tarnishing its lux reputation with its outlet initiatives, $1 billion has been set for upgrades to its 41 Saks Fifth Ave. stores in a push to emphasize a higher level of designer goods.
Some past articles have explored whether cluttered and messy stores convey value more than cleaner locations, although they didn’t focus on off-price formats from luxury stores.
A 2011 New York Times article entitled, "Stuff Piled in the Aisle? It’s There to Get You to Spend More," detailed Walmart’s switch from clean aisles to "a little bit of mess" accompanied by the dismissal or reassignment of "the top executives who came up with the cleaner-stores plan." Other examples given were Dollar General raising the height of their shelves, J.C. Penney adding wall displays and Old Navy lining their checkout lanes with impulse items.
"Historically, the more a store is packed, the more people think of it as value — just as when you walk into a store and there are fewer things on the floor, you tend to think they’re expensive," Paco Underhill, founder and chief executive of Envirosell told the Times at the time.
- Saks Reaches to Uber Luxe, Stays Mindful of the Masses – The Wall Street Journal (sub. required)
- Stuff Piled in the Aisle? It’s There to Get You to Spend More – The New York Times (tiered sub.)
- BrainTrust Query: Do Messy Stores Sell More? – RetailWire
How important is the cluttered look to the success of Nordstrom Rack? Is Saks’ Off 5th business smart to follow Nordstrom Rack’s lead in this regard?