Saks Focuses on Better Customer Experience
By George Anderson
Saks Fifth Avenue chief executive Fred Wilson is hoping to reinvigorate the upscale department store chain with “better informed staff, more risk-taking in buying, less cluttered stores and, most importantly, a better customer experience,” according to a Financial Times report.
Mr. Wilson is looking to change the attitude and language of his business. “An old luxury department store is a store. Our vision is an intimate service relationship,” he said. “Old is selling – new is consulting.”
Saks’ customers, said the retailer’s chief, are looking for “friendly luxury” not “arrogant luxury.”
Moderator’s Comment: Do you agree with Fred Wilson’s vision for the new Saks Fifth Avenue? What will it take to make this vision a reality?
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George Anderson – Moderator
Hmmmm, sounds like Mr. Wilson is describing … Neiman Marcus!
I would tend to agree with this strategy as it takes the upscale department store to a space that most have abandoned – great customer service on the floor. So many of today’s so called upscale department stores are self-service showcases with little or no service, even when it comes to finding an associate to pay for the goods. Nordstrom is an example of the exception, albeit at the ultra higher end of the range. Saks may hit a home run if they pull this off the right way and their associates really connect with their shoppers. One thing for sure is that it will take some serious investment in training in order for the staff to pull this off.
This appears to me to be a tactical response to the Federated/May merger. While that group is scrambling to formulate a new strategy and calm consumer fears over rumored changes in their local stores, Saks is hitting them where they’re weakest — customer service and the in-store experience.
Saks touted their customer service for several years, and got a lot of good press in 2002 on their “CRM initiatives”. Reality did not match their press. I think they’re recognizing that, and that’s a good thing. Now the question remains: can they execute?
(Disclosure: Teradata, the division of NCR that is supplying Saks with data warehouse and customer management solutions, is a client of RAM Communications.)
Bill Franks, the company’s CIO, is working closely with the merchandising and store operations executives to make the vision a reality. By using enterprise-wide data warehousing and CRM solutions, along with the retailer’s extensive market research and loyalty programs, including the Saks First CRM division, Saks is enhancing the way shopping preferences in all segments of the market are defined. The technology is also instrumental in helping to create new ways of addressing the top priorities and desires of Saks customers.
A good example of how the new Saks enhances the customer engagement process starts as a shopper enters a Saks location. The shopper is recognized by a sales associate, who enters the person’s Saks First details into a computer. The information then flows instantly back to the Saks CRM division, which matches the customer to a series of offers the marketing department has developed for this category of shopper with the goal of moving her or him up to a higher level of shopper. The offers, which may include a free manicure or complimentary valet parking, are transmitted back to sales associate, who communicates them to the shopper.
This is going on today, and shoppers are spending more of their fashion dollar at Saks as a result.
Again, the most important piece of a successful business is being focused on the retailer’s shopper. Saks goes a step further, whether a duplication of a competitor, or not, and states it’s strategy.
Would be nice for other retailers to focus, the right way, on their shoppers as well. Hmmm