Colleen Taylor, president, merchant services – U.S. for American Express, moderated a keynote session at NRF 2021: Retail’s Big Show – Chapter 1 consisting of two fireside chats, “Retail’s rethink moment: Reimagining business as UNusual with Saks Fifth Avenue and lululemon.”
In the first of these conversations, Taylor spoke with Marc Metrick, president and CEO of Saks Fifth Avenue. “What are the biggest changes you’ve seen during this eventful last year,” she asked, “and how has Saks navigated the challenging times we are in?”
“For us,” Metrick said, “the pandemic has been an accelerant to change, and a key learning experience. One thing we’ve learned is that stores are still important. For luxury, especially, it’s the theater: People want to see the show.” Since Saks reopened its stores, he said, they have been performing only slightly below 2019 levels.
Learn more about the way retailers keep moving forward here.
A second lesson is that the investments Saks has been making in digital technology — a program begun well before the pandemic, Metrick emphasized — were and continue to be money well spent. “We’ve also learned a lot about product cycle,” he said. “The disconnect between when the customers want something and when it’s in the store has never made sense. We’d get pre-fall stuff, leathers and furs, in June, in places like New Orleans.”
The accidental rescheduling
But 2020 was different. Saks closed in February along with the rest of the industry, and re-opened in May. “When the customers arrived,” Metrick said, “guess what was in the stores? Summer product. It had been on the floors since February, but this was the first time they’d seen it. We didn’t have to push it or promote it. It just sold, because we were meeting the customer’s needs.”
Out of this past year’s experience, for Saks, has come what Metrick calls the “luxury disrupted” strategy. It has three components. One, don’t forget the fashion. (“We’re not a data company,” he said. “We’re not an internet company. We’re a fashion company.”) Second is ease; making it easy for the customer is essential. Third is personalization. Saks, he said, is using data both to undergird the ecommerce side and to provide the best possible in-store experience.
When asked to single out a surprising lesson learned during the pandemic, Metrick said, “I was surprised by the love our customers have for fashion. In the midst of the pandemic, we were selling things that there was no foreseeable end use for.”
Leaning in at lululemon
There has been, however, a foreseeable end use for sweatpants and yoga wear.
In the second fireside chat, Taylor spoke with Celeste Burgoyne, president, Americas and global guest innovation at lululemon. Asked how her company had gone about managing the pandemic, Burgoyne said, “We decided on three basic principles for COVID: supporting our people, leaning into our strengths and investing in the future.”
“We decided on three basic principles for COVID-19: supporting our people, leaning into our strengths and investing in the future.”
She cited the company’s early decision to close all its stores, focusing on staff health and safety. Lululemon, like Saks, also has been able to leverage the omnichannel strength derived from its investment in its digital ecosystem. (Again, like Saks, a program begun long before the outbreak of the pandemic.) As to investing in the future, in July the company announced its first acquisition, the at-home fitness platform Mirror.
One thing lululemon is known for, Taylor noted, is valuing and encouraging female leadership. Asked for an update on the company’s progress in this area, Burgoyne cited some recent examples: Lululemon has just appointed its first female CFO, Meghan Frank. The senior leadership team is now over 70 percent women and thus representative of the company, whose staffing is 75 percent female across the board.
Women now constitute a majority of the board of directors, she said, and the company has had gender pay equity since 2018. Since 2019, there has been a gender-neutral parenthood program that allows people up to six months of paid time off to welcome their biological or adopted child into the world.
Finally, Taylor asked Burgoyne for a quick assessment of the future of retail. “There’s been a real behavior shift over to digital,” she said. “That won’t go away. At the same time, stores are still really, really important. The question is, how will they change?”
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