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01/21/2021

Saks and Lululemon Reimagine Retail

Jamie Grill-Goodman
Senior Editor
Jamie Grill-Goodman profile picture

Luxury department store Saks Fifth Avenue and athletic apparel retailer lululemon have reimagined the retail experience in the most unusual of times.

To share how their companies think differently and met the immense challenges this year brought, Marc Metrick, president and CEO of Saks Fifth Avenue, and Celeste Burgoyne, president, Americas and global guest innovation for lululemon, met with Colleen Taylor of American Express in back-to-back fireside chats at NRF 2021.

Metrick kicked off, noting that the retailer’s digital business really started to fire after stores reopened.

“Through the peak of the pandemic, our stylists in our stores have generated nearly $150 million in revenue though technology, through being able to use our websites to fulfill our customers’ needs before the stores were open and even after they were open and folks didn’t want to come in,” he said.

“The pandemic to us was an accelerant to change,” he continued, noting the consumer was already moving in this direction, which is why Saks was so prepared to meet their needs.

“We call it the next normal at Saks. It’s not the new normal, it’s the next normal, because it’s going to be ever-changing.”
Marc Metrick, president and CEO of Saks Fifth Avenue
Colleen Taylor, president, merchant services, U.S., American Express, and Marc Metrick, president and CEO of Saks Fifth Avenue.

“We call it the next normal at Saks,” he said. “It’s not the new normal, it’s the next normal, because it’s going to be ever-changing.”

The retailer replatformed Saks.com in October, but, in a theme RIS keeps hearing form retailers, Metrick said it wasn’t because of the pandemic and store closings.

“We were a year-and-a-half into this replatforming activity with Salesforce. Digital advancements are there.”

The company focuses on three pillars to move it forward: Don’t forget the fashion, ease, and personalization.

Luxury retail once owned personalization, Metrick pointed out, but, over time, data became the greatest equalizer and almost everyone was able to personalize things more.

“So we’re taking it a step further,” he said, “and we’re actually building technology to be able to connect our in-store experience with online experience using data to really give the customer the best possible experience when they came into the store.”

When Taylor asked Metrick about Saks' approach to dealing with change and innovation, he replied "innovation for me starts with people." It starts with culture -- making people feel comfortable with presenting ideas.

“We have to create an environment where people can raise their hand and say ‘hey I have an idea,’ and you need to break down some of the silos, a lot of the levels, and invite people to think about the business in a different way."

When Taylor asked how do you do that virtually, Metrick said he started having open brainstorming sessions or “office hours” where groups could come talk and bounce ideas around. Then with Zoom, he said virtual helped, not suppressed this. Now he gets 300-400 people coming to these sessions. They just start talking, not raising hands, since that doesn't work virtually. He also noted that executives would never schedule a meeting to say to people ‘you did great.’ Instead you’d do that in the hallway. So these sessions provide a chance to give employees positive feedback virtually as well.

“Feedback is such an important way to motivate a team, so we have to find new ways to do it all the time,” he said.

Next, Burgoyne sat down to talk about the resilience of lululemon’s own team.

“COVID has shifted the world in some ways and really has allowed us to take advantage of all the investment we made in our digital ecosystem and really leaning into our omnichannel strengths," Burgoyne began. "So that has been one area we have really pushed into, really leveraging physical and digital. And we were set up to do so, due to the last three years of investments.”

Looking to the future, lululemon is pushing into in-home fitness platform provider Mirror, which the retailer acquired last year.

Looking back at the holiday period Burgoyne observed it was a different holiday than luluemon has seen before. During the holiday, the retailer was able to serve buy-online-pickup-in-store (BOPIS) in a two-hour committed window. A virtual waitlist allowed shoppers to no longer need to physically wait in line, but instead be notified by text when it was their turn to enter the store. Seasonal popup stores were big this holiday as well; the company opened 106.

Additionally, lululemon leaned into a digital education program that was designed to assist shoppers who would rather engage online.

“Digital educator is a fun innovation the team created,” she said. It allows lululemon to leverage store educators in video chat online.

“It allows us to have our educators to be at the center of that store and digital experience,” she explained. “On Black Friday alone we had over 4,000 live video appointments with our educators.”

“On Black Friday alone we had over 4,000 live video appointments with our educators.”
Celeste Burgoyne, president, Americas and global guest innovation for lululemon

Departing from technology talk, Taylor asked about luluemon’s progress with diversity and inclusion. Burgoyne happily reported that with the recent appointment of its first female CFO, Meghan Frank, the company now has over 70% women on its leadership team. The board of directors is also now made up of 55% women. Additionally, the company launched equal gender pay and a gender neutral parenthood program of six months off for birth or adoption of a child.