Introduction
Saks Fifth Avenue was the brainchild of Horace Saks and Bernard Gimbel, who operated independent retail stores on New York's 34th Street at Herald Square in the early 1900s. Their dream was to construct a unique specialty store that would become synonymous with fashionable, gracious living.
On September 15, 1924, Saks Fifth Avenue became the first large retail operation to locate in what was then primarily a residential district. By offering the finest quality men's and women's fashions, as well as an extraordinary program of customer services, Saks Fifth Avenue has become the byword for taste and elegance.
The most important facts
” Since 1924, Saks Fifth Avenue has worked hard to lure shoppers into its stores. And for many years it did, delivering high-end, unique, and fashionable luxury merchandise
” The first of Saks Fifth Avenue is the merging of the Saks and Gimbel families resulted in more than just the construction of Saks Fifth Avenue. 30-year-old Adam Gimbel (Bernard's cousin) became Horace Saks' assistant. With the sudden death of Horace Saks in 1926, Adam Gimbel became President of Saks Fifth Avenue, bringing with him the imaginative foresight that has carried Saks to the zenith of its success.”
” Avenue's outlet stores were opened in Franklin Mills, Pennsylvania, in 1992 under the name Clearinghouse. The outlet division name was officially changed to Off 5th in 1995, with the decision to expand this segment of Saks Fifth Avenue.
” Most Saks stores are freestanding entities in high-profile shopping destinations or anchor stores in upscale malls
” A shopper at Saks can expect to find an array of luxury apparel, shoes, accessories, jewelry, cosmetics, and gift items.
” Saks Fifth Avenue Enterprises conducts its merchandising, sales promotion, and store operating support functions for 54 locations around the United States from corporate offices in New York City.
” Saks Fifth Avenue today is renowned for its superlative selling services and merchandise offerings. The best of European and American designers for men and women are sold throughout its 39 stores servicing customers in 22 states.
The key issue or issues:
Saks Fifth Avenue started operating as one of the first luxury retailers. Delivering high-end, fashionable merchandise.
In the past decade, and after the huge growth in the luxury retail market Saks Fifth Avenue has lost its market share and its sales to Nordstrom, Neiman Marcus.
And when trying to solve this problem management took a decision of minimizing the inventory hoping to raise their sales in order to get their financial resources back to normal. Little did they know that this decision caused another unexpected problem of customer satisfaction. In 2005 if a customer walked into the store to purchase or repurchase an item they would find that it's out of stock or sold out.
Also, they had an enormous misunderstanding of the customer buying preference around their 54 locations in the US. And in their second large source of revenue Saks web-site where shoppers were seven years younger than the typical Saks customer. ”
Specify alternative course of action
” First problem:
Losing market share
To regain market share once it has been lost.
– changing marketing mix (price, promotion)
– email the customer with a new arrival
” Second problem
Misunderstanding of customers preference
The company cannot survive without continue doing efforts to better understand customer needs, so we can reach this goal by:
– enhance its online and application capabilities
– monitoring the customer buying habits
Evaluate each course of action:
” For the first problem:
By providing sales or reducing prices the company can catch customers and higher market share but it comes at a cost — namely, lower margins per unit.
Also, it has to wait to regain market share to raise the price and get profit.
change the promotion strategy, which can include raising the advertising budget to provide offers like giving point after purchasing and when they collect cretin amount rewarding them this strategy encourage the customer to buy, delivering payment option that allows customers pay when the delivery received they will love this feature. On the other hand, it may cause lacked Seriousness.
lure the customer by sending emails which is one of the technology helps to collaboration tells them about the new arrival that waiting for them! This way will encourage customers to buy, However, some of them didn’t usually chick their emails or feel that seems disturbed
” For the second problem:
to discover if these offers to do positive effect and creating customer loyalty by creating simple email surveys, the problem with the survey when it long the customer will get bored. so, the company should notice made it short, Empathize with customers allowing them to leave comment or reviews, Designation employee to responds customer inquiries in the online website and mobile App that's can better understanding customers preference and get an accurate picture
upgrade their information system, Monitoring the sales and the customer buying habit enable company to reduce the number of sales that didn’t purchase more this will be useful but it's better when the company let the customer Expresses their desires rather than observing at silence.
How might a better understanding of customer preferences support Saks’ strategy of improving existing facilities:
Saks is planning to place more emphasis on customized marketing for individual markets. Information computer system that helps the sales staff monitor the buying habits of customers so that the staff can be more productive. Management has declared that investments in technology are necessary for the success of the company’s business and strategy, and therefore Saks will continue to upgrade its information systems with the goal of greater efficiency and productivity.
Seeking customer feedback can give SAKS a perfect image targeting customer experience of what they are offering.”Customer feedback provides you with valuable insights that would help the organization to chase what costumer exactly looking for and how they want it to be. This would help SAKS getting products that customers prefer to buy and innovate a way that for sure will exceeds expectations and keeps customers coming back for more. Online feedback for instance, will be a fast and affiance way to get into your costumer preference. Keeping the feedbacks in your data will direct employees to the right way of helping a certain costumer getting what specifically she or he wants. Listening to costumers will always make a different especially when you pay attention to their feedback and opinions.”