The flagship Saks Fifth Avenue store in New York City is likely familiar to most Americans, who have seen the ornate shop, if not in person, then in movies and television shows that leverage its high-class image and prestigious ambiance for entertainment value. But the store looks a lot different today, as Saks works to draw new shoppers in to experience not just the luxury but also the value that it promises to offer.

Some of the changes are relatively straightforward: Rather than cosmetics, the first floor is now shifting to stocking more leather goods, while perfumes and make-up are moving to the second floor. In addition, Saks is reducing the number of dedicated brand shops within the store, such as those that previously were dedicated to Armani and Burberry, and spreading the offerings across existing departments.

But other changes are more radical. In designing the move of the cosmetics counters to the second floor, Saks had to clear out the space, threatening a situation in which an entire floor of valuable real estate would sit empty for a time. Instead, the retailer decided to get creative and install The Wellery, an experiential wellness center, on that vacant floor. The Wellery provides a range of unexpected services, such as boot camp–style exercise classes run by instructors who have served time in prison. The layout for the exercise classes, each of which cost $30, evokes a prison, with faux cinder blocks and chain link fencing.

Nearby, a section of the store is devoted to Breathe, which allows customers to sit in a booth and inhale concentrated salt vapors. The service, $25 for a 10-minute treatment, promises to detoxify people’s lungs and improve their health and relaxation. Upon leaving the booth, customers can purchase salt scrubs or blocks for their home use too, though Saks insists that The Wellery is not just about getting people to buy more.

The notion, expressed by Saks’ chief merchant, that “Selling stuff in stores is not the answer…. You have to build an emotional connection with them,” also led to the insertion of a nail salon and juice bar on the second floor. In turn, even as the renovation of the store comes to a completion, Saks promises that the wellness experience will remain available, even if the services of The Wellery spread out across the store. The juice bar, for example, is slated to be a permanent fixture on the fifth floor.

But such efforts might not be sufficient. One active investor in Saks’ parent company has called on the retailer to transform its top floor even more, into high-end residential condominiums for luxury consumers. Furthermore, it is not clear how much shoppers appreciate or value the wellness offerings and experiences. Saks has not released sales numbers, but some observers question whether people really want to sweat through a boot camp right before they go shopping for a designer gown or fancy suit.

 Discussion Questions:

1. What is Saks doing to attract customers to its stores?
2. Why is it offering these “extras”?
3. Do you believe this is a good strategy? Why or why not?

Source: David Gelles, The New York Times, August 4, 2017