Saks Fifth Avenue is planning to make its Off 5th outlet stores appeal to the bargain hunters more by looking “a little more unkempt.” This will include stacking apparel in piles and stacking shoes by size rather than brand. Both of these are common practices at discount stores like Rack Room and T.J. Maxx. Currently the chain feels that its outlet stores look more like department stores rather than true outlet stores. Saks compares Off 5th to Nordstrom’s outlet stores (Nordstrom Rack); Nordstrom Racks are more of a mess and consumers love the thrill of the hunt. Retail analysts agree that the more a store is packed with merchandise, the more customers think of the store as a value store.
In addition, Saks plans to double the number of Off 5th locations to capitalize on the success of outlet chains. Currently, Saks has 71 Off 5th locations. Saks will also add to Off 5th’s assortment with more lower priced items and overstocked items from Lord & Taylor stores.
Saks is also investing over $1 billion in its 41 Saks Fifth Avenue locations to push higher-priced luxury and designer items in these locations.
Discussion Questions:
1. Why is Saks outlet stores changing the way it displays merchandise?
2. Do you believe this change is a good one?