Saks has launched Saks Media Network, a digital advertising platform to increase the retailer’s revenues and site traffic and provide participating merchants with increased visibility and shopper insights.
Saks officially launched its media network on Tuesday, opening it up to the industry after a two-month beta test in which only a limited number of suppliers participated. Brands that have placed sponsored ads on Saks Media Network so far include David Yurman, Chanel Beauty, Dolce & Gabbana Beauty and Fragrance, Akris Punto, Ramy Brook, Stuart Weitzman, Amiri, Rag & Bone and Assouline.
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“Testing was where we invited a small subset of brands that we knew would be interested and had talked to us about it beforehand,” Saks senior vice president of growth Kristin Maa told WWD. and we wanted to understand how we could optimize campaigns.”
When asked about the revenue potential of the network, Maa said, “It’s very early days, so we’re still learning, but I think it could be pretty significant in terms of what we can produce.” “This is also new for many of our partners. We spend a significant amount of time with our brands helping them understand how the media network works and how they can make the most of it. So it seems like it’s still early.”
To date and throughout the testing period, “More than 30 brands have participated across all our categories, and some have participated in multiple campaigns,” Maa said. “They kept rising again because they saw the success. But we are launching new brands on a weekly basis.”
Retail media networks are a relatively new phenomenon in the industry; but the number of companies taking on these networks is growing, including Ulta, Macy’s, Bloomingdale’s, Nordstrom, Tanger Outlets and Simon Property Group’s Shop Premium Outlets. Two of the largest are operated by Walmart and Amazon, which generate significant revenue from advertising.
Designers and brands place sponsored product ads and banners on the Saks.com website and Saks app through the Saks Media Network. Saks stated that its online channels receive over 435 million visitors annually.
Maa said: “With the launch of our Saks Media Network, Saks is helping its brand partners’ products reach the right luxury customers when and where they actively want to buy. The Saks Media Network is the next step in leveraging our data-driven insights and industry expertise to enhance the customer experience.” ” He added that there is an element of personalization in the program, so certain ads are targeted to specific customers.
“In the past, we haven’t had the opportunity for brands to work with us on placing ads in a specific area. [online] “customer shopping journey” such as home pages, product pages and editorial pages, Maa said. “We worked with brands in a traditional collaboration capacity, paid social media ads or emailing customers, but we were limited in our ability to actually do it on site,” until the media launch. network.
“It’s like the way Google Ads works,” Maa said when asked how brands are compensated for participating in the media network; Brands set budgets and targets for return on ad spend. Criteo, Saks’ ad tech partner, helps determine the cost to sellers. It is a cost per click model.
When asked if joining the Saks Media Network means sellers will be able to reduce advertising with Saks through other venues like paid social media and catalogs, Maa replied: “Not necessarily, but it may vary depending on how a brand feels about its budget. But brands will be able to increase that.” We see it as an opportunity. We talked to jewelry and gift brands who said, ‘Okay, Valentine’s Day is approaching’, how can we accelerate sales just before Valentine’s Day?’ “That might be something we can help leverage, we can very quickly set up something that could have an impact on increasing their brand and sales during the Valentine’s Day period.”
When asked to what extent Saks determines the look of ads on its media network, Maa said, “We partner with brands and have our creative team involved in how display ads look.” The sponsored ads do not feature Saks’ creative design, which Maa says allowed Saks to launch the campaign very quickly. Sponsored ads are clearly stated and displayed more prominently online.
“One of the things that brands love about the media network is that we can provide pretty robust reporting when campaigns are over,” Maa said. “We can give them a full view of how customers are engaging, whether they buy or not.”
Saks.com is reportedly dealing with a challenging macro environment for fashion sales and is delaying some payments to sellers as it tries to improve its liquidity position. A week ago, Saks secured up to $60 million in incremental liquidity capital from a syndicate of lenders led by Pathlight and Bank of America, WWD reported. Specifically, Saks expanded its term loan facility with Pathlight, bringing total borrowings under the facility to $215 million; This reflects what the company describes as “low debt levels relative to the size of our business.” Saks also has the potential to raise an additional $20 million in the future if certain conditions are met.
In May 2021, Saks.com closed a $350 million syndicated, asset-based five-year revolving credit facility arranged by Bank of America and a $115 million senior secured term loan arranged by Pathlight. About two months ago, Saks Fifth Avenue was redesigned by its parent company, HBC, with a new business model, equity partner and a stronger balance sheet, and the Saks Fifth Avenue store fleet and Saks.com were split into separate companies. Insight Partners, a venture capital and private equity firm, made a $500 million minority equity investment in the Saks e-commerce business, valuing it at $2 billion at the time.
As previously reported on WWD, Macy’s Inc. has operated a media network for Macy’s and Bloomingdale’s divisions for the past several years, and earlier this year Michael Krans was appointed vice president of Macy’s Media Network. In 2023, sales of Macy’s Media Network accounted for $155 million, or 0.7 percent of total sales of $23.1 billion. In 2022, Macy’s Media Network generated $144 million in revenue.
Shop Premium Outlets, Simon Property Group’s outlet business, recently joined the retail media network’s bandwagon through a partnership with Mirakl, a retail technology firm specializing in marketplace platforms. Shop Premium Outlets site publishes targeted ads powered by artificial intelligence.
“Saks’ strategic in-house media team leverages customized strategies to help brand partners drive their business, matching specific goals supported by comprehensive reporting and insights with opportunities to achieve those goals,” Saks said in a statement announcing the media network. “Saks maintains deep relationships with high-value luxury consumers at scale, and the launch of the Saks Media Network provides the opportunity to reach a broader group of partners with this customer segment.”
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