Saks has launched the Saks Media Network, a digital advertising platform aimed at increasing the retailer's revenue and website traffic and giving participating suppliers greater exposure and shopper insight.
Saks officially launched its media network on Tuesday, opening it up to the industry after a two-month beta test involving only a limited number of vendors. Brands that have placed sponsored ads on the Saks Media Network to date include David Yurman, Chanel Beauty, Dolce & Gabbana Beauty and Fragrance, Akris Punto, Ramy Brook, Stuart Weitzman, Amiri, Rag & Bone and Assouline.
More from WWD"In the test we invited a small group of brands that we knew would be interested and who had talked to us about it early on. We wanted to understand how they would perform on the site and how we could optimize campaigns before fully launching them across all our brands," Kristin Maa, Saks Senior Vice President, Growth, told WWD.
"It's still early days, so we're still learning, but I think this could be quite significant in terms of what we can generate," Maa said when asked about the network's revenue potential. "This is also new for many of our partners. We have spent a significant amount of time with our brands helping them understand how the media network works and how to best use it. So it still feels early."
To date and during the test period, "more than 30 brands have participated across all our categories, and some have participated in multiple campaigns," Maa said. "They have continued to restart because they see success. But we launch new brands every week."
Retail media networks are a relatively new phenomenon in the industry, although the number of companies operating them has grown, 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 a significant amount of advertising revenue.
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Through the Saks Media Network, designers and brands place sponsored product ads and display banners on the Saks.com website and Saks app. Saks indicated that it attracts more than 435 million visits to its online channels annually.
"With the launch of our Saks Media Network," said Maa, "Saks is helping its brand partners' products reach the right luxury customers, where and when they are actively looking to purchase. The Saks Media Network is the next step in leveraging our data-driven insights and industry expertise to improve the customer experience." She added that the program includes a personalization element so that specific ads are targeted to specific customers.
"We haven't had the opportunity in the past for brands to work with us to place ads in a specific space in the world [online] customer-shopping journey," such as on homepages, product pages and editorial pages, Maa said. "We've worked with brands in a traditional co-op capacity, on paid social media advertising or sending emails to customers, but actually on-site was something we had limited ability to do," until we launched the media network.
When asked how brands are charged for participating in the media network, Maa said: "It's like the way Google Ads works," with brands setting budgets and targets for return on ad spend. Saks' ad tech partner, Criteo, helps determine costs for suppliers. It's a cost-per-click model.
When asked if joining the Saks Media Network means suppliers will reduce their advertising of Saks through other channels, such as paid social media and catalogs, Maa said: "Not necessarily, although it may depend on how a brand thinks about its budget. But we see brands using this as an additional opportunity. We've talked to jewelry and gift brands that said, 'Okay, Valentine's Day is coming. How can we boost sales just before Valentine's Day?' This could be something we can help leverage. We can quickly set up something that can have an impact in strengthening their brand and their sales during that Valentine's Day period."
When asked to what extent Saks controls the look of the ads in its media network, Maa said: "We work with the brands and involve our creative team in how the display ads look." Sponsored ads do not involve creative design from Saks, which Maa says allows Saks to launch a campaign very quickly. Ads that are sponsored are clearly identified as such and appear more prominently online.
"One of the things brands love about the media network is that we can provide fairly robust reporting once the campaigns are over," says Maa. "We can give them a complete picture of how customers interact, whether they buy or not."
Saks.com has faced a challenging macro environment for fashion sales and has reportedly deferred certain payments to suppliers while working 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, as WWD reported. More specifically, Saks has expanded its term loan facility with Pathlight, bringing total borrowings under the facility to $215 million, reflecting what the company described as "low debt levels relative to the size of our business." Saks also has the potential to access an additional $20 million in the future once certain conditions are met.
In May 2021, Saks.com closed on 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 earlier, Saks Fifth Avenue was redesigned by its parent company, HBC, with a new business model, an equity partner and a stronger balance sheet, splitting the Saks Fifth Avenue store fleet and Saks.com into separate companies. Insight Partners, a venture capital and private equity firm, made a $500 million minority investment in Saks' e-commerce business, which was valued at $2 billion at the time.
As previously reported in WWD, Macy's Inc. in recent years, running a media network for the Macy's and Bloomingdale's divisions, and earlier this year named Michael Krans vice president of Macy's Media Network. In 2023, Macy's Media Network generated $155 million in revenue, or 0.7 percent of total revenue of $23.1 billion. In 2022, Macy's Media Network generated $144 million.
Shop Premium Outlets, the outlet company of Simon Property Group, recently jumped on the retail media network bandwagon through a partnership with Mirakl, a retail technology company specializing in marketplace platforms. The Shop Premium Outlets site launches targeted advertising powered by artificial intelligence.
Saks said in a statement unveiling its media network: "Saks' strategic internal media team uses tailored strategies to help brand partners drive business by matching their specific goals with opportunities to achieve them, supported by comprehensive reporting and insights. Saks cultivates deep relationships with high-end luxury consumers at scale, and the launch of the Saks Media Network provides the opportunity to connect with this customer segment with a broader group of partners."
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