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Amazon and Salesforce take minority stakes in Saks Global as they expand luxury e-commerce efforts

In the news: It’s no secret that the department store model has been in need of a revival, but is the merger of Saks Fifth Avenue and Neiman Marcus the answer to decades of strain on brick-and-mortar shopping? 

Marc Metrick, CEO of Saks Fifth Avenue’s online operations believes so. “How do you future-proof a brand like Saks or Neimans or Bergdorf? You do that through technology,” he said in an interview with Bloomberg. 

The Saks-Neiman deal will result in a new entity called Saks Global in which Amazon and Salesforce will have minority stakes. With Amazon and Salesforce on board, the company hopes to expand Saks Global’s online business with more insightful customer data that will allow the retailer to offer customers better-personalized online options and improve logistics to make it easier for consumers to shop.

Although Saks Global will have greater scale and transformative potential, the department store model has various cracks that need to be fixed: 

• Online shopping has conditioned shoppers to shop by price and to compare deals, rather than shopping by brand loyalty to one retailer.
• The rigid format of physical stores has kept sales floors visually unchanged for decades.
• Selections of luxury goods have dwindled as brands like LVMH, Kerig and Prada focus more on selling directly to customers rather than sourcing merchandise to multi-brand retailers.

Amazon’s involvement in the Saks-Neiman merger could help tackle some of these obstacles. The luxury e-commerce market has struggled with heavy discounts and distribution costs, so this may be the perfect opportunity for Saks Global to reconceptualize the online luxury shopping experience.

Research analysis: Glossy’s 2024 analysis of CMO strategies across retail media networks found greater adoption of retail media this year, including new retail media platforms that popped up from specialty retailers like Saks Fifth Avenue.

In April, Saks launched the Saks Media Network, one of the first retail media networks in the luxury retail space according to the company’s press release. The platform’s purpose is to create more digital advertising opportunities for brand partners, according to Saks. “With the launch of our Saks Media Network, we are expanding our offerings for brand partners by helping their products reach the right luxury customers when and where they are actively looking to purchase,” said Kristin Maa, svp of growth at Saks, in a written statement. 

With the acquisition of Neiman Marcus, Saks Media Network can expand into Neiman Marcus and Bergdorf Goodman’s digital spaces. And data from Amazon and Salesforce will likely make this an attractive platform for brand partners looking for more targeted customer data. According to Maa, several prominent brands that sell through Saks are already using the Saks Media Network:

• David Yurman
• Chanel Beauty
• Dolce & Gabbana Beauty and Fragrance
• Ramy Brook
• Stuart Weitzman 
• Rag & Bone