As brick-and-mortar retailers look for new ways to remain relevant amid commerce’s digital transformation, Saks Fifth Avenue is turning its focus to automotive sales in an effort to drive both online engagement and in-store visits.
The eCommerce arm of the luxury department store chain announced Tuesday (Feb. 6) a partnership with high-end electric vehicle company Lucid, which includes digital content on Saks’s online platforms as well as in-store demo drives.
“As an iconic luxury brand and an authority in the luxury space, Saks has been able to partner with companies that we know are of interest to our customers and complement the luxury lifestyle,” Marc Metrick, CEO of Saks, said in a statement.
“With Lucid, we’re providing our customers with new, unique offerings outside of our traditional assortment, and we’re excited for them to experience this innovative offering online and in our stores for the first time,” he added.
The move for the centuries-old retail chain to expand into vehicle sales suggests that the company may be challenged to work harder for consumers’ loyalty, amid growing competition from luxury brands’ direct-to-consumer (D2C) sites and other eCommerce platforms. By offering items that many consumers continue to demand physical-world engagement with before buying, such as cars, the company has the opportunity to keep consumers coming back to its stores.
That said, electric vehicles may not be the draw they once were. Recent reports show that consumers are worried about the price, range and reliability of these vehicles, with sales of these cars having slowed last year, in spite of a combination of discounts and lower-interest deals from car companies.
Plus, even the ways consumers buy cars are changing. On Monday (Feb. 5), Mitsubishi Motors North America announced the launch of its new online retail solution, ClickShop 2.0, promising to reduce the time it takes to buy a vehicle by 70%. CarGurus recently shared that more than 70% of car shoppers want to handle more of the car buying process from home.
Findings highlighted in the August edition of the PYMNTS Retail Tracker® Series Report revealed that 67% of luxury shoppers say that stores should feature higher levels of digital integration. Additional research cited in the study showed that online sales account for up to 20% of all sales in the luxury sector.
Plus, consumers are shopping online more overall. The PYMNTS Intelligence study “Consumer Interest in an Everyday App,” created in collaboration with PayPal, revealed that, of the 61% of U.S. consumers who had shopped for a non-grocery retail product in the previous month, 72% did so via connected device at least some of the time.
Throughout department stores’ history, efforts to sell cars have yielded mixed results. According to Car and Driver, Sears sold vehicles by mail from 1908 to 1912 and again in the ‘50s, each time failing to see the profits it hoped for. Yet today, at the point where Amazon is selling cars, legacy retailers are challenged to work harder to secure shoppers’ loyalty, meeting more of their day-to-day needs or, in high-end chains such as Saks’ case, offering more kinds of luxury products and services.