The MBS Group

Andrew Jennings, COO and President Saks Fifth Avenue, New York
In discussion with Richard Fletcher, City Editor The Sunday Times

Mon September 26, 2005 | The Soho Hotel, London

In late September 2005, Moira Benigson Executive Search invites a select group of 50 or so Chief Executives from the worlds of luxury goods and retail to hear Andrew Jennings, President of Saks Fifth Avenue, being interviewed by Richard Fletcher, City Editor of The Sunday Times at the Soho Hotel in London.

Despite having flown in from New York the day before, Andrew is his usual ebullient, charming self. Then again, having arrived at Saks via senior roles in Canada, the UK and South Africa, he is used to collecting air miles. Andrew is positively effervescing with enthusiasm about the recent, hugely successful launch of ‘Wild about Cashmere’ a one-of-a-kind event showcasing the luxury fibre in Saks. It’s just the type of national promotion that demonstrates Andrew’s passion for taking retailing to the next level through exceptional, in-store experiences.

“In this great war in global retailing, there is one force alone that will decide who wins and who loses – the customer.”

Before the evening starts there is an air of anticipation as leaders in their field look forward to hearing from and being challenged by one of the standard-bearers of modern luxury retail. They are not to be disappointed. Beginning with a short presentation on the future of global retailing, Andrew makes a strikingly stark assessment of the global retail landscape:

“I believe that in this great war in global retailing there is one force alone that will decide who wins and who loses – the customer. The retail revolution that we’ve experienced over the past decade shows no sign of abatement. We’re seeing competition escalating. We’re seeing significant investment by retailers to enhance the customer’s overall shopping experience through upgrading facilities, renovations, the introduction of more diversified product offerings, more unique offerings and more comprehensive branding overviews and exercises. It’s no longer a question of whether a company can afford to do it – it’s whether they can afford not to do it.”

Andrew continues: “I believe that customers want everything – everything their way, depending on their need, their mood, their aspirations and, of course, their time available. We are seeing a further polarization in the marketplace: we need to recognize and accept the fact that customers are comfortable matching a Chanel jacket with a garment from H&M. They are equally happy shopping at Matalan as they are at Harvey Nichols.”

“I believe businesses must become 3- dimensional – different, distinctive and deliver”

What should winning retailers focus on, Andrew asks: “Number one, differentiation. Number two, creating meaningful customer relationships. And thirdly, and unbelievably importantly, winning the war for talent in our industry. I believe businesses must become 3-dimensional – different, distinctive and deliver. The message, I think is clear – stand out and stand apart – or otherwise, you will fall away and become one of the also-rans in the great race we are facing in the market place.”

“It’s no wonder that traditional department stores, who have had the same formula and who are focused on what I call the “mushy middle”, are at greatest risk are becoming irrelevant and with an unsustainable formula. Attracting a customer is one thing; developing meaningful customer relationships is quite another part of the formula."

“We need to turn each customer into a client. Then we want to build a relationship with that customer, so we develop them into a friend of Saks Fifth Avenue, so we can nurture a one-on-one relationship with them. Ultimately, we need to put the building blocks in place necessary – via personal shopping services, private consultations, one-on-one introductions, tickets to shows, concierge assistance and notes on anniversaries – to transform customers into clients, clients into friends, and friends into brand ambassadors of Saks Fifth Avenue. It’s a kind of evangelical enthusiasm that iPod owners have for Apple or Mini Cooper owners have for BMW. The winning retailers in 2005 and beyond will be the ones who understand that loyalty is earned, not purchased.”

When asked about Saks’ approach to hiring people for the shop floor, Andrew is clear: “It starts with attitude of the staff. Everyone in the organisation is responsible to be a recruiter. I see myself as a Chief Recruitment Officer. My wife is always fascinated when we go out to dinner; I always chat to young women on the staff – men too of course – and she often says: ‘Oh, you’re at it again!’. But what she actually means is I am talking to them, particularly if I’ve had good service. I’ve recruited six associates for Saks in the last twelve months. Two of them will be over $2M books and neither of them had ever been in retail before.”

After fielding questions from Anya Hindmarch on product differentation and Casey Gorman from Lulu Guinness on superbrand boutiques, Rose Marie Bravo praises Andrew’s ability to create a wonderful camaraderie on the sales floor. “I think you are doing a great job and you are a brave person!”, she enthuses. Modest as ever, Andrew says it’s all down to one thing – teamwork. “Teamwork is so important. No one person can whistle a symphony, and you’ve hired a marvellous orchestra, Rose Marie.” On that note, we head into the night – challenged yet inspired.

“We want to transform customers into clients, clients into friends, and friends into brand ambassadors of Saks”

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