Luxury Retail Giant Saks Expands into Media Sector with New Network Launch

Article Brief:

Saks has launched a retail media network, which it claims is among the first to come from the luxury category, according to a press release. 

The Saks Media Networks uses data from the online retailer's shoppers and insights from 435 million website visits each year. They will start by focusing on sponsored product and on-site display ads.

A team within the company will work with advertisers to build relationships, achieve campaign objectives, and monitor performance. This initiative comes after Saks received a financial boost earlier this month.

Saks' Approach to Retail Media

Saks may have entered the retail media game later than others, but they see luxury as a new and promising market. While many established networks have advanced ad technology and cater to mass-market brands like Walmart and Amazon, Saks believes there is untapped potential in the luxury sector. Retail media has become a major player in digital advertising, with big names dominating the field.

Luxury retail has a more exclusive group of advertisers, and the few companies with retail media networks have not made a significant impact. The luxury sector has faced challenges due to inflation and global conflicts, affecting popular players like Matches Fashion and Farfetch.

Saks Fifth Avenue has also felt the effects of the downturn but recently received additional funding to support initiatives such as Saks Media Network. Pathlight Capital and Bank of America, long-time financial backers, injected funds in April to help the brand navigate the current challenges in the luxury market. In 2021, Saks was split into a separate e-commerce business while still maintaining ties to the Saks Fifth Avenue department store.

Saks Media Network’s ad formats at launch are centered on on-site display and sponsored product placements, which are typical starting points for new platforms. Some advertisers, like womenswear brand Ramy Brook, have already started using Saks Media Network.

Founder and Creative Director of Ramy Brook, Ramy Brook Sharp, expressed excitement about Saks’ Media Network as a new way to achieve their business objectives. She believes it will boost brand visibility and lead to increased traffic and revenue for Ramy Brook on Saks’ ecommerce platform.

The growth of retail media has been greatly influenced by the phasing out of third-party cookies, which have been a fundamental part of online advertising targeting. This process has been complicated with several delays. According to Advertiser Perceptions, U.S. ad spending on retail media is expected to reach $81.6 billion by 2025, accounting for almost a quarter of the total digital market. As more established platforms become saturated, growth is now shifting towards off-site programmatic inventory.

Editor's P/S:

Saks's entry into the retail media landscape marks a significant step for the luxury sector. With its vast shopper data and exclusive audience, Saks Media Networks is poised to tap into a market that has been largely overlooked by existing platforms. The emphasis on sponsored products and on-site display ads is a strategic move, offering advertisers a direct connection to Saks' discerning clientele.

The timing of Saks' launch is also noteworthy. Amidst the challenges faced by the luxury industry, the additional funding and e-commerce separation provide Saks with the stability and flexibility to explore new revenue streams. As third-party cookies continue to decline in use, retail media platforms like Saks Media Networks are becoming increasingly valuable for brands seeking to reach their target audience with precision and impact.