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Serving Customers of Diverse Retailers from One Digital Base

June 18, 2014



Michael Burgess
President of HBC Digital
Hudson's Bay Co.

In January 2014, Hudson’s Bay centralized digital for all of its department store brands to grow online and offline business. Michael Burgess, past head of Saks Direct, is now president of HBC Digital. He spoke with eMarketer’s Christine Bittar about the efficiencies of combining the various digital brands, ecommerce and digital technology. Hudson’s Bay Company is the parent company of HB Outlets, Saks Fifth Avenue, Saks Fifth Avenue OFF 5TH and Lord & Taylor.

Michael Burgess: I’m running the ecommerce business for all of our retail brands. My team includes digital marketing, technology, creative studios and related functions for all of our retail banners. We want [the stores’ brand image to be reflected online]. In doing that, I need to have close relationships with the presidents of each retail banner.

Operationally, the stores have consolidated the planning that encompasses the actual store and ecommerce. I have digital planners on those teams managing inventory for each ecommerce business.

“While the ecommerce piece of retail today is significant and a huge growth engine, the total impact of digital on the retail enterprise now makes up majority of retail sales. It’s having a massive impact on the entire business.”

eMarketer: What are the advantages of one digital unit vs. the previous organizations?

Burgess: I think this is more efficient because we’re able to leverage [online] scale. Another benefit comes from the ability to share talent and best practices across all of the retail banners. The businesses are at different levels of scale and evolution, so we can share expertise. For example, when I led Saks digital, last year we took our outlet business online in only six months.

eMarketer: How do you feel about the way consumers are using the store and online channels?

Burgess: The majority of consumers are crossing channels and using multiple devices ... whether they start by opening something on mobile and then concluding the purchase either on a tablet, desktop or in the store, or just researching online and transacting in the store.

So while the ecommerce piece of retail today is significant and a huge growth engine, the total impact of digital on the retail enterprise now makes up majority of retail sales. It’s having a massive impact on the entire business, which is due to a significant and quick shift of consumers moving the shopping process to mobile devices. They had already been researching online [on desktops] years ago, and that change continues—particularly with apparel.

eMarketer: Why is it happening now more rapidly in apparel than in other segments of retailing?

Burgess: Certain segments of retail were easier to migrate to the web, like electronics, books and video games ... those products are pretty much the same regardless of where the purchase is made, which made buying online easier. Those industries are a few years ahead in terms of their consumers’ online purchase and research behavior.

“In general, the videos in particular are important to the brand and shopping experience and [in the case of Saks] help convey that we are a fashion authority.”

That’s changing for apparel, and consumers are more comfortable buying apparel online—the quality of the online experience is dramatically better, we have runway videos, better images and ability to zoom in and get an accurate picture of the look of the fabric. The industry has evolved, our sites has evolved and the customer has evolved.

eMarketer: Tell me about the improved images and the use of video. How long ago was it that consumers were able to see improved visuals?

Burgess: That happened last year. We made the images much larger and shifted to high definition. Images can now be expanded across the whole computer or tablet screen, and there’s also zoom. It’s incredibly detailed and clear today and it’s certainly making the shopping experience a lot easier.

eMarketer: Nicer pictures are terrific, but on a practical level, can you tell if that’s made an impact on sales?

Burgess: It’s hard to truly measure the impact, but customer feedback we’ve gotten through surveys is very positive. We’ve received comments from, “Videos help get a better understanding of the fabric and movement of the dress” to “The best shopping site for clothing ... the runway videos are fabulous.”

In general, the videos in particular are important to the brand and shopping experience and [in the case of Saks] help convey that we are a fashion authority.

eMarketer: You had referred to last year’s quick launch of the online version of the Saks OFF 5TH stores. Describe some of what you did differently for SaksOff5th.com vs. SaksFifthAvenue.com.

Burgess: Our intention was for each site to be quite distinctive so that the promotional message and value on the outlet site would be more prominent. In general, SaksFifthAvenue.com is about this year’s fashions: it’s luxury, it’s full price and SaksOff5th.com is value and treasure hunting for what can be found at a great value.

The creative is somewhat different for SaksOff5th.com, for example, in that we don’t have runway videos and we use headless model shots. That was a conscious decision to be appropriate to the brand. Still, it’s a very elevated experience, which we think is important and consistent with the Saks brand in general, but it’s differentiated to be truly appropriate to that retail banner.

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