Back to top

Analyst Blog

The departmental store chain of Saks Inc. , Saks Fifth Avenue, is geared to revamp its online e-commerce and has taken a step towards this goal by redesigning its website.

The fashion retailer, which also sells its products through saks.com, has renovated the site to provide convenient online browsing for its customers. The facility makes it easier for customers to choose among Saks Fifth Avenue’s seasonal trends and products.

The revamped website has popular features like large scale photography, splash and product detail pages that showcase the designers and trends from every angle. These are detailed for customers in spacious layouts, improving the product selection experience. The navigation throughout the website has also improved, which should facilitate the quick selection of favorite items.

The overhauled e-commerce capability at Saks is expected to boost sales of the company in 2013. In its recently concluded fourth quarter 2012, Saks reported flat year-over-year earnings that however, surpassed the Zacks Consensus Estimate. Results were helped by the company’s investments in omni channel initiatives and strategies coupled with efficient cost management.

The company’s omni-channel retailing enables consumers to experience shopping through all available channels, such as mobile Internet devices, computers, television, catalog and others. As a result, the company has been reporting positive comparable store sales for more than two consecutive years.

Recently, more and more retailers are resorting to e-commerce, which helps them to reach out to a larger number of customers and also take advantage of ‘showrooming.’ Moreover, results show that customers purchasing online also tend to spend more.

E-commerce made up 5.4% of total retail sales for the fourth quarter of 2012, up slightly from 5.2% in the third quarter, according to the quarterly retail trade survey by the U.S. Census Bureau. Forrester Research estimates that this share will go up to 11% by 2015.

Retail trade through smartphones and tablets grew 81% in 2012 and is expected to grow over 55% in 2013 (eMarketer Jan 2013).

Hence, we are encouraged by Saks’ initiative to boost its online sales as we feel the strategy of focusing on e-commerce is in tune with changing trends in the industry.

Saks currently holds a Zacks Rank #3 (Hold). Other stocks in the retail and wholesale sector include Macy’s Inc. (M - Analyst Report) carrying a Zacks Rank #1 (Strong Buy), and Limited Brands holding a Zacks Rank #4 (Sell).

Please login to Zacks.com or register to post a comment.