Amazon may boost Neiman merger

As Saks Fifth Avenue and Neiman Marcus merge, Amazon technology will help them grow.

At least that’s what Marc Metrick, CEO of Saks’ online operations, told Bloomberg News on Thursday (July 4). It comes a day after Saks announced it was buying its rival — which also owns Bergdorf Goodman — with Amazon and Salesforce taking minority stakes.

“How do you future-proof a brand like Saks, Neimans, Bergdorf? You do it with technology,” said Metrick, who will become CEO of the new operation, called Saks Global.

According to Bloomberg, such future-proofing involves collecting high-quality customer data, analyzing it to provide them with more personalized offers, and improving logistics to streamline the shopping experience.

“That’s where these companies can help us,” Metrick said, declining to disclose the value of the two tech companies’ shares.

As PYMNTS wrote in April, the type of personalization Metrick mentions is becoming “mainstream for retailers.”

The PYMNTS Intelligence/AWS report, “Personalized Offers Are Powerful—But Too Often Off-Base,” found that 71% of shoppers have received personalized offers and are interested in them. Another 12% have not received personalized offers but have shown interest.

The report also found that 41% of millennials would be very likely to use retailers that send them personalized offers, while 34% of Gen Z consumers feel the same way.

“Yet many efforts by retailers in this space miss the mark,” PYMNTS wrote. “Only 44% of consumers who received tailored offers said those offers were very relevant. As a result, many brands and retailers appear to be failing to truly get to know their customers.”

The $2.6 billion Saks/Neiman Marcus deal was first announced Wednesday, creating a company with annual sales expected to be about $10 billion. It follows reports last year that Neiman had rejected a $3 billion takeover offer from Saks.

The merger could help both companies address challenges facing the luxury retail industry, including by negotiating better terms with suppliers and eliminating duplicative costs.

As noted in February, luxury department store chains like Saks and Neiman Marcus are facing new challenges as luxury brands look for ways to build direct relationships with their customers.

“As these brands deepen their direct relationships with consumers, companies that have always profited from being intermediaries are facing challenges,” PYMNTS wrote earlier this week.