Latest / The Retention Marketing Podcast with Fexingo: Email, SMS, and Loyalty for Repeat Customers / How Saks Fifth Avenue Uses Personal Shopping to Retain Luxury Clients
Transcript
- Lucas: So there's this number from Saks Fifth Avenue that I keep coming back to. Customers who participate in their personal shopping program — where you get assigned a dedicated stylist — they have an 80 percent retention rate year over year. Compare that to roughly 30 percent for customers who don't use the service. That's more than double. Luna: Eighty percent is insane for luxury retail. Most brands in that space would kill for half that. Lucas: Exactly. And what's interesting is this isn't a new program. Saks has been doing personal shopping for decades, but they've layered modern CRM and data on top of it in the last few years. The stylist isn't just picking outfits — they're using purchase history, past returns, even browsing behavior on the site to curate. Luna: So it's not just a nice human touch. It's actually data-driven human touch. Lucas: Right. The stylist has a dashboard. They can see what you've bought, what you've looked at but didn't buy, what you've returned, your size preferences. And they reach out proactively — before a new season, before a trunk show, before your birthday. The relationship is the retention mechanism. Luna: How does someone get into the program? Is it invite-only or can anyone sign up? Lucas: Technically it's free and anyone can request a stylist, but the real value kicks in for what Saks calls their 'top-tier' clients — typically people spending over $5,000 a year. Those clients get a dedicated stylist who knows them by name. Some of these stylists have been with the same clients for over a decade. Luna: That must create a huge switching cost. If you leave Saks, you're not just leaving a store — you're leaving a relationship. Lucas: That's exactly the point. And the numbers bear it out. Saks has reported that personal shopping clients account for a disproportionate share of revenue — something like 30 percent of total sales come from the top 5 percent of customers, many of whom are in the program. So the ROI on that stylist salary is massive. Luna: But what about the cost? Hiring and training stylists is expensive. Can a mid-tier brand replicate this? Lucas: That's the million-dollar question. A brand like Nordstrom does something similar with their personal stylists, but they also have a huge scale. For a smaller brand, the key is to focus on your very best customers — the top 1 percent — and give them a dedicated contact. It doesn't have to be a full-time stylist. It could be a customer success person who learns their preferences and reaches out personally. Luna: I've actually seen a version of this in the DTC space. A brand called Naadam — they do cashmere — they have a 'personal shopper' option where you text a real person. But I wonder how many of those programs actually drive repeat purchases versus just being a cost center. Lucas: That's the risk. If the personal touch doesn't feel genuine, it backfires. Saks succeeds because the stylists are actually good at their jobs — they're not just scripted. They have autonomy to make decisions, like sending a gift with a purchase or offering early access to a sale. That flexibility builds trust. Luna: And trust is what drives repeat purchases in luxury. You're not just buying a handbag — you're buying the assurance that you'll be taken care of. Lucas: Precisely. And the data backs it up. Saks found that clients who receive at least three proactive outreach touches from their stylist per year have a retention rate above 90 percent. That's remarkable. Three touches — a phone call, a text, a curated email — can lock someone in for years. Luna: What do those touches look like in practice? Is it 'Hey, we just got in this new collection' or more tailored? Lucas: Very tailored. For example, if a client has bought a lot of black cocktail dresses, the stylist will text them when a new black dress arrives in their size from a brand they've purchased before. Or they'll set aside items before a trunk show and invite the client in for a private viewing. It's concierge-level service. Luna: So the CRM is really an enabler. The stylist isn't guessing — they're guided by data but deliver it personally. Lucas: Exactly. And this is where technology meets the human touch. Saks uses a clienteling platform from a company called NewStore that integrates with their POS and ecommerce. The stylist gets alerts — 'Your client just bought a navy blazer. You might want to suggest these trousers.' It's almost like a retail co-pilot. Luna: I love that. But I want to push back a little — doesn't this create a two-tier system? What about the customer who spends $1,000 a year? Do they just get ignored? Lucas: It's a fair point. Saks has a broader loyalty program called SaksFirst that gives points and early access to everyone. The personal shopping program is the top tier. But the thinking is: your most valuable customers deserve disproportionate investment because they deliver disproportionate returns. And the data shows it works — the program's net promoter score is something like 85, versus 45 for the average luxury retailer. Luna: That's a huge gap. So the bet is that the high-touch experience creates evangelists who bring in friends. Lucas: Yes. And Saks measures that too — referred customers from personal shopping clients have a 70 percent retention rate in their first year. So the program doesn't just retain the individual; it retains their network. Luna: That's the flywheel effect in luxury. I'm curious — are there any brands outside of high fashion that have tried this model successfully? Lucas: Absolutely. In home furnishings, there's a brand called Mitchell Gold + Bob Williams that does something similar with design consultants. In beauty, Trish McEvoy offers a 'personal color and skincare consultation' with a dedicated beauty advisor. The core principle is the same: assign a human who knows the customer's history and preferences, and give them the tools to act on that knowledge. Luna: So the lesson here isn't 'hire a bunch of stylists.' It's 'identify your highest-value customers and give them one person who cares.' Lucas: That's it exactly. And you can start small. Even a small brand could have the founder or a key employee text their top 20 customers personally. The technology just makes it scalable. But the relationship is the real retention driver. Luna: And if these marketing conversations have sparked something you've actually used or thought about trying, it's worth mentioning that listener support is what keeps this show ad-free and focused on exactly these kinds of deep dives. Lucas: Yeah, it's a small but meaningful thing. A couple of dollars a month genuinely makes a difference — buy me a coffee dot com slash fexingo, if you've gotten value from the episodes. Luna: It helps us keep bringing in the data and cases like this one. So thank you to anyone who's supported that. Lucas: Alright — back to Saks. One last number that sticks with me: the average personal shopping client spends four times more per year than the average Saks customer. Four times. That's the power of making someone feel seen. Luna: And that's the retention play that no automated email can fully replace. Lucas: Exactly. The blend of data and human judgment — that's the sweet spot. So if you're building a retention strategy, ask yourself: who are the customers who would benefit from a real person paying attention? And then give that person the tools to do it well.