Saks Fifth Avenue is getting deeper into AI.
The luxury retailer has partnered with two tech companies, NLX and Amazon Web Services, to provide an AI-powered virtual voice assistant for conversations with customers.
Shoppers can call Saks and ask “Sophie,” the virtual assistant, questions about the status of orders and returns, details on their gift cards, store assistance, price match policy and other subjects.
There is also an optional texting component, so if Sophie requests your order number or zip code, you can submit a text with the information, or continue to speak to the virtual assistant. With some tasks, such as changing a password or an address, it’s not necessarily practical over a voice-only interface, particularly if a customer does not speak clearly enough. NLX has patented its dual virtual voice and text exchange capability.
Saks Fifth Avenue customers also still have the option to request a human assistant.
Such virtual voice technologies are widely used by banks, tech firms, health care organizations and 411 directory assistance, but not so much by retailers, with a few exceptions such as Amazon and Walmart. Saks Fifth Avenue implemented the NLX technology in April but just decided to publicize it after piloting it on a limited basis to remove any kinks before fully rolling it out. With the NLX proprietary no-code platform and with the help of Amazon Web Services, Saks built, tested and analyzed voice-first, generative AI-powered conversations in a matter of weeks without needing to tap IT resources.
In the future, Saks could enable its virtual voice assistant to respond to a wider set of questions including inquiries on private label credit cards, or to help customers asking for suggestions when they are searching for merchandise. Other possibilities are extending the technology so customers can converse in languages other than English, and extending the technology to Neiman Marcus, Bergdorf Goodman and Saks Off 5th, which along with Saks Fifth Avenue, are part of Saks Global.
“In a nutshell, NLX enables anyone from individuals to very large organizations to build and deploy these conversational applications,” said Andrei Papancea, chief executive officer of NLX, which specializes in conversational AI with a platform for building and managing chat, voice and multimodal applications at scale. “So if you’re a brand like Saks, or United or Toyota which are also our customers, and you want to provide your end customers with the ability to talk to your brand in this free-form natural way, the NLX platform allows you to build such applications.” Comcast and United Airlines are also NLX clients.
Amazon also provides the critical infrastructure for operating this technology through its cloud services business unit, Papancea said. NLX stands for natural language experiences, which in technology refers to interactions between humans and computers involving everyday language, not technical inputs. “Saks Fifth Avenue understands that its customers expect excellence in everything, and their post-purchase service experiences are no exception,” Papancea said.
“At its core, luxury is personal. By thoughtfully integrating advanced technology like NLX, we are not replacing the human touch, we are enhancing it,” said Jessica Bengtzen, vice president of service centers for Saks Global, who listed several advantages to using the NLX technology. She said it “deflects high-volume inquiries and provide immediate support with no wait times, and improves the customer experience with intuitive, conversational self-service. These time savings scale to measurable gains in workforce efficiency, service speed and bottom-line performance, all while increasing customer satisfaction and driving loyalty.”
Bengtzen also indicated that by redeploying some of the workforce, service improves “across all facets of the customer journey.” Basically, it reduces agent call volume for routine inquiries, enabling them to focus on complex customer needs and prioritize more meaningful customer interactions.
So far, the voice technology has decreased agent call volume by about 20 percent, Saks said. “We are pleased with the early results and positive customer adoption,” said Bengtzen. “If this momentum continues, we anticipate deploying more broadly across our Saks Global brands.”
AI technology can also lead to a reduction in headcount and costs. Asked if the implementation of the virtual voice system has led to, or could lead to some headcount reduction, Bengtzen replied, “With this technology, our intention is to enhance our teams’ capabilities, enabling them to work smarter. By automating routine tasks, we’re empowering our teams to focus on higher-value interactions that require human judgment, creativity and care.”
As previously reported, Saks Global is seeking to reduce annual expenses by approximately $600 million through consolidations and cutbacks. Saks is navigating a tough business climate marked by a global slowdown in consumer luxury spending which is complicated by Saks’ efforts to repair relations with vendors and catch up on hundreds of millions of dollars in unpaid bills. Some vendors have recently been made whole, others not as of yet.
Saks Global, considered the largest multibrand luxury retailer in the world, operates 70 full-line luxury store locations, additional off-price locations and five e-commerce websites. Aside from its latest tech innovation with NLX, the group also uses AI for personalizing marketing communications to customers through its websites and mobile apps involving suggesting products they might be interested based on past preferences on styles and brands, as well as for sales data, and other purposes. Saks has a history working with Salesforce, which uses AI for predictive analytics, personalization and customer relationship management, as well as Amazon, which uses AI for Alexa. In April, Saks Fifth Avenue launched on Amazon’s Luxury Stores platform with a storefront. Both Amazon and Salesforce provided financial support for Saks Global’s $2.7 billion acquisition of the Neiman Marcus Group in December 2024. Two apparel industry giants also invested in Saks Global’s purchase of NMG, the Authentic Brands Group and G-III.
Saks’ technology initiatives are integral to the agenda at the Saks Global to “reset” the luxury customer experience, as the company’s chief executive officer Marc Metrick has said. The agenda centers around intensifying personalization and bolstering customer service, and involve several operational aspects and integrations, such as inventory sharing between Saks and Neiman’s which is currently being tested in one market, enriched data, deeper customer insights and smoother interactions with consumers, and utilizing AI to a greater degree.
Thinking of AI innovations for the future, Papancea said: “Saks Fifth Avenue could roll out, if they were interested, an ‘AI personal shopper.’ You go and be like, Hey, I’m going to a gala at the Met in two weeks. Here’s the theme. What should I wear? And then it won’t just come back to you with like textual descriptions. It will give you product recommendations, add them to your cart if you accept, and be able to even check out and pay in that conversational experience. That would also be leveraging unique capabilities from NLX.”
Asked if some customers believe they are conversing with a real human versus a virtual voice, Papanceo replied, “What we recommend to customers is they don’t misrepresent that they’re talking to a real person like they should say, Hey, I’m the Saks AI assistant. My name is Sophie. I’m here to assist you or to take you to a customer support agent. That’s our recommendation to brands.”