After a bankruptcy filing amid a pandemic, Neiman Marcus Group, the luxury US section store owner, is making a $500 cardinal stake that investing successful exertion tin crook it around.
Neiman Marcus plans to walk the sum during the adjacent 3 years on caller tech, updating its stores and speeding up transportation times. Bob Kupbens, Neiman Marcus Group’s caller EVP and main merchandise and exertion officer, who joined successful February and had antecedently worked with Apple and Ebay, is leading the investment. He volition beryllium moving with the e-commerce team, the “Connect” app and the innovation team, wherever experimental projects crossed some Neiman and Bergdorf Goodman are planned.
“People emotion Neiman Marcus,” Kupbens says successful an interview. “So how can we make an adjacent deeper affectional connection? Our selling associates do that truthful good each day, truthful however bash we put successful exertion that enables them to do that much — and past bring a deepening of people's perceived worth and integration with the brand?”
Technology to amended idiosyncratic relationships with customers is key, making services specified arsenic recommendations, one-to-one communications and store visits better, faster and much scalable. Crucially, it’s the top clientele who are acceptable to benefit. The extremity is what the institution calls “integrated luxury retail”, which translates to personalised services for a small subset of customers, says Kupbens; 40 per cent of the retailer’s business is from customers who walk much than $10,000 a year, and about 35 per cent of the group’s revenues comes from the retailer’s credit cardholders.
$500 cardinal is simply a considerable investment, underscoring the enactment that the US section store has to bash to make up for mislaid time, catching up with changed lawsuit behaviours and a new retail environment. Neiman Marcus Group, which consists of Neiman Marcus, Bergdorf Goodman, Neiman Marcus Last Call and Horchow, has been done a challenging period, and has been operating nether a “crushing magnitude of debt” for the past 5 years, notes Mark Cohen, manager of retail studies at Columbia University's Business School. In May 2020, the group filed for bankruptcy, citing the pandemic arsenic the catalyst. It cancelled $4 billion of its much than $5 cardinal indebtedness by restructuring and giving power to creditors. It permanently closed astir of its off-price Last Call stores and its caller Hudson Bay store, and is present successful the process of reopening its 43 Neiman Marcus stores and 2 Bergdorf Goodman stores.
During the pandemic, luxury department stores successful the US — aft years of playing a important relation successful brand distribution strategies — gave up crushed to online aboriginal adopters and to brands that recovered DTC channels offered much power and higher margins. For Neiman Marcus Group to successfully retrieve successful an situation that finds department stores facing accrued contention requires “a ruthless absorption connected stores and customer work (which includes delivery)”, Cohen says. “You person to ask yourself: ‘What are they susceptible of present and wherever bash they person to spell to beryllium as world people arsenic their customers expect them to be?’”
“You bash it through a transportation to a existent person,” Krupbens says, adding that digital information tin assistance pass recommendations for caller categories, brands, events or services that hopefully deepen that idiosyncratic relationship. “I don't think that successful luxury, anybody's truly solved that. What you spot is different folks vacate the abstraction — immoderate folks who are leaning much toward axenic play oregon leaning more toward mass. This abstraction of what's genuinely differentiated — integrated retail, luxury focused, unsocial experiences — is simply a spot that we tin really win.”
Building out NM Connect
Neiman Marcus’s tech concern volition shingle retired successful the signifier of gathering tools internally arsenic good arsenic acquisitions and partnerships with tech providers.
In June, NMG announced it was acquiring Stylyze, a bundle institution that uses machine learning to marque outfit recommendations based connected what customers have looked astatine oregon purchased. Neiman Marcus has worked with the institution since 2018, and integrated it into NM Connect, the proprietary instrumentality introduced 2 years ago that associates usage to pass with customers. Through NM Connect, Stylyze tin ingest Neiman’s assortment to assistance income associates make looks for customers. Two months aft the exertion was rolled retired to astir 5,000 associates, it resulted in $60 cardinal successful incremental sales, in addition to gross from NeimanMarcus.com. Neiman Marcus was utilizing the technology “so aggressively”, Kupbens says, that it made consciousness to bring Stylyze in-house. Since the motorboat of Connect, the institution says associates have completed much than 5,000,000 “engagement sessions” and placed hundreds of thousands of orders connected the platform.
Source - https://www.voguebusiness.com/technology/inside-neiman-marcuss-dollar500-million-tech-investment