Everybody in retail has heard the apocryphal story about how Stanley Marcus, identified to all as Mr. Stanley, would greet his prospects on the Neiman Marcus door in Dallas each morning. He knew his prospects by title, knew what they needed and handled them because the VIPs they have been. They returned the favor by giving Mr. Stanley and his Neiman Marcus retailer their lifelong loyalty.
However then Neiman Marcus was offered to Carter-Hawley Hale, Mr. Stanley went into emeritus mode and the corporate grew. It’s not that his single-minded dedication to service handed away, however the “cash males” took over and the first aim grew to become servicing the underside line.
For any retailer, operating the enterprise primarily by and for the stability sheet is a mistake, however for a luxurious retailer like Neiman Marcus, it’s the kiss of loss of life. And that just about got here for Neiman Marcus Group in early 2020 when it was compelled to file Chapter 11 chapter.
After efficiently rising from chapter proceedings, CEO Geoffroy van Raemdonck made all of the powerful enterprise selections, together with closing 22 shops, most painfully, its prized NYC Hudson Yards location.
Beginning over with a diminished footprint of 37 shops and 10,000 associates, he needed to construct the corporate again up and did it by resurrecting Mr. Stanley’s customer-first philosophy in a “Revolutionizing Luxurious Experiences” strategic plan with its cornerstone being a five-point NMG|Means company tradition transformation.
Van Raemdonck and his staff have been on a difficult two-year journey that’s producing wanted and, from an outsider’s perspective actually outstanding outcomes. Throughout fiscal 12 months 2022 ending July, the corporate reported it delivered over $5 billion in gross merchandise value with an 11% improve in EBITDA margin over earlier 12 months.
Comparable retailer gross sales superior over 30% in comparison with final 12 months’s interval, producing $495 million in adjusted EBITDA. The corporate touts investments in know-how and digital capabilities as pivotal to its built-in luxurious retail mannequin that mixes in-store, e-commerce and distant promoting.
Particular investments embody the acquisition of Stylze to energy the shoppers’ omnichannel journey and Farfetch Platform Solutions to boost its Bergdorf Goodman e-commerce platform.
However the know-how funding which may be most impactful for this luxurious retailer is its behind-the-scenes’ proprietary Join software utilized by the corporate’s 3,000+ promoting associates to have interaction their prospects remotely.
It permits them to share styling recommendation, product suggestions, personalised look books, and full transactions. For instance, a mean of 1.5 million texts and personalised emails are despatched to prospects per 30 days.
By means of Join, the non-public connection between the shoppers and the gross sales affiliate is amplified, successfully teleporting Mr. Stanley’s private customer support method to the twenty first century.
The Join instrument helps a high-level of personalised customer support that AI and bots can’t match. It extends private customer support to extra prospects and reaches past the shop’s 4 partitions to wherever the shopper is.
Poised for progress
This new approach of personally serving prospects suits into the “Development Mindset,” one of many 5 pillars of the NMG|Means tradition transformation. The expansion mindset calls on all throughout the corporate to adapt, embrace change, settle for new challenges and discover new alternatives to do higher “all the time.”
With its typical promoting associates having labored almost a decade with the corporate, they’ve embraced this new technology-enhanced approach of serving prospects.
A couple of-third of its promoting associates generate over $1 million in buyer spend per 12 months. Additional, prospects who interact throughout a number of channels, like in-store and thru distant promoting, spend 5 instances greater than those that store solely in a single channel.
New methods of working
This enhanced, service-from-anywhere method additionally helps one other NMG|Means pillar known as WOW, which means “Way Of Working.”
The NMG company construction is envisioned as a community of linked hubs that “serves its associates and their wants,” such that an affiliate might have a working hub from residence. Its shops and distribution facilities act as hubs and a brand new company hub is being in-built uptown Dallas, centrally situated between its Downtown Dallas and NorthPark flagship shops.
“Our NMG|WOW philosophy empowers our associates to work each time, nonetheless and wherever to attain their finest outcomes,” stated Eric Severson, EVP, Chief Individuals and Belonging officer.
The WOW hub technique ends in higher job satisfaction, which interprets into happier staff who then make happier prospects. And happier prospects are loyal. The highest 2% of consumers common over $25,000 yearly by way of 25+ transactions and account for about 40% of complete gross sales.
Loyal prospects “Belong,” a 3rd pillar within the NMG|Means technique, as do valued staff. And that extends to the broader luxurious enterprise group. Probably the most coveted luxurious manufacturers wish to belong to Neiman Marcus too.
Belonging means range, fairness and inclusion throughout the company tradition, which aligns with the values of legacy luxurious manufacturers, like Loewe, Prada, Valentino, Burberry and Balmain, which did unique collections for NMG this previous 12 months. It additionally has helped convey 200+ new manufacturers representing rising and various designers into the NMG household.
The fourth pillar of the NMG|Means tradition is its environmental, social and governance (ESG) program. The corporate simply launched its first ESG report, entitled “Our Journey to Revolutionize Impact.”
By means of its forward-looking ESG technique, it goals to advance sustainable services, domesticate the tradition of belonging throughout all constituencies, together with staff, enterprise companions, manufacturers and prospects, and lead with “love” in and for its communities.
The report outlines NMG’s 2025 and 2030 objectives, together with extending the lifetime of over one million luxurious gadgets by way of round providers comparable to mending, alternations, restoration, resale and donations, and rising revenues from sustainable and moral merchandise. It is going to assist prospects make these higher decisions by way of Sustainable Edits in Neiman Marcus and Bergdorf Goodman.
And central to its ESG objectives is to extend inclusion and variety in an already extremely inclusive, diverse culture.
The ultimate pillar in NMG|Means tradition is Values which is the thread that ties every part collectively. “NMG is a relationship enterprise,” stated CEO van Raemdonck and relationships are primarily based on shared values.
The values espoused encourage associates to be daring, be memorable, be reliable, be all coronary heart and be one of the best. And the values are bolstered by the NMG| WOW (Means of Working) ideas of working smarter, being current, integrating life and work and feeling empowered to be empowered.
“What’s driving demand right now is one thing particular within the service and the expertise and the story,” van Raemdonck shared. “The competitive advantage in retail is to do every part in service of the shopper.”
The NMG|Means tradition is a guiding gentle for associates to ship that “one thing particular” to prospects, in addition to to their work colleagues, the corporate’s manufacturers and enterprise companions and out into the broader group.
It codifies the NMG company tradition to make the expertise working for, working with and patronizing the corporate as distinctive because the procuring experiences are with Neiman Marcus and Bergdorf Goodman.