Everyone has heard of Mr. Stanley Marcus. The trivial story of what became known as retail. Stanley greets his customers every morning at the door of Neiman Marcus in Dallas. He knows his customers by name, knows what they want and treats them like VIPs. Mr. they showed with support. Stanley and his Neiman Marcus to give you a lifetime of loyalty.
But then Neiman Marcus was sold to Carter-Hall Hale, Mr. Stanley became emeritus and the company grew. It’s not that his special dedication to service has disappeared, but that “money” has taken over and serving the bottom line has become the ultimate goal.
For any retailer, running a business primarily through accounting is a mistake, but for a luxury retailer like Neiman Marcus, it’s the kiss of death. And that almost happened to Neiman Marcus Group in early 2020, when it was forced to file for Chapter 11 bankruptcy.
After successfully emerging from bankruptcy proceedings, CEO Geoffrey Van Riemdonk made all the tough business decisions, including closing 22 stores, the most valuable locations in NYC’s Hudson Yards.
Starting with a reduced footprint of 37 stores and 10,000 members, he had to build a company and Mr. Reviving Stanley’s customer-first philosophy in his five-point strategic plan, revolutionizing luxury experiences. NMG | The path to the transformation of the corporate culture.
Van Rymdonk and his team endured an arduous two-year journey that yielded necessary and, frankly, excellent results. In fiscal 2022, which ends in July, the company said it generated gross product of more than $5 trillion, increasing its EBITDA margin by 11% year-over-year.
Comparable store sales grew more than 30% year-over-year, generating $495 million in adjusted EBITDA. The company sees investment in technology and digital capabilities as central to its integrated luxury retail model, which combines in-store sales, e-commerce and remote sales.
Specific investments include the acquisition of Stylze to strengthen the universal customer journey and Farfetch Platform Solutions to enhance Bergdorf Goodman’s e-commerce platform.
Technology driven services
But the technology investment that may have the biggest impact on the luxury retailer is its backend Connect app, which the company’s more than 3,000 merchant partners use to connect with customers remotely.
It allows them to share style tips, product recommendations, personal lookbooks and full deals. For example, an average of 1.5 million SMS and personal emails are sent to subscribers every month.
ready to grow
This new way of personally serving customers aligns with the Growth Mindset, one of the five pillars of NMG|W’s cultural transformation. A growth mindset requires all companies to adapt, embrace change, face new challenges and find new opportunities to do better.
After nearly a decade of working with the company’s traditional sales partners, they are embracing a new, technology-enhanced way to serve customers.
“Our NMG|WOW philosophy empowers our associates to work anytime, anywhere to achieve the best results,” said Eric Severson, EVP, People and Company Owner.
The WOW Center strategy leads to greater job satisfaction, which translates into happier employees, which in turn translate into happier customers. And happy customers are loyal. The top 2% of customers make over $25,000 per year with 25+ transactions per year and account for about 40% of all sales.
They are all
Loyal “proprietary” customers, the third pillar of the NMG|Way strategy, are as valuable as employees. And this extends to the wider luxury business community. Even the most famous luxury brands want to own Neiman Marcus.
In line with the traditional values of luxury brands such as Loewe, Prada, Valentino, Burberry and Balmain, the corporate culture embraces diversity, equality and inclusion, having created exclusive collections for NMG last year. It has helped more than 200 new brands represent the new and diverse designers of the NMG family.
The fourth pillar of the NMG|Way culture is the Environmental, Social and Governance (ESG) program. The company has just released its first ESG report, entitled Our Journey to Revolutionary Impact.
Through a visionary ESG strategy, it aims to promote sustainable products and services, build a culture of its own across all constituencies, including employees, business partners, brands and customers, and lead with “love” in its community.