Neiman Marcus proves that the culture of change is a luxury relationship business


Everyone in retail has heard the apocryphal story about how Stanley Marcus, known as Mr. Stanley, greets customers at the door of Neiman Marcus in Dallas every morning. He knows his customers by name, knows what they want and treats them like a VIP. They returned the favor by giving Mr. Stanley and Neiman Marcus their lifelong loyalty.

But then Neiman Marcus was sold to Carter-Hawley Hale, Mr. Stanley went into emeritus mode, and the company grew. Gone was the single-minded commitment to service, but the “money men” took over and the main goal became delivering the finish line.

It’s wrong for any retailer to run its business primarily on the balance sheet, but for a luxury retailer like Neiman Marcus, it’s the kiss of death. And that came for Neiman Marcus Group when it was forced to file for Chapter 11 bankruptcy in early 2020.

After successfully emerging from bankruptcy proceedings, CEO Geoffrey van Ramdonk made all the tough business decisions, including closing 22 stores.

Starting with a reduced footprint of 37 stores and 10,000 associates, he had to build the company and built Mr. Stanley’s customer-first philosophy into the cornerstone of the five-point strategic plan, “Revolutionizing the Luxury Experience.” NMG|The Way to Change Corporate Culture.

Van Ramdonk and his team have been on a challenging two-year journey that is producing truly remarkable results, both from an important and an external perspective. In the year At the end of July for the 2022 fiscal year, the company reported more than $5 billion in gross merchandise value and an 11 percent increase in EBITDA margin compared to last year.

Comparable store sales grew more than 30% compared to last year, producing adjusted EBITDA of $495 million. The company also makes investments in technology and digital capabilities for an integrated luxury retail model that combines in-store, e-commerce and remote sales.

Some of the investments include the acquisition of Stylze to enhance the customer’s omnichannel journey and Farfetch platform solutions for Bergdorf Goodman’s e-commerce platform.

Service supported by technology

But perhaps the most valuable technology investment for this luxury retailer is a behind-the-scenes proprietary communication app that the company’s 3,000+ sales associates use to engage customers remotely.

It allows them to complete styling tips, product recommendations, personalized lookbooks and shopping. For example, an average of 1.5 million texts and personal emails are sent to customers per month.

With Connect, the personal connection between customers and the sales associate has expanded, effectively teleporting Mr. Stanley’s personal customer service approach into the 21st century.

The communication tool supports a high level of personalized customer service that AI and bots cannot match. It extends personal customer service to more customers and reaches beyond the four walls of the store where the customer is.

Prepared for development

This way of personally serving new customers aligns with the “growth mindset,” one of the five pillars of NMG|Road Culture Change. A growth mindset requires everyone in the company to adapt, embrace change, accept new challenges and find new opportunities to “always” do better.

Along with their regular sales associates who have been working with the company for almost a decade, they have embraced this new technology-enhanced way of serving customers.

More than one-third of its sales associates generate more than $1 million in customer spend annually. Additionally, customers who engage in multiple channels, such as in-store and remote sales, are five times more likely to shop through one channel alone.

New ways of working

This enhanced, from-anywhere-service-approach supports another NMG|road pillar called WOW, which means “Way to Work”.

NMG’s corporate structure is envisioned as a network of interconnected centers that “serve its affiliates and their needs,” such an affiliate may have a home-based center. Its stores and distribution centers serve as a hub, and a new corporate center is being built in downtown Dallas between the Central Dallas and Northpark flagship stores.

“Our NMG|WOW philosophy empowers our partners to work anytime, anywhere to achieve their best results,” said Eric Severson, EVP, Chief People and Assets Officer.

The WOW hub strategy results in greater job satisfaction, which translates into happier employees and happier customers. And happy customers are loyal. The top 2% of customers average over $25,000 per year in 25+ transactions and account for 40% of total sales.

It’s all.

Loyal customers “have” the third pillar of the NMG|Way Strategy, as valued employees. And this extends to the wider luxury business community. The most coveted luxury brands want to be Neiman Marcus.

Being stands for diversity, equity and inclusion in the corporate culture, which is in line with the values ​​of legacy luxury brands such as Loewe, Prada, Valentino, Burberry and Balmain, who made exclusive collections for NMG last year. It has also helped bring 200+ new brands into the NMG family, representing emerging and diverse designers.

The impact of ESG

The fourth is the NMG|Road Culture Environmental, Social and Governance (ESG) program. The company released its first ESG report titled “Our Journey to Impact Change.”

With its forward-looking ESG strategy, it aims to promote sustainable products and services, foster a culture of ownership in all constituencies, including employees, business partners, brands and customers, and lead in and with “love” in its communities.

The report outlines NMG’s 2025 and 2030 goals, including extending the life of more than one million luxury items through refurbishing, alternative, restoration, resale and donation, and increasing revenue from sustainable and ethical products. Neiman Marcus and Bergdorf Goodman help customers make these better choices through sustainable edits.

And central to its ESG goals is promoting inclusion and diversity in an already highly inclusive, diverse culture.

Common values

The final pillar is the NMG|Street Culture Values ​​which is the thread that ties everything together. According to CEO Van Ramdonk, “NMG is a relationship business” and relationships are based on shared values.

Projected values ​​encourage partners to be bold, memorable, trustworthy, wholehearted, and excellent. and the values ​​in NMG | Reinforced WOW principles of working smart, being present, integrating life and work, and feeling empowered.

“It’s something special about the service and the experience and the history that drives interest today,” Van Ramdonk said. “Competitive advantage in retail is to do everything for the customer.”

NMG|Street Culture is a guiding light for partners to bring that “something special” to customers, as well as to their colleagues, company brands and business partners, and out into the wider community.

As a shopping experience with Neiman Marcus and Bergdorf Goodman, he develops NMG’s corporate culture by working with, working with, and supporting the company.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *