In 2012, Scott Emmons launched iLab, Neiman Marcus’s in-house innovation lab, intended to evaluate and integrate progressive technologies across the retailer’s operations. Now, following his recent resignation from the company, he’s calling out luxury retail for impeding its own evolution.
“The day-to-day was always the priority for [Neiman Marcus], and the innovation project never came first,” Emmons told Glossy at NRF’s annual Retail’s Big Show conference. “I was not given a budget or a team to go out and make things happen.”
While operating as a team of one, he said he was able to pull off a handful of launches he was proud of only through vendor partnerships and volunteers through other areas of the business. Among the in-store technologies he got off the ground were Memory Mirrors allowing customers to try-on clothing, eyewear and makeup through augmented reality and share videos of their looks. There were also digital lookbooks, IoT communicators for store associates, smartphone charging stations and fitting room technology. Largely, those featuring brands were possible because the included companies, receiving customer data in return, helped foot the bill.
Emmons said Neiman Marcus’s constant emphasis on building all things in-house, rather than allowing for open innovation in the form of strategically finding and teaming with technology partners, is the wrong approach. It’s a traditional mindset that’s common among luxury brands.
“That’s what clouds the picture of all their innovation projects to quickly,” he said. “It’s why the projects seem to have a phoenix-like, meteoric rise and then dissipate quickly; they’re all short-lived. My six-year-old program was considered an older program in the space, but as far as I was concerned, it was still in its infancy.”
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In 2015, four years after launch, Nordstrom killed its innovation lab, dispersing included staffers to other areas of the company, and Yoox Net-a-Porter’s Tech Hub only launched in July 2017. Beauty retailers, including Sephora, have also begun to hype new innovation-dedicated teams in the last four years.
Last February, Neiman Marcus brought on a new CEO, former Ralph Lauren executive Geoffroy van Raemdonck, following Karen Katz’s retirement. Sarah Miller, the company’s chief information officer since 2016 and Emmons’ one-time boss, said van Raemdonck’s implemented a new, companywide strategy more based on cultivating relationships with customers, particularly younger shoppers who’ve proven to be less brand-loyal.
That C-suite shakeup was Emmons’ signal to leave: Until then, he said, there were roadblocks to everything from funding to coordinating efforts across the company, but he had built relationships and trust to somewhat curb them. Those were lost, and projects were proving more difficult.
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“I was a fan of the ideas [van Raemdonck] was bringing to the table; there were talks of transformation and making innovation more ubiquitous across the organization,” said Emmons, who called his greatest accomplishment at Neiman Marcus inserting IT into the conversations of the ideators on the business side of the company. “At the end, things were not moving quickly enough, and it felt like more barriers were popping up between departments.”
Retailers making a big to-do about innovation while sitting at a standstill is nothing new, said Liz Bacelar, CEO of The Current Global, an innovation consultancy where Emmons signed on this month as chief technology officer. Clients include Gucci, Burberry and Tiffany & Co. “So many of my contacts are so unhappy,” she said. “Everyone’s like, I feel like I’m a vanity hire because I was hired to do something, but I don’t have a budget, I don’t have a team, and I don’t have the time.’ At the same time, the CEOs of their companies are giving press conferences about their innovation, and they want to be in Fast Company. But they’re not doing anything.”
Emmons said none of the projects he launched at Neiman Marcus were for PR, but he did use the positive press attention they received as ammo when asking for budget. “The sad but true statement is that I was always more important outside of the doors of Neiman Marcus than I ever was inside,” he said.
What Neiman Marcus is focusing on in-house, according to Miller, is creating a seamless, personal shopping experiences across stores and digital. The company reported in December its fifth-consecutive quarter of comparable revenue increases ($1.1 billion in total revenue for the quarter, up 2.8 percent). In the past two years, it’s revamped its website to include features like personalized content and digital stylists. Online sales now account for 35 percent of the business, seeing a growth rate of more than 10 percent every year. Offering more product exclusives and more opportunities for sales associates to connect with customers are priorities. Positions the company is recruiting for include digital engineers, marketing technologists and experts in data and analytics. She said Neiman Marcus has peak positioning in the increasingly crowded landscape of luxury retail, seeing as the online players are just inching into brick-and-mortar. Neiman Marcus will open store No. 43 in NYC’s Hudson Yards in March.
In response to Emmons’ charge that in-house innovation failing at Neiman Marcus, Miller pointed out the retailer’s reputation as an innovative company: “We were the first luxury retailer to have a loyalty program, the first one to have an e-commerce site. We’ve always had a very innovative culture; it’s in our DNA — that’s what we drive and foster within the organization,” she said. “It’s not just from a technology standpoint, but we’re bringing new ideas, partnerships, products and capabilities into the organization, and we’re not afraid to fail. We test them, and when they work, we expand. When they don’t, we pull back. We drive the type of unique, innovative culture that’s going to help us grow.”
