Neiman Marcus is on board with fashion’s see-now-buy-now movement, and it’s pushing its brand partners to join them.
During a conference call with investors on December 13, Neiman Marcus president Karen Katz said the department store retailer is working to connect with consumers, especially “sub-groups” of high-earning millennials who are shopping on-trend and in the seasons within which they plan to wear their new items.
“No one is buying winter coats in the summer or sandals in the dead of winter. Customers want to buy now, wear now,” Katz said, adding that on top of that, they’re also shopping around for the best price online before purchasing, with less loyalty to any one brand or retailer.
This shift in consumer behavior was one reason Katz offered to investors regarding Neiman Marcus’s first quarter results for 2017. With sales of $1.1 billion, the company saw a year-over-year decrease of 7.4 percent, which Katz called “disappointing.” Other competitors saw less of a downturn in the same time period: Nordstrom posted a comparable sales climb of 2 percent, and Saks fell at a smaller margin of 4 percent.
According to Katz, Neiman Marcus is tracking specific trends to determine what’s resonating with today’s customers, and it’s seeking out exclusive collections to keep customers from shopping elsewhere. For the holiday season, the retailer has been pushing the hashtag #OnlyAtNM to designate which of its products are exclusive to Neiman Marcus on social media, but Katz said that the “lifeblood” of the business is tracking and targeting what’s most relevant to customers.
“We’re on top of different fashion trends or different brands that are performing well,” she said. “Those are the things that our merchants are doing best — attack the vein of what can resonate with the customer. We’re all over that as much as we can be, and that’s the lifeblood of our business.”
To get those relevant trends to customers, Neiman Marcus is pushing vendors to follow suit with the buy-now-wear-now trend populated by designers like Tom Ford and Tommy Hilfiger.
“We constantly challenge the brands we do business with for newness, for buy-now-wear-now and for the right attitude of product — that is what the customer is looking for,” she said, specifically naming sneakers and a more casual style of dress as trends that reflect the attitude of the customer. In October, Neiman Marcus launched an “Active” collection, featuring casual styles from Stella McCartney, Fenty Puma, Common Projects, New Balance and Off-White. At the time, Nordstrom’s svp and general merchandise manager Liza Kazor told Glossy at the time that the goal was to not only rope in new customers, but also to offer existing customers new items that fit their changing lifestyle.
Outside of the persistent presence of athleisure, Katz said that velvet shoes and bags, and Gucci items performed particularly well over the past few months — and that Neiman planned to work with vendors to dig deeper in these areas.
These internal shifts represent a strength of Neiman Marcus’s, said David Melancon, a brand strategist.
“Neiman Marcus has always invested a lot in understanding their customer and their data,” he said. “They’re listening and putting the customer at the center — that will pay off.”
In November, Neiman Marcus tested new waters when it opened a Rent the Runway store-within-the-store at its San Francisco location. The goal of the partnership with a rental platform is to better understand how millennial women are approaching fashion, by determining what they want to rent, which brands they’re investing in, and what items they’re pairing with borrowed designer items. In the first few weeks, Katz said that “all” Rent the Runway at Neiman’s customers were new customers and that they’d seen them spending time in the overall store outside of Rent the Runway. The retailer has plans to expand the partnership to more locations in 2017.
Apart from customer trends and moods, a move to modernize Neiman Marcus’s internal inventory and data management systems backfired. NMG One, a common merchandising system that compressed the retailer’s legacy systems into one, rolled out with a series of problems in August. Glitches around order management and processing and inventory replenishment amounted to a total sales impact of $30-35 million in the first quarter. Katz said that over the next few months, the team planned to have the problem sorted out.