While many retailers embrace a digital-first identity, Neiman Marcus is touting its blueprint for “retail-tainment.”
Over coffee at a Midtown Manhattan hotel, Todorovich explained that retail-tainment is about “reimagining” store experiences, and that it entails working with brands and designers to come up with more imaginative and often complex experiences and presentations for shoppers that go beyond the usual retail theater.
“Different pop-ups, luncheons or engagements with customers have always been part of the retail playbook, but retail-tainment focuses on bringing incredible fashion and exclusive product, often across multiple categories, curation and the discerning taste Neiman’s is known for into environments that engage our customers at a different level,” Todorovich said. “They are multisensory. They are multidimensional. The scale is fully immersive. It’s no longer shopping as usual.
“We have been focused online in digital and have made innovative moves in that space, and there was a time where the entire market would be largely about growing the online business. But at the very same time, we’re investing in stores, along with being digital first.”
There’s an expediency to the strategy. Shopper traffic has been widely picking up at malls and stores across the U.S., with pandemic restrictions easing, so it behooves Neiman’s to make the most of its fleet of 37 luxury stores.
The onset of the strategy, or its first manifestation, started with the three-week Prada Coast installation at the Neiman Marcus store in the NorthPark Center in Dallas in June 2021. The setup was elaborate, recreating an Italian beach, with LED walls with live crashing ocean waves, sand, lifeguards, gelato and Prada’s summer collection set in a 2,200-square-foot installation on the main floor, and buoyed by engagements elsewhere in the store.
On Thursday, Neiman’s unveils a Burberry takeover at its store in the Lenox Square mall in Atlanta. The exterior has been wrapped with Burberry’s TB monogram print and more than 50 styles in men’s, women’s and accessories — all exclusive to Neiman’s — are displayed inside.
Last May, Loewe did “a full takeover” of Neiman’s Rodeo Drive store in Los Angeles, with aspects of the brand on each floor and the Neiman’s bar transformed into an Ibiza-style bar.
Next September, Brunello Cucinelli is providing an exclusive capsule designed specifically for Neiman Marcus by sisters Camilla Cucinelli and Carolina Cucinelli, with an extensive women’s collection. Various events are planned, including Carolina hosting an event in Texas for top customers and influencers. In October, Tom Ford will select from his private fragrance vault a collection of seven private reserve fragrances, another Neiman’s exclusive, with “an elevated immersive experience.”
With Neiman’s brand of retail-tainment, “You are immersed in different ways when you come into the store,” depending on the scope of the installation. “Some like Prada had different floors and a main stage; some are more like takeovers,” Todorovich said. “We had over 500 million impressions for the 10 installations we did over the last 12 months.” She also said that during Neiman’s fiscal third quarter, ended April 30, there were 1,100 events ranging from trunk shows and designer appearances to larger immersive experiences.
She wouldn’t disclose sales volumes on any of the installations, but she did say, “Some were in the seven figures within the first week.”
Typically, the installations/experiences stay up for two to three weeks and involve Neiman’s top 20 vendors, a list that includes Prada, Burberry, Dior, Brunello Cucinelli, Saint Laurent, Chanel and Louis Vuitton, among others. But not all of the 20 have participated in the strategy to date. “We have a schedule of 18 months in advance that is quite populated with luxury immersive experiences, some of which will be takeovers such as what we did with Burberry in Atlanta and Loewe in Beverly Hills,” Todorovich said.
She said sales at the top 20 brands are up 70 percent, year-to-date.
“We have always been about integrated luxury retail, balancing and focusing on all three of our channels,” meaning stores, digital and remote selling with sales associates and stylists. “We’ve talked a lot in the press about our focus on the innovation online including Connect (a tool for associates to communicate with customers in different ways) and our remote selling channel, and the acquisition of Stylize,” a machine learning SaaS platform for advancing personalization. There was also the $200 million investment by Farfetch to become a minority stakeholder in the Neiman Marcus Group.
“We have also talked about our $300 million investment in our stores” to renovate the Bal Harbour, Fla.; Atlanta.; White Plains, N.Y.; St. Louis; Oak Brook, Ill.; Houston; Paramus, N.J.; San Diego, and Tysons Corner, Va., stores. The figure includes landlord and vendor contributions. With more immersive installations, costs could get higher.
Todorovich emphasized that Neiman’s retail-tainment strategy has been resonating with shoppers and benefited from consumers’ renewed interest in shopping stores. Whether that endures or is just a short-term reaction by consumers after being cooped up at home during COVID-19 remains to be seen.
Asked about that, Todorovich replied, “When our stores were closed, we invented a whole channel [remote selling by sales associates] and had over 3 million interactions with our customers at the time when not a single one of our stores were opened. When the stores reopened, we reimagined what they should look like. Now that customers are back, we continue to focus on these tailwinds, and on fashion, innovation, curation and relationships with customers. The form those relationships take may change depending on the macro environment. While focusing now on these tailwinds, we are working with a great level of agility.”
Supporting the development of new store experiences, Neiman Marcus, as Todorovich said, “expanded our existing luxury maison footprint by more than 600 points of distribution over the last 12 months, and we continue to bring in new and emerging designers. For spring, we have 200 new brands across all the categories. A high percentage are exclusive and emerging brands. Out of 40 in contemporary, 20 are exclusive to Neiman Marcus.”
Six hundred points of distribution seems like a lot to bring into the stores, but it’s not a pile up, assured Todorovich. “Curation is what we are providing when we talk about new brands. It’s across all of categories. There are innovations in beauty, in home, in childrenswear, you have shoes, handbags, you have so many different categories. We are very discerning about who we bring in as a new brand. It has to be at the right time in their development so we can help them grow. We approach that very carefully, the curation part. We are looking to support the industry. Of course, you look at this seasonally. You ask, is this still relevant. Is this the portfolio you want to go forward with. You do prune your portfolio along the way.”
And you also work to fill any fashion voids in the assortment. To meet the demand for workwear, with the return to the office, Todorovich cited efforts to add tailored jackets “paired in unexpected ways with more feminine bottoms, blurring the line between leisurewear and officewear.”
Neiman’s upcoming introductions of collections from Bach-Mai and Eli Tahari’s Monot label, she added, reflect efforts to bolster the offering of fashion forward evening dresses. “There is a pent-up demand here we haven’t seen historically,” Todorovich said. “Customers are going back to events. We are just meeting this desire for more expressive eveningwear.”