Where is the love?
Geoffroy van Raemdonck, chief executive officer of the Neiman Marcus Group since February, believes the world is becoming increasingly “transactional,” saturated by those social media “likes” and defined less by deeper human interaction.
In what could be considered his industry “coming out,” van Raemdonck mused on technology shaping the world, the “economics of love” and on how retailers and brands need to reflect on how to recapture the hearts and minds of their customers,
He stressed using technology to predict what consumers want and to cater to them on a personal level, and he spelled out the key objective — creating a broader luxury platform for the $4.9 billion Neiman Marcus Group, beyond the status quo of products and services.
“As a leader of a large retail group, I think a lot about do we (the industry) need to romance our customers again. Do we need to do something different to win their hearts? Have our customers fallen out of love with us?”
“In a world where technology moves so fast, we have to change the conversation. We need to really find how we can engage. We need to go back to the magic of emotions, the magic of experiences,” van Raemdonck said, referencing Neiman’s “Idea Factory,” a new incubator at the NMG’s Dallas headquarters for developing concepts, products and experiences not traditionally found in department stores and that could be epicure, food and beverage, travel, personal and family wellness, and social consciousness, to bring greater cultural relevance and engagement to the experience.
“We aim to leverage the assets that we have to drive what I call the Neiman Marcus Group transformation,” said van Raemdonck. “The transformation of Neiman Marcus is about scaling love. It’s about taking that emotion which technology now allows us to scale and scaling it three different ways.” That would be leveraging technology to personalize communications with customers, arming sales associates with information to help them make better product recommendations and sharing information with brands about best-sellers, margins and where the “white space” is.
“We need to make it magical for customers,” van Raemdonck said. “We are about experiences. We are about theater. When I look at the future, I see endless possibilities.
“We have a plan with 15 initiatives. Seven of them, we are very, very focused on right now.” The initiatives range from communicating personally to customers, to reexamining the role of sales associates and how they’re compensated, creating digital luxury experiences such as rolling out the digital stylist program, and strengthening partnerships with brands by using data in a win-win manner.
“Let’s talk about love. We were born out of love, all of us,” said van Raemdonck. “At the Neiman Marcus Group, we were born out of love for our brand partners.
“Stanley Marcus in the mid-Forties had the audacity to invite Coco Chanel to Texas and indulge her, in her beautiful Chanel suit, to a barbecue and that relationship was so strong at a time when she was relaunching her business that Chanel continues to be one of our strongest partners. The love that we have for brand partners is equal love to what we have for our customers and equal love for the 14,000 associates that work for us.”
Turning personal, van Raemdonck, wearing a Louis Vuitton suit and white Gucci sneakers, said he fell in love quite late in life. “I met my husband on a blind date, five years ago, and out of that love came two twin boys,” Charles and Hadrien. “They remind me every day of the power of unconditional love. They also remind me of what is love today with technology. I travel a lot, but every night when I travel, before the kids go to bed, I Facetime with them.” His son Charles kisses the phone. “This is a tender moment empowered by technology. That is beautiful, but technology can also come in the way of those emotions, and so this weekend as I was preparing for the conference, I took a break and turned to Hadrien, and said, ‘Do you want to play in the garden?’ So Hadrien takes my phone, swipes it, and says, ‘Papa I am working.’ Sometimes, while I am there physically, I am not there emotionally because technology gets in the way. We need to define those new codes in terms of how do we use technology in our favor, and not let technology stop us.”
Van Raemdonck recounted a visit to the Neiman’s store in Coral Gables, Fla., to meet three of the best sales associates. “I wanted to just have lunch with them, with no one else around. To hear firsthand about our best customers.” (Best customers at Neiman’s typically spend $50,000 to $100,000 a year at the store, though many spend in the millions, van Raemdonck noted.)
“I arrived at a little table in the corner, but there were only two associates, and I thought, this was not a good start.” The store manager had received a text from the missing associate that she would be late, so they had lunch without her.
“Then this wonderful sales associate comes in, profusely apologizing,” van Raemdonck recalled. “She said, ‘I was with one of my customers. She’s redoing her pool, and I was choosing with her the best tiles to refurbish the pool.’ Mind you, we don’t sell tiles. Mind you, she is not getting a unique commission on this. But she has a unique bond with the customer who is asking her to be there for her, and she unconditionally says, ‘yes, I will.’ She is not there for her ceo, but what matters is that she is there for that customer — and that definitely is how the economics of love work for us.”
“So a couple of weeks later, I am in our Austin store, on the contemporary floor and meet with this great sales associate, and she has really embraced technology. She says she sells $2.3 million of contemporary products through Instagram and through Neiman’s proprietary I-sell tool. She takes photos every day of what she feels is relevant. She dresses it on herself, on her team, puts it on the floor. She writes something and sends it to customers. She follows up individually and does most of her sales digitally from the Austin store. So the economics of love works,” albeit with a technology assist.
“It’s been eight months for me as the new leader of the Neiman Marcus Group,” van Raemdonck said. “We have not become lost in transaction. We aim to leverage the assets that we have to drive the Neiman Marcus Group transformation.”
Providing a review of the NMG portfolio, the ceo said the company has been “stabilized,” that it grew 4.5 percent in its last fiscal year, and that it’s experiencing “positive momentum this year.” The 42 Neiman stores (the 43rd opens in Manhattan’s Hudson Yards next March) the two Bergdorf Goodman stores, and the Mytheresa store in Munich are all profitable, he said. However, the company is saddled with significant debt that digs into the overall profitability.
Online, NMG generates $1.8 billion in luxury sales, van Raemdonck said, adding that the corporation’s web sites basically speak to 10 million customers making basically 25 million visits a month.
The ceo also said the company is going to “leverage technology to make it personal” and capture data online, offline and via social media. “I can do that across the 1,000 brand partners that we have. When we start aggregating, we get a wealth of information. If we mine deliberately, we can use predictively so that when you engage with us online, the landing page is yours, that when you look at product recommendations, is just hits the nail on the head that this is exactly what you are looking for. I can also use that information to feed to my sales associates and help them with recommendations.
“This is not about saying we are going to have technology do the job for us. It’s about technology empowering us. The same way technology empowers me to receive a kiss from my son” when they say good night via Facetime.
Neiman’s has created “a subset” of the CRM, analytics and creative teams, to review e-mail campaigns and attain and react to findings faster, leading to more personal communications to customers, a single view of the customer on the data base, and working less in silos. “We are in the process of really fundamentally changing how we work, so we can touch the customer differently. It requires investment and it requires a lot of human changes,” said van Raemdonck.
To further the personalization, a year-and-a-half ago, NMG implemented a new merchandising system, called NMG One. “Internally, it was a nightmare. It was really difficult to do,” said van Raemdonck. But once fully and properly implemented, the benefits become apparent. “So now we can look at each of our brand partners, and basically tell you this is a category where you are doing better than the competition. This is where your margins are compared to others. These are the price points where you are selling, and this is the white space where you could be selling. That this is a customer segment you are going after. We can can tell you the traffic online. We can analyze this wealth of information, and not sit on it, but bring it back to you. We have launched a whole initiative of sharing information with our brand partners, so you are more informed in driving your own business, and we can collectively grow the business.
“Obviously, the data is complicated. We need to make sense of it. We need to present it. We need to make it exciting, and the team was quite scared about it, and (after an early meeting) they came back with so much excitement because when you see the facts in front of you, that lays (out) the opportunities we all want to seize for growth. We all want to grow together, so technology is clearly empowering all teams to make transactions more personal.
Neiman’s is also working to “break the friction between channels.” Some retailers would call that creating a seamless experience, but van Raemdonck said, “It’s not called seamless. It’s called unconditional. We need to accept that the customer is going to start their journey with us and end their journey with us, wherever they choose to enter and wherever they choose to get out of the interaction.
“I would love all of my customers to be those that shop online and in-store,” van Raemdonck said. “Frankly, they are five times more valuable to us. The reality is we need to accept and love our customers enough so that we are going to be there for them, when they want us to be there, when they need us, and not when we would like them to be there.”
With Bergdorf Goodman, “We used to look at it as a store that has a digital presence. Now if you flip this around and start saying Bergdorf Goodman is about connecting with customers anywhere in the world with the Bergdorf luxury touch, which is not geography-specific. That it’s 24/7. That it’s digital, and that it happens to have physical walls and a physical presence on Fifth Avenue. The framework is different. So when we do a holiday book, we do it so it lives online. We’re thinking about our business in a different mind-set, in a way that is not bound to one channel.”
Nor is the company bound to only selling products, van Raemdonck stressed to the audience of vendors. “The possibilities as a luxury consumer platform are endless. They are endless for us and they are endless for you.
“The best ideas don’t come from how to we negotiate a deal. They come from how do we do something different,” the ceo added. “My job is to ignite people to think differently and to believe that we can innovate, that failing is OK. We just need to fail fast. That’s what keeps me up at night.”