Amid a Q4 loss, luxury retailer eyes growth through digital commitment
Despite posting its third annual fiscal loss, Neiman Marcus is launching a new digital strategy to help strengthen the brand going forward.
The struggling luxury chain narrowed its net loss to $366.3 million for the fourth quarter and fiscal year ended July 29, compared to a net loss of $407.3 million in the prior year. Total revenues were $1.12 billion, a 0.5% decrease in comparable revenues from the fourth quarter of fiscal year 2016.
The company credits these smaller losses to its growing online sales. In fact, Neiman Marcus CEO Karen Katz said the retailer’s online business “will continue to outperform our store business at 30% of total sales. It will continue to grow in importance,” according to the Dallas News.
This factor is pushing the company to pursue its new “Digital First” strategy. The program is designed to further its leadership position in the luxury retail space by anticipating customers’ evolving behaviors and engaging them more deeply to drive traffic online and in stores, according to Neiman Marcus.
For fiscal year 2017, Neiman Marcus reported total revenues of $4.71 billion — a 5.2% decrease in comparable revenues. The company also reported a net loss of $531.8 million for the fiscal year compared to a net loss of $406.1 million in 2016.
In addition to growing online sales, the company credits narrower sales declines to greater sales stability at full-line stores, and improved inventory alignment. It is also benefitting from a new inventory system that allows stores to see merchandise in stock across both chains and in warehouses, according to Dallas News.
ESPN to broadcast from HHC’s Seaport District NYC
ESPN will open a 19,000-sq.-ft. broadcast studio at Howard Hughes Corporation’s re-do of Manhattan’s South Street Seaport in spring of 2018.
Working out of Pier 17 at the waterfront development now titled Seaport District NYC, the cable sports network will produce several studio shows and radio broadcasts from the location. ESPN is likely to take advantage of Pier 17’s rooftop space for New York location shots when it opens next summer, HHC reported.
“Television goes where the audience is, and the historic Seaport welcomes millions of New Yorkers, visitors, and potential audience members each year,” said Barry Katz, general manager NEP Group, ESPN’s New York studio partner.
HHC colored Pier 17’s illuminated exterior ESPN red last night to celebrate the signing.
Brick-and-Mortar Stores Can Thrive by Letting Customers Drive Their Experience
Brick-and-mortar and online retail channels facing an inevitable and inexorable convergence. In their quest to stay relevant and avoid obsolescence, the new retailer mantra is personalized customer experiences.
One of the smartest personalization strategies around is giving the customer the information and tools to determine their own journey – in essence, creating their own experience. Online retailers have mastered this customer-driven experience by leveraging technology to allow consumers to search, compare, buy and receive products with unprecedented ease.
Thanks to analytics, online retailers continually get smarter about the experience each of their shoppers want. They can track, click-by-click, every search, view, comparison, purchase, and even click-off that the shopper makes. Each of these data points helps build a clear shopper profile that enables the retailer to serve up new product suggestions that are truly relevant to the shopper. Given this advantage, it’s not surprising to see online retail continually encroaching on brick-and-mortar sales.
In spite of trailing their online counterparts in personalization and customer-driven engagement, physical retail is by no means headed for extinction. It’s simply evolving. What will emerge from this evolutionary shift is a new breed of omnichannel retailers that we call “O-tailers.” These businesses are able to engage with customers across every channel including online, mobile, social and in-store.
Of course, there will be casualties as retail channels align and merge. We see evidence of this today as veteran retail brands are disappearing or enduring massive numbers of store closings. Common failure points for these businesses have been the inability to adapt to shifting consumer shopping behaviors and to create truly distinctive, customer-driven shopping experiences.
Technology offers a remedy for these brick-and-mortar retail deficits. In-store positioning and pathing technologies – and the data they produce – are enabling retailers to create customer-driven engagement in their physical stores. Armed with real-time and historical data on the customer’s in-store journey, retailers can leverage all of the experiential advantages of the physical store (see, feel, sample and have now), while offering the ease, convenience and self-direction of online shopping.
Indoor positioning and pathing technologies aren’t new. The first Bluetooth Low Energy (BLE) – based proximity beacons were introduced in 2011. Early beacon technology has shown promise in improving customer engagement. When tied to mobile customer loyalty apps, have allowed retailers to deliver promotions, exclusive offers, stock checks and other value-laden offerings that engage the customers as they enter and roam through the store.
While these early beacons have helped B&M retailers gain parity with their online counterparts, they fall short of achieving the same level of engagement online shopping delivers. One big reason why this is so is that while the technology can help retailers see and engage with the consumer, it fails to solve a universal, experience-defining question: “Where can I find this product in your store?”
Why is this such a seminal question? It’s because online retail has all but appropriated the discovery aspect of shopping, and so many consumers today visit physical stores with inherent purchase intent. They are on a mission to sample and purchase a specific item. In making that purchase-based journey, the shopper has already done most of the heavy lifting for the retailer. All the store has to do is make it easy to find and buy the product.
This sounds simple, but in spite of the fact that shoppers come to stores with true purchase intent, store operators often never know what that intent is. They have no practical way of surveying each and every shopper, and relying on the shopper to articulate their purchase intent proactively is, at best, a hit or miss strategy. More often than not, if a shopper knows what they want, but can’t find it, they leave; sale lost; and the retailer has no way of knowing that a sellable product was “hidden” from the shopper. To make matters worse, the shopper may also be frustrated that they took the time to travel to a store and could not find what they wanted.
The inability to connect the shopper to their desired product at the time of highest purchase intent is not only a revenue killer, it’s an experience destroyer.
Digital Lighting Fixtures
Physical retailers can take heart, however, because a new generation of indoor positioning and pathing technology, which uses densely installed digital lighting fixtures as beacons, enables positioning and location within a store with an unprecedented accuracy. Pairing this technology with digitized store maps rendered through a shopper’s mobile loyalty app, retailers can offer blue-dot directions straight to the aisle and shelf where a product is located. Sale made.
There are other ways retailers can use indoor positioning and pathing to gauge customer’s intent to purchase and improve their in-store experience. For example, the technology can see when a customer dwells in front of a product for a certain amount of time. The retailer can also see this, and respond in real time with a promotion to close the sale.
Customer assistance is also vastly improved. A shopper in need of assistance can make a request through the mobile app and the sales associate can use their mobile device to find the shopper’s precise location in the store. Further, minimizing the time it takes a shopper to find a product or get help means the shopper has more time to roam the aisles and continue filling their cart.
Next generation indoor positioning and pathing technology can level the playing field between brick-and-mortar and online retailers, and potentially tip the scale in favor of the physical store. More importantly, it helps the converged “o-tailer” create optimal customer-driven engagement across all of its channels. As such, retailers at every stage of their evolutionary path can benefit from the technology, and employ it to avoid extinction.