Revenue growth continues to shift online for luxury retailer Neiman Marcus, and the company says it is taking a proactive approach to stay ahead of the curve on that end.
“We believe that aspects of our digital strategy have strong appeal to a more modern customer, and by that I mean one who is very open to sharing and shopping experiences and preferences through social media,” CEO Karen Katz says.
Online sales grew to $413.5 million in Q2 2015, up 15% from $359.6 million during the same period last year. For the first six months of fiscal 2015, Neiman Marcus is reporting online sales of $677.8 million, up 14.7% from $590.9 million during the same period last year.
Helping fuel that growth have been innovations launched during the past six months as the retailer tries to change the way customers interact with the Neiman Marcus brand. Neiman Marcus is No. 41 in the Internet Retailer 2014 Top 500 Guide. In January, the retailer unveiled a “Memory Mirror,” which makes it easier for shoppers to compare how they look in outfits and share those images via social media. Neiman Marcus has also deployed an addition to its mobile app that lets shoppers take a picture of a product and the app then immediately shows them several options they can buy.
Katz told analysts on the retailer’s Q2 2015 earnings call that she sees mobile in particular as having great growth potential for the brand.
More customers are using their phones to view the website and using the Neiman Marcus app, she says. “Our goal is to make it easier and easier for people to shop on their mobile phones. It’s hard to know what percentage it will ultimately be of the overall e-commerce business, but it’s becoming more and more of a factor in how we think about our business.”
On the call, Katz was quick to praise the team working in the company’s Texas-based Innovation Lab, or iLab, which aims to find new ways to reach luxury shoppers, regardless of where they are.
“The team is constantly researching, testing and piloting new technologies and applications that have the potential to transform how a customer experiences our brands of luxury and fashion with a very high level of personalized service,” she says. “To date, we’ve rolled out an impressive array of technology enhancements for our customers and sales associates alike.”
It’s not just the technology enhancements that are fueling growth however.
Katz says she and her team are constantly evaluating how different product categories perform in the retailer’s physical stores to determine which lines might be a better fit online instead.
“Although we downsized kids (departments) in a number of stores, the kids business online has been explosive,” she says. “Because we have both channels to work with, we can really compensate if one thing isn’t performing quite as well in the stores.”
Q2 2015 was the first quarter that sales from German luxury e-retailer MyTheresa.com, which Neiman Marcus acquired late last year, were included in the company’s earnings. According to the filing, Neiman Marcus generated $35.8 million in revenue from MyTheresa.com, which accounted for 8.7% of the company’s e-commerce revenue for the quarter. MyTheresa.com ranks No. 467 in the Internet Retailer 2014 Europe 500.
Neiman Marcus recently hired eBay Enterprise veteran Michael Kliger as the new president of MyTheresa.com. Katz says she has great expectations for Kliger, who started March 2.
“Michael has impressive experience in building and leading an international team and will greatly help advance our growth plan,” she says.
For the second quarter of fiscal 2015 ending Jan. 31, Neiman Marcus is reporting net revenue of $1.522 billion, up 6.2% from $1.433 billion in during the same period last year. For the first six months of fiscal 2015, Neiman Marcus is reporting net revenue of $2.708 billion, up 5.7% from $2.561 billion during the same period last year.
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