A strong focus on personalization has paid off handsomely online for luxury retailer Neiman Marcus.
The retail chain, No. 43 in the Internet Retailer 2015 Top 500 Guide, reported in its IPO filing Tuesday that e-commerce accounts for 25.8% of overall revenues, or $1.014 billion, through the first three quarters of fiscal 2015. That Neiman Marcus on pace to easily eclipse last year’s totals, when e-commerce accounted for 23.9% of overall sales, or $1.157 billion.
The company states in its filing that personalization and making the most of customer data have been key to continued online growth. The company says it can attribute 90% of its overall revenue to specific shoppers, which enables it to create detailed profiles of many customers.
“We are able to associate substantially all browsing behavior on our digital platforms with unique individuals,” the company states in the filing. “By aggregating this data and employing advanced analytics, we are able to generate a single view of these customers’ engagement with our brands. We utilize this data to enhance the interactions with our customers when they are in our stores and personalize the presentation of merchandise to our customers when they shop online.”
Neiman Marcus uses Bloomreach, Oracle, Rapleaf, RichRelevance, WibiData and in-house services for personalization, according to Top500Guide.com.
The company also writes that technology has been a primary focus since Karen Katz was promoted to CEO in 2010. Top500Guide.com data confirms those efforts have proven fruitful, with Neiman Marcus growing its online sales on average by 10.99% a year since Katz took over.
There’s good reason why Neiman Marcus is investing so much money and effort in improving its online and mobile assets: The company’s data shows that 75% of all luxury spending is digitally influenced.
Over the past year, the chain has taken several steps to improve online and mobile offerings. In September, Neiman Marcus made an international splash by acquiring German luxury fashion e-retailer MyTheresa.com for an undisclosed price.
Last month, Neiman Marcus announced the expansion of its partnership with luxury online consignment retailer The RealReal Inc. (No. 239 in the Top 500 Guide). As part of the deal, shoppers who consign clothes through The RealReal can receive payment for their transactions in the form of Neiman Marcus gift cards, and receive an extra 10% if they choose that option. The move is designed to encourage those customers to reinvest proceeds they get from selling their own luxury items into new luxury items from Neiman Marcus.
Katz has been particularly focused on catering to mobile shoppers.
“Our goal is to make it easier and easier for people to shop on their mobile phones,” she told analysts on the retailer’s earnings call for the second quarter fiscal 2015 that ended Jan. 31. “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.”
The company has made a number of strides on that end. In the first quarter of fiscal 2015, Neiman Marcus gave in-store sales associates iPhones equipped with an app that provides them with information about a customer’s shopping history so that associates can offer more personalized service.
“This has enabled our sales associates to strengthen relationships with our customers in real time through text messages and emails,” the company writes in its filing. “We expect that improvements in our mobile technology will enable us to generate further insights into our customers and drive greater engagement and loyalty.”
In February, Neiman Marcus announced plans to test beacon technology—small pieces of hardware that are placed throughout a store that can pinpoint a customer’s location and trigger notifications within an app on a customer’s phone when she is in near particular displays—in three of its stores. In late October, the company added a Snap. Find. Shop. feature to its app that allows customers to take a picture of an item, see similar products that Neiman Marcus offers and buy those products right away.
In its IPO filing, Neiman Marcus says customers can expect more mobile enhancements.
“We are investing significant resources to enable our customers to browse and shop online and in store on mobile devices,” the company writes. “We continually enhance the functionality and user interface of our platforms to incorporate the latest available technology. We expect that improvements in our mobile technology will enable us to generate further insights into our customers and drive greater engagement and loyalty.”
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