Neiman Marcus is neither a department store nor a digital pure play, explained Geoffroy van Raemdonck, CEO at Neiman Marcus Group, to the audiences attending at NRF 2023: Retail’s Big Show. Rather, it’s a relationship business at the heart of which sits both its customers and store associates.
With just 2% of its customers responsible for generating 40% of the businesses revenues – averaging 25 shopping trips a year and spending $27,000 – the relationship between customers and associates is the key to converting the considered luxury purchaser.
“When you look at buying something that’s going to create this magic emotion, and that is a commitment, you’re looking for someone to guide you, inspire you, to tell you it fits and to tell you that you can stretch further.”
The company employs around 4,000 sales associates, each staying with the business on average around nine years. Sales staff are paid on commission and 1,000 of those sell product valued at more than $1 million a year – a reflection, says van Raemdonck, of their unique ability to connect personally with their customers, get to know them intimately and, in turn, provide them with the best assortment of products that match their needs. Culture is key to keeping such high value staff associates in the business says van Raemdonck. Individuality is cherished and there is a very strong focus on work/life balance.
Central to Neiman Marcus’ business model is an integrated channel approach incorporating physical, online and remote selling, with associates personally connected to their customers. And this mulit-channel approach is central to revenue generation; customers who engage across channels spend five times more than those who only shop on one channel.
Highlighting the importance of one-to-one communication he explains that despite, or perhaps because of, the transactional nature of modern life people want more.
“At the end of the day, we are all social creatures. We want interactions. We want to touch the product. We want the advice.”
He cites the example of one associate whose remained in contact with a key customer during the Covid-19 pandemic, offering recommendations for television shows and other non-sales related tips for occupying his time during lockdown. Ultimately, when that customer decided he wanted to give his wife a gift to thank her for her work keeping the household afloat over those difficult months, he turned to the sales associate, resulting in the purchase of a seven-carat diamond ring.
“We spend time focusing on a few clients who have the potential to engage with us and build that relationship, so that we ultimately drive customer lifetime value.”