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How Neiman Marcus Group Is Optimising Its Digital Transformation

With over $200m invested in its technology, and new backing from Farfetch, the Neiman Marcus and Bergdorf Goodman owner seeks to revolutionise luxury experiences through digital innovation.
Consumer using the Neiman Marcus Group Connect App. Neiman Marcus Group.
Consumer in a Neiman Marcus Group store. Neiman Marcus Group. (Courtesy)
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Fashion brands are leading the charge in boosting their investments in technology, estimated to grow from 1.6 and 1.8 percent of sales in 2021 to between 3 and 3.5 percent by 2030, according to The State of Fashion: Technology, the latest report from The Business of Fashion and McKinsey & Company.

For brands and retailers, the focus of digital investments is revolving around technologies that offer the greatest impact to clienteling, their sustainability impact and back-of-house operations, to best position their businesses for the opportunities to come and see a measurable impact on their bottom line.

Recognising the significance of technological advancement within the industry, Neiman Marcus Group (NMG) has dedicated over $200 million to digital innovations, with a focus on in-store and supply chain investments. To meet its customers’ expectations to access retail anywhere, any way they choose, the company is strategically advancing tech programmes across its stores, e-commerce platforms and digitally assisted remote experiences.

NMG recently partnered with Farfetch Platform Solutions (FPS) to replatform the Bergdorf Goodman website and mobile app, and open it up to international expansion. In addition to this partnership, Farfetch has made a $200 million minority common equity investment in NMG to further accelerate the company’s growth and innovation through investments in technology and digital capabilities.

In recent years, NMG has reimagined its technological approach from the bottom-up, doubling down on its commitment to integrated luxury retail by equipping its workforce on the shop floor with digital selling tools such as the “Connect” platform, powered by the SaaS programme Stylyze, which NMG acquired in 2021. Stylyze provides product attribution data, as well as digital outfit and room builders. Within its digital expansion strategy, NMG has opened a hub in India to support the group’s daily operations.

Now, BoF sits down with Bob Kupbens, chief product and technology officer at NMG, and cross-functional leaders at the luxury retailer to understand how the new technologies are bolstering NMG’s mission to revolutionise luxury experiences with the future in mind.

Chief Product and Technology Officer, Bob Kupbens. Neiman Marcus Group.

Bob Kupbens — Chief Product and Technology Officer

A former VP at eBay, Target and Apple, Kupbens specialises in customer experience, e-commerce, digital products and technology. At Neiman Marcus Group, he spearheads digital experience initiatives across all channels, which the company calls integrated luxury retail.

Why is technological investment key to the evolution of Neiman Marcus Group?

Over the past 2 to 3 years, the needs and desires of luxury customers have changed significantly, and we are constantly evolving to serve them, enabled through our digital clienteling services. We are amplifying our impact in a way that fosters a deeper relationship in accordance with new customer behaviour.

Our objective is to seamlessly integrate our people, technology and data, to make our customer’s retail experience extraordinary. Using data and sales associate skills together amplifies the impact the associate can have to deliver something that is specific and meaningful to our customers. It becomes emotional rather than transactional, which we call “the luxury of a relationship” at Neiman Marcus.

What are Neiman Marcus Group’s future plans for its tech investment?

What we are doing in-store, and how we foster that physical experience — because it is a big part of our business — will evolve the relationship consumers have with our digital touchpoints. We are looking to plug in these other external technologies in a way that ultimately supports the brand experience we are trying to create.

We have also recently launched a 2.0 version of Stylyze, the programme powering our clienteling app. The data science there is more enhanced, and augmented reality (AR) has become a part of our thinking too. AR experiences today are still in their early stages, but they are starting to get there. Our luxury customers expect something luxurious and well-articulated, so we will be focused on how to create extraordinary experiences for them.

How would you describe the culture of the technology team at Neiman Marcus Group?

At NMG, our culture is grounded in our values and a differentiated way of working, which fosters a culture of belonging. We encouraged a hybrid work environment even before the Covid-19 pandemic, and we have further integrated this working philosophy, which gives us access to the best talent wherever they are. As a result, we have hired team members across the country and the world, with the intention to operationalise our NMG Way of Working by developing hubs in Dallas, New York, and now Bangalore. We are leaning into an agile working strategy that gives us and our teams flexibility instead of focusing only on where the work gets done.

Our objective is to seamlessly integrate our people, technology and data, to make our customer’s retail experience extraordinary.

Within our tech team, there have been intentional efforts to create a culture that appreciates and understands the luxury experience we are creating as a wider business, which became clear with our Connect app. It played a big part in our success during Covid, when sales associates were suddenly unable to do what they would have in-store. To this day, our tech team can feel the direct connection between what they create and the value it creates for our customers.

What learning and development opportunities does Neiman Marcus Group offer its employees?

We have opportunities for everyone on the team to participate in diverse, cross-functional opportunities, like workshops or power hours in stores before opening, working on tips and tricks for more effective and efficient outreach. We make the innovation process a holistic, company-wide endeavour, and that’s why I think people like working at NMG — they can all be a part of transformational and innovative projects.

Regardless of where you are in this organisation, you receive a great education of what it means to be a part of this industry. For example, we have joined the Textile Exchange Membership alongside the likes of LVMH and Kering, which allows us to create insights that enable education on sustainable materials.

Vice President of Customer Insights and Advanced Analytics, Hongpei Zhang. Neiman Marcus Group.

Hongpei Zhang — Vice President of Customer Insights and Advanced Analytics

Zhang launched NMG’s Customer Insights and Advanced Analytics team and has built data science and advanced analytics teams for over 27 years at businesses such as Yahoo, Tailored Brands and now Neiman Marcus Group.

How has technological innovation evolved during your time at Neiman Marcus Group?

At NMG, I’m proud to say that a lot of our decisions, growth initiatives and strategies are completely data-driven. All areas of the business are analytics-based — it’s part of our DNA. For example, through our e-commerce, we offer product recommendations driven by data modelling and analysis. We showcase products powered by the best of our technology and analytics behind the scenes.

How do analytics inform the strategies and success of the team?

Analytics allow us to connect dots, from site performance to merchandise to our marketing investment. For example, our site conversion rate went up, and analytics quickly found a hypotheses to explain why. We considered whether it was attributable to the updated marketing mix through media optimisation, or if it was due to the improved checkout process. The analytics allows us to quickly pinpoint the success factors and focus on the investment strategies that give us the highest ROI.

We also offer analytics tools to assist our retail associates, like the “Shared Looks” function, which gives our associates insights on consumer preferences and recommended products. We are always seeking to better understand what excites our customers, so we can continue to inspire them.

What drew you to Neiman Marcus Group, and how have you grown at the company?

I joined NMG just over a year ago, and I have learnt so much. My responsibility is broadened at NMG to oversee our entire enterprise analytics, which includes data science, customer analytics, merchandising and supply chain analytics, and omnichannel analytics. Through these teams, I can combine quantitative and qualitative data, with the visibility I have on our customers. I can understand their needs and actually help them.

All areas of the business are analytics-based — it’s part of our DNA.

I’m based in the Bay Area and have spent most of my career in Silicon Valley. Without the change of NMG’s talent acquisition shift and approach to a flexible, hybrid way of working, which we call NMG WOW, I wouldn’t have had the opportunity to join the business and then attract talent for my team across the country.

I believe this speaks to the strategic approach of our senior management, to adjust and adapt to the marketplace wherever possible. I also get a sense of kindness and a focus on building strong and meaningful relationships in this business, which I have not seen that often in Silicon Valley, and it gives me confidence in our senior management.

Director of Retail Service and Customer Experience, Laura Miller. Neiman Marcus Group.

Laura Miller — Director of Retail Service and Customer Experience

Miller led the rollout of Neiman Marcus Group’s Connect app the week all stores closed during the pandemic. She has over 20 years of experience in the industry, formerly working at The RealReal, Tory Burch and David Yurman before joining NMG in 2020.

How has technology shaped the associate experience at Neiman Marcus Group?

The Connect tool was rolled out to every associate in March 2020, the same week we temporarily closed stores because of the pandemic. From that first week of my employment at NMG, our focus on technology was crystal clear.

NMG has made me see retail and the customer in a different way, and it has brought me closer to the customer.

Connect gives associates everything at their fingertips to build relationships — and relationships are what NMG has been about since the beginning. Our sales associates are no longer waiting on the floor for customers — they are empowered with tools and resources to connect with them directly. We have sent 1.9 million emails between our associates and our clients since rolling out the app.

At NMG, our associates are learning how to use this technology, to expand their reach and influence of style advisors. They are also learning how to see our customers — not just as store customers or online customers — but as Neiman Marcus and Bergdorf Goodman customers.

How has Neiman Marcus Group supported your career development?

NMG has made me see retail and the customer in a different way, and it has brought me closer to the customer. We continue to work closely with our product and innovation partners on ways to integrate Connect and other technologies to create a differentiated experience across our channel, and the sum of those parts has helped me grow and develop as a leader.

What excites you for the future of Neiman Marcus Group?

We are looking to scale and tailor our clienteling experience at every touchpoint through investments in the future of retail, innovation and collaboration. Across functions and across borders, we are constantly collaborating to provide the right experience for our customers — whether it is through restaurants or styling services, or circular services, like tailoring and alterations, that make our stores a destination for our customers.

It creates so much more in the Neiman Marcus and Bergdorf Goodman experiences — it becomes an entire ecosystem.

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