By Exec Edge Editorial Staff
Executive Edge sat down with Geoffroy van Raemdonck, CEO of Neiman Marcus Group, in an exclusive Q&A session.
- Tell us about Neiman Marcus Group – what sets you apart in the luxury retail space?
- At Neiman Marcus Group – which consists of both Neiman Marcus and Bergdorf Goodman – we are first and foremost a relationship business.
- We carry an exceptional assortment, thanks to our longstanding relationships with more than 3,000 of the world’s most desirable luxury brands. We are committed to fostering deep relationships with the customers we serve, so we can continue to deliver the unique and engaging retail experiences that they expect from NMG. Through the expertise of our 10,000+ associates, we deliver and scale a personalized luxury experience across our three facets of integrated retail: in-store, online, and remote selling.
- Our differentiated business model is profitable, rooted in our unique and integrated approach to retail. We are investing in opportunities to meet customers where they are, so they can shop whenever and however they want.
- Throughout our 115+ year history, our focus has been, and will be, to build lasting relationships with customers, brand partners, associates and our communities—a testament to the legacy of Stanley Marcus and the heritage of our brands.
- Neiman Marcus is a Dallas-based retailer that provides a curated product assortment, luxury services, and exclusive activations for customers in Pursuit of the Extraordinary. Neiman Marcus has a rich history as a brand builder, bringing together the world’s top luxury designers and customers to foster a dedicated following for generations.
- A New York landmark since 1901, Bergdorf Goodman represents the global pinnacle of style, service and modern luxury. With its rich history of showcasing leading and emerging designers, the iconic store at 5th Avenue and 58th Street—the crossroads of fashion—is a singular destination for discerning customers around the world.
- You’ve said before that NMG takes an integrated approach to retail. Can you talk more about what that means for your brands and customers?
- We believe in our integrated model, which aims to meet customers no matter where they are: online, in store or through remote selling.
- Our 36 Neiman Marcus and 2 Bergdorf Goodman stores are luxury lifestyle destinations that enable immersive experiences and invite customers to fully engage in luxury. We also offer immersive digital experiences though our websites and apps for customers who choose to shop there, and about 20% sales are transacted through remote selling enabled by our investments in technology that empowers our sales associates to foster customer relationships across all facets of our business.
- Integrated retail is especially important for two reasons:
- Customers who engage with both our stores and digital platform spend 5x more on average than single-channel customers, and those who shop across our integrated model with a sales associate relationship spend 12x more on average than a single channel customer without a sales associate relationship––which shows us that our model encourages loyalty and engagement.
- We live in a world where buying product is important––but what differentiates a retailer is the experience of that purchase. Many of our customers will engage with us remotely, but also choose to come into one of our stores for the luxury service and customized experience we offer. The curated assortment that we bring to customers, not only through our stores and digital channels, but also through extraordinary experiences, is a key pillar of our integrated strategy. Those multiple touch points help us build deeper relationships with our customers and ultimately offer a better retail experience.
- Can you explain the concept of “retail-tainment” – what does that mean for luxury retailers, and why is it important?
- ‘Retail-tainment’ is a key part of our approach, and one of the ways we’re revolutionizing how we engage with our customers.
- Customers love to buy product, and we pride ourselves on curating an assortment of the world’s most desired luxury brands that have integrity in their design and craftsmanship. But luxury is also the experience of buying. What you’ll find at our stores are incredible products that are timeless and trending. You’ll also find experiences, such as restaurants and beauty services.
- Retail-tainment is a sweet spot for us––combining exclusive products with one-of-a-kind, multisensory, exclusive experiences.
- On average, we host more than 100 customer events every week, but with retail-tainment we take that experience a step further. For our brands, it’s an opportunity to showcase a unique expression of themselves for our customers. This can look different, depending on the brand. For example, it could be Prada, laying sand in our stores to create an indoor beach, serving gelato, and offering products that aren’t available anywhere else. It’s always about surprising and delighting the customer in unexpected ways.
- Another example was our Bejeweled Ball, which took a long-standing jewelry program and brought it to life for our customers. We brought the world’s most venerable high jewelry maisons together offering a truly unique assortment of rarely seen pieces worth nearly $140M. Our top sales associates from across the country attended the event with their customers to create an unparalleled retail-tainment experience that was truly magical.
- You recently revitalized the Neiman Marcus Awards, which date back to the 1930s. Some NM Awards winners include fashion icons like Christian Dior and Coco Chanel. Can you tell me a bit about what the awards look like today, and why it was important to bring them back?
- The Neiman Marcus Awards are part of our DNA, celebrating the most creative minds in the industry. Today, creativity is what creates brand desirability in the luxury category, and so we felt it was important to bring them back. Symbolically, they’re a reminder that luxury endures the test of time.
- The modernized Neiman Marcus Awards are an extension of our growth strategy to Revolutionize Luxury Experiences. We’ve reimagined the Awards to offer our honorees premium access to our merchandising and marketing magic, supported by our business model – connecting top luxury brands and the American luxury customer together through exclusive activations.
- Last year, one third of our top customers shopped at least one of our award recipients’ brands, and our 2023 honorees saw, on average, double-digit increases in net sales – a testament to the halo effect of these awards. It’s really about creating a vector of acceleration and connecting those brands to the U.S. luxury customer that NMG serves every day.
- Where do you believe the future of luxury is headed?
- I’m very bullish on luxury in the long term, especially in the US. I think customers appreciate products that have integrity of design and craftsmanship, and I think that the luxury market is going to continue to grow. My view is – once you engage in luxury, it is a bit of a one-way street. There is one segment of our customer base that is more aspirational, and where we saw outsized growth during the pandemic, we’re now seeing normalization among that group. But overall, the segment is well-positioned to weather any challenges in the macro economy.
- I also see technology becoming more engrained in the luxury sector, as we realize the massive benefits in that area. Technology empowers our associates, allowing us to scale our reach, interact with our customers more often and better personalize our recommendations for them, ultimately allowing us to curate a better luxury experience. At the end of the day, luxury will always be about relationships, and so technology that works in service of human connection will be key in the future.
- Tell us more about NMG WOW. What is it, and why are you so passionate about it?
- NMG Ways of Working (NMG WOW) is our unique, integrated working philosophy—built on a strong foundation of flexibility and accountability. Inspired by our associates’ desire for flexibility in the workplace, NMG WOW is comprised of four pillars––all designed to create an environment that empowers our employees to achieve their best results. Those pillars include (1) I Work Smarter, (2) I Am Present, (3) I Integrate Life & Work and (4) I Empower… And Am Empowered.
- As part of the model, our employees have the opportunity to work wherever, whenever, and however they want to best achieve results––similar to how our integrated retail model offers our customers flexibility to shop when and where they choose.
- We want our employees to deliver their best impact, and we are committed to giving them the tools to succeed. Since implementing this policy, our employee satisfaction scores have increased, our retention rates have risen, and we’ve improved our time to hire rate, in addition to receiving a number of workplace recognitions.
- Can you talk a bit more about how NMG’s culture has fueled transformation within the business in recent years?
- We live in a world where things are quickly and constantly changing––the same is true of the luxury retail landscape. Over the last six years, we’ve transitioned from luxury department store to a luxury relationship business.
- Compared to pre-pandemic times, our relationships with both our brands and customers have changed significantly and continue to grow. At the end of our last fiscal year, our top customers were up nearly 20%, our top brands were up 50%, and the number of sales associates who sell more than $1 million annually increased by over 35% to around 1,100.
- A cultural transformation is underway as we move to a different way of thinking about our challenges and opportunities. Enabled by our growth mindset, we are continuing our transformation to evolve in meaningful ways and continue building strong relationships with our customers and our brand partners.
- By harnessing the Power of One, the concept that our individual talents form a collective strength, we are driving progress and revolutionize positive change in the industry.
- What do you believe is the most important quality for a business leader in today’s world?
- I’ve coined the term ‘Leading with Love’ to define my leadership approach. This mantra has now been embraced across our organization and drives our decision making and relationship building.
- Leading with Love guides how we treat our Believers—associates, customers, brand partners, investors and our communities—when making any business decisions. What we do matters, but how we do it is how we will be remembered.
- We have the unique potential to impact important social and environmental issues through our valued relationships with two very influential groups—the world’s most desired brands and the luxury customer.
- We released the NMG’s first ESG report, Our Journey to Revolutionize Impact, in 2022, setting out to make progress against 2025 goals, many of which we have achieved ahead of schedule. But as the name suggests, the journey continues as we make progress and expand our efforts to advance sustainable products and services, cultivate a culture of Belonging and lead with love in our communities.
- I also believe that investing in people and in a culture that inspires positive change is a vector of growth for business. Our strong culture of Belonging ensures that every associate feels welcomed, valued, and empowered to be their best.
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