NMG’s Geoffroy van Raemdonck On Cus­tomer En­gage­ment, Love, Broader Lux­ury Plat­form

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The ceo re­flected on in­dus­try chal­lenges, tech­nol­ogy, in­no­va­tion and what keeps him up at night.

Where is the love?

Geoffroy van Raemdonck, chief ex­ec­u­tive of­fi­cer of the Neiman Mar­cus Group since Fe­bru­ary, be­lieves the world is be­com­ing in­creas­ingly “trans­ac­tional,” sat­u­rated by those so­cial me­dia “likes” and de­fined less by deeper hu­man in­ter­ac­tion.

In what could be con­sid­ered his in­dus­try “com­ing out,” van Raemdonck mused on tech­nol­ogy shap­ing the world, the “eco­nom­ics of love” and on how re­tail­ers and brands need to re­flect on how to re­cap­ture the hearts and minds of their cus­tomers.

He stressed us­ing tech­nol­ogy to pre­dict what con­sumers want and to cater to them on a per­sonal level, and he spelled out the key ob­jec­tive — cre­at­ing a broader lux­ury plat­form for the $4.9 bil­lion Neiman Mar­cus Group, be­yond the sta­tus quo of prod­ucts and ser­vices.

“As a leader of a large re­tail group, I think a lot about do we (the in­dus­try) need to ro­mance our cus­tomers again. Do we need to do some­thing dif­fer­ent to win their hearts? Have our cus­tomers fallen out of love with us?”

“In a world where tech­nol­ogy moves so fast, we have to change the con­ver­sa­tion. We need to re­ally find how we can en­gage. We need to go back to the magic of emo­tions, the magic of ex­pe­ri­ences,” van Raemdonck said, ref­er­enc­ing Neiman's “Idea Fac­tory,” a new in­cu­ba­tor at the NMG's Dal­las head­quar­ters for de­vel­op­ing con­cepts, prod­ucts and ex­pe­ri­ences not tra­di­tion­ally found in depart­ment stores and that could be epi­cure, food and bev­er­age, travel, per­sonal and fam­ily well­ness, and so­cial con­scious­ness, to bring greater cul­tural rel­e­vance and en­gage­ment to the ex­pe­ri­ence.

“We aim to lever­age the as­sets that we have to drive what I call the Neiman Mar­cus Group trans­for­ma­tion,” said van Raemdonck. “The trans­for­ma­tion of Neiman Mar­cus is about scal­ing love.

It's about tak­ing that emo­tion which tech­nol­ogy now al­lows us to scale and scal­ing it three dif­fer­ent ways.” That would be lever­ag­ing tech­nol­ogy to per­son­al­ize com­mu­ni­ca­tions with cus­tomers, arm­ing sales as­so­ci­ates with in­for­ma­tion to help them make bet­ter prod­uct rec­om­men­da­tions and shar­ing in­for­ma­tion with brands about best-sell­ers, mar­gins and where the “white space” is.

“We need to make it mag­i­cal for cus­tomers,” van Raemdonck said. “We are about ex­pe­ri­ences. We are about theater. When I look at the fu­ture, I see end­less pos­si­bil­i­ties.

“We have a plan with 15 ini­tia­tives.

Seven of them, we are very, very fo­cused on right now.” The ini­tia­tives range from com­mu­ni­cat­ing per­son­ally to cus­tomers, to re­ex­am­in­ing the role of sales as­so­ci­ates and how they're com­pen­sated, cre­at­ing dig­i­tal lux­ury ex­pe­ri­ences such as rolling out the dig­i­tal stylist pro­gram, and strength­en­ing part­ner­ships with brands by us­ing data in a win-win man­ner.

“Let's talk about love. We were born out of love, all of us,” said van Raemdonck. “At the Neiman Mar­cus Group, we were born out of love for our brand part­ners.

“Stan­ley Mar­cus in the mid-For­ties had the au­dac­ity to in­vite Coco Chanel to Texas and in­dulge her, in her beau­ti­ful Chanel suit, to a bar­be­cue and that re­la­tion­ship was so strong at a time when she was re­launch­ing her busi­ness that Chanel con­tin­ues to be one of our strong­est part­ners. The love that we have for brand part­ners is equal love to what we have for our cus­tomers and equal love for the 14,000 as­so­ci­ates that work for us.”

Turn­ing per­sonal, van Raemdonck, wear­ing a Louis Vuit­ton suit and white

Gucci sneak­ers, said he fell in love quite late in life. “I met my hus­band on a blind date, five years ago, and out of that love came two twin boys,” Charles and Hadrien. “They re­mind me ev­ery day of the power of un­con­di­tional love. They also re­mind me of what is love to­day with tech­nol­ogy. I travel a lot, but ev­ery night when I travel, be­fore the kids go to bed, I Facetime with them.” His son Charles kisses the phone. “This is a ten­der mo­ment em­pow­ered by tech­nol­ogy. That is beau­ti­ful, but tech­nol­ogy can also come in the way of those emo­tions, and so this week­end as I was pre­par­ing for the con­fer­ence, I took a break and turned to Hadrien, and said, ‘Do you want to play in the gar­den?' So Hadrien takes my phone, swipes it, and says, ‘Papa I am work­ing.' Some­times, while I am there phys­i­cally, I am not there emo­tion­ally be­cause tech­nol­ogy gets in the way. We need to de­fine those new codes in terms of how do we use tech­nol­ogy in our fa­vor, and not let tech­nol­ogy stop us.”

Van Raemdonck re­counted a visit to the Neiman's store in Co­ral Gables, Fla., to meet three of the best sales as­so­ci­ates. “I wanted to just have lunch with them, with no one else around. To hear first­hand about our best cus­tomers.” (Best cus­tomers at Neiman's typ­i­cally spend $50,000 to $100,000 a year at the store, though many spend in the mil­lions, van Raemdonck noted.)

“I ar­rived at a lit­tle ta­ble in the cor­ner, but there were only two as­so­ci­ates, and I thought, this was not a good start.” The store man­ager had re­ceived a text from the miss­ing as­so­ciate that she would be late, so they had lunch with­out her.

“Then this won­der­ful sales as­so­ciate comes in, pro­fusely apol­o­giz­ing,” van Raemdonck re­called. “She said, ‘I was with one of my cus­tomers. She's re­do­ing her pool, and I was choos­ing with her the best tiles to re­fur­bish the pool.' Mind you, we don't sell tiles. Mind you, she is not get­ting a unique com­mis­sion on this. But she has a unique bond with the cus­tomer who is ask­ing her to be there for her, and she un­con­di­tion­ally says, ‘yes, I will.' She is not there for her ceo, but what mat­ters is that she is there for that cus­tomer — and that def­i­nitely is how the eco­nom­ics of love work for us.”

“So a cou­ple of weeks later, I am in our Austin store, on the con­tem­po­rary floor and meet with this great sales as­so­ciate, and she has re­ally em­braced tech­nol­ogy. She says she sells $2.3 mil­lion of con­tem­po­rary prod­ucts through In­sta­gram and through Neiman's pro­pri­etary I-sell tool. She takes pho­tos ev­ery day of what she feels is rel­e­vant. She dresses it on her­self, on her team, puts it on the floor. She writes some­thing and sends it to cus­tomers. She fol­lows up in­di­vid­u­ally and does most of her sales dig­i­tally from the Austin store. So the eco­nom­ics of love works,” al­beit with a tech­nol­ogy as­sist.

“It's been eight months for me as the new leader of the Neiman Mar­cus Group,” van Raemdonck said. “We have not be­come lost in trans­ac­tion. We aim to lever­age the as­sets that we have to drive the Neiman Mar­cus Group trans­for­ma­tion.”

Pro­vid­ing a re­view of the NMG port­fo­lio, the ceo said the com­pany has been “sta­bi­lized,” that it grew 4.5 per­cent in its last fis­cal year, and that it's ex­pe­ri­enc­ing “pos­i­tive mo­men­tum this year.” The 42 Neiman stores (the 43rd opens in Man­hat­tan's Hud­son Yards next March) the two Bergdorf Good­man stores, and the Mytheresa store in Mu­nich are all prof­itable, he said. How­ever, the com­pany is sad­dled with sig­nif­i­cant debt that digs into the over­all prof­itabil­ity.

On­line, NMG gen­er­ates $1.8 bil­lion in lux­ury sales, van Raemdonck said, adding that the cor­po­ra­tion's web sites ba­si­cally speak to 10 mil­lion cus­tomers mak­ing ba­si­cally 25 mil­lion vis­its a month.

The ceo also said the com­pany is go­ing to “lever­age tech­nol­ogy to make it per­sonal” and cap­ture data on­line, off­line and via so­cial me­dia. “I can do that across the 1,000 brand part­ners that we have. When we start ag­gre­gat­ing, we get a wealth of in­for­ma­tion. If we mine de­lib­er­ately, we can use pre­dic­tively so that when you en­gage with us on­line, the land­ing page is yours, that when you look at prod­uct rec­om­men­da­tions, is just hits the nail on the head that this is ex­actly what you are look­ing for. I can also use that in­for­ma­tion to feed to my sales as­so­ci­ates and help them with rec­om­men­da­tions.

“This is not about say­ing we are go­ing to have tech­nol­ogy do the job for us. It's about tech­nol­ogy em­pow­er­ing us. The same way tech­nol­ogy em­pow­ers me to re­ceive a kiss from my son” when they say good night via Facetime.

Neiman's has cre­ated “a sub­set” of the CRM, an­a­lyt­ics and cre­ative teams, to re­view e-mail cam­paigns and at­tain and re­act to find­ings faster, lead­ing to more per­sonal com­mu­ni­ca­tions to cus­tomers, a sin­gle view of the cus­tomer on the data base, and work­ing less in si­los. “We are in the process of re­ally fun­da­men­tally chang­ing how we work, so we can touch the cus­tomer dif­fer­ently. It re­quires in­vest­ment and it re­quires a lot of hu­man changes,” said van Raemdonck.

To fur­ther the per­son­al­iza­tion, a yearand-a-half ago, NMG im­ple­mented a new mer­chan­dis­ing sys­tem, called NMG One. “In­ter­nally, it was a night­mare. It was re­ally dif­fi­cult to do,” said van Raemdonck. But once fully and prop­erly im­ple­mented, the ben­e­fits be­come ap­par­ent. “So now we can look at each of our brand part­ners, and ba­si­cally tell you this is a cat­e­gory where you are do­ing bet­ter than the com­pe­ti­tion. This is where your mar­gins are com­pared to oth­ers. These are the price points where you are sell­ing, and this is the white space where you could be sell­ing. That this is a cus­tomer seg­ment you are go­ing af­ter. We can can tell you the traf­fic on­line. We can an­a­lyze this wealth of in­for­ma­tion, and not sit on it, but bring it back to you. We have launched a whole ini­tia­tive of shar­ing in­for­ma­tion with our brand part­ners, so you are more in­formed in driv­ing your own busi­ness, and we can col­lec­tively grow the busi­ness.

“Ob­vi­ously, the data is com­pli­cated. We need to make sense of it. We need to present it. We need to make it ex­cit­ing, and the team was quite scared about it, and (af­ter an early meet­ing) they came back with so much ex­cite­ment be­cause when you see the facts in front of you, that lays (out) the op­por­tu­ni­ties we all want to seize for growth. We all want to grow to­gether, so tech­nol­ogy is clearly em­pow­er­ing all teams to make trans­ac­tions more per­sonal.

Neiman's is also work­ing to “break the fric­tion be­tween chan­nels.” Some re­tail­ers would call that cre­at­ing a seam­less ex­pe­ri­ence, but van Raemdonck said, “It's not called seam­less. It's called un­con­di­tional. We need to ac­cept that the cus­tomer is go­ing to start their jour­ney with us and end their jour­ney with us, wher­ever they choose to en­ter and wher­ever they choose to get out of the in­ter­ac­tion.

“I would love all of my cus­tomers to be those that shop on­line and in-store,” van Raemdonck said. “Frankly, they are five times more valu­able to us. The re­al­ity is we need to ac­cept and love our cus­tomers enough so that we are go­ing to be there for them, when they want us to be there, when they need us, and not when we would like them to be there.”

With Bergdorf Good­man, “We used to look at it as a store that has a dig­i­tal pres­ence. Now if you flip this around and start say­ing Bergdorf Good­man is about con­nect­ing with cus­tomers any­where in the world with the Bergdorf lux­ury touch, which is not ge­og­ra­phy-spe­cific. That it's 24/7. That it's dig­i­tal, and that it hap­pens to have phys­i­cal walls and a phys­i­cal pres­ence on Fifth Av­enue. The frame­work is dif­fer­ent. So when we do a hol­i­day book, we do it so it lives on­line. We're think­ing about our busi­ness in a dif­fer­ent mind-set, in a way that is not bound to one chan­nel.”

Nor is the com­pany bound to only sell­ing prod­ucts, van Raemdonck stressed to the au­di­ence of ven­dors. “The pos­si­bil­i­ties as a lux­ury con­sumer plat­form are end­less. They are end­less for us and they are end­less for you.

“The best ideas don't come from how to we ne­go­ti­ate a deal. They come from how do we do some­thing dif­fer­ent,” the ceo added. “My job is to ig­nite peo­ple to think dif­fer­ently and to be­lieve that we can in­no­vate, that fail­ing is OK. We just need to fail fast. That's what keeps me up at night.”

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