Inside Neiman Marcus’ $ 500 million tech investment
After filing for bankruptcy amid a pandemic, Neiman Marcus Group, the owner of luxury department stores in the United States, is betting $ 500 million that investing in technology can turn things around.
Neiman Marcus plans to spend the sum over the next three years on new technology, updating its stores and speeding up delivery times. Bob Kupbens, new executive vice president and chief product and technology officer of the Neiman Marcus group, who joined in February and had previously worked with Apple and Ebay, is leading the investment. He will work with the e-commerce team, the “Connect” app and the innovation team, where experimental projects on Neiman and Bergdorf Goodman are planned.
“People love Neiman Marcus,” Kupbens said in an interview. “So how do we make an even deeper emotional connection? Our salespeople do it so well every day, so how do you invest in a technology that allows them to do more and then bring a deeper perception of people’s perceived value and integration with the brand? “
Technology to improve personal relationships with customers is essential, making services like referrals, one-on-one communications, and store visits better, faster, and more scalable. Above all, it is the best customers who should benefit. The goal is what the company calls “integrated luxury retail,” which translates into personalized services for a small subset of customers, says Kupbens; 40 percent of the retailer’s business comes from customers who spend more than $ 10,000 a year, and about 35 percent of the group’s revenue comes from the retailer’s credit card holders.
$ 500 million is a sizable investment, highlighting the work the U.S. department store needs to do to make up for lost time, catch up with shifts in customer behavior, and a new retail environment. The Neiman Marcus group, which is made up of Neiman Marcus, Bergdorf Goodman, Neiman Marcus Last Call and Horchow, has gone through difficult times and has operated under “crushing debt” for the past five years, notes Mark Cohen, director of studied retail at Columbia University Business School. In May 2020, the group filed for bankruptcy, citing the pandemic as a catalyst. It canceled $ 4 billion of its over $ 5 billion debt by restructuring and giving creditors control. It has closed most of its low-cost Last Call stores and its new Hudson’s Bay store for good, and is now reopening its 43 Neiman Marcus stores and two Bergdorf Goodman stores.