COVID-19 and widespread unrest over social injustice certainly cramped some of the style in the retail industry in 2020.
The murders of Ahmaud Arbery, Breonna Taylor, and George Floyd and numerous other egregious incidents illuminated a glaring spotlight on the systemic racism, injustice, and inequities experienced by many people of color. They forced uncomfortable but necessary conversations in workplaces and other domains and prompted urgent calls for corporate leaders, not government, to champion the efforts for change. The social strife increased the strain of the pandemic-induced economic pressures in retail that were already ravaging sales revenues, deepening debt, jeopardizing jobs, and shutting down stores.
Many brands have folded and vanished from the retail landscape. The Neiman Marcus Group came close to the edge as it filed for bankruptcy in May. By September, however, the century-old, leading-edge arbiter of luxury lifestyle fashion and accoutrements completed the process.
With the support of its creditors and new equity shareholders, including many former debt-holders who exchanged their debts for company equity, NMG eliminated more than $4 billion in debt, strengthened its capital structure, and boldly positioned itself to transform the future of retail.
Relationships x digital agility
NMG may be in the retail department store category, but it stands head and shoulders apart in many ways. CEO Geoffroy van Raemdonck defines the company as a platform for customers to interact with personally advised curations of style. NMG, he says, has the largest luxury e-commerce platform in North America, the strongest relationships with customers, and it is advancing in digital innovation.
Loyal, affluent customers who spend more than $10,000/year account for nearly half of NMG’s sales. On average, each of these customers spends approximately $50,000/year at the stores. Despite the global health crisis, these customers have been shopping more than they did in 2019 – online and via the newly launched NM Connect mobile app.
NMG sales associates are rapidly being transformed into relationship managers who emphasize interaction over selling. They leverage digital technology and data to personalize how they curate styles and deliver services in the time, place, and manner customers want.
While brick-and-mortar will remain integral to nurturing the relationships in NMG’s core business, the avenue for future growth is in digital with the ability to scale at very low cost and leverage data to personalize attraction and strengthen loyalty among customers who have lifetime value.
Journey to belonging in the workforce, workplace, and marketplace
NMG is also taking the long view in shaping its culture for transformational change with a top-down approach to diversity, equity, inclusion. Instead of a proliferation of new, check-the-box programs, the company is integrating evidence-based, bias-interrupter practices holistically across its ecosystem.
The aims include casting wide nets to attract, retain, and develop succession plans for diverse workforce talent, communicating equitably to promote a day-to-day workplace that feels inclusive, and enhancing diverse representation in media/marketing strategies to ensure a consistent high-touch experience for all stakeholders throughout the company’s marketplace.
Deployment will be incremental to achieve marked and quantifiable improvements in a way that enables management, associates, vendors, and customers to carry some weight related to the strategy. Course corrections will be necessary along the way if results fall short of expectations, and milestone success celebrations will be important to sustain momentum.
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