Will in-store clienteling aid Neiman Marcus’ digital push?

Discussion
Source: Neiman Marcus
Oct 23, 2017
Tom Ryan

As a driver of its just-announced digital first strategy, Neiman Marcus is counting on in-store associates, armed with sophisticated data-grabbing tools, to link offline to online worlds.

On its fourth-quarter conference call earlier this month, CEO Karen Katz told analysts the luxury retailer continues to invest in software tools to “deepen engagement” and “help our associates drive sales outside the four walls of the store.”

A major focus is continued investments is Isell, a proprietary digital clientele management tool first rolled out five years ago that allows sales associates to use an app on a company-issued iPhone to retrieve customer data and “tap into customer preferences.”

To further personalization, custom software is being developed that enables selling associates to send personalized outfit suggestions to customers via text message, which Ms. Katz described as “already a key driver of transactions.” The suggestions are based on past purchases, customer browsing history on the company’s websites, social feeds and/or inquiries.

The clienteling tool is guiding the company’s first platform under the digital first strategy that focuses on digital luxury services. Two other platforms involve upgrading Neiman’s e-commerce sites and increasing its selection of exclusive merchandise.

“Overall the driving force behind our digital first strategy is our ability to leverage data and analysis to garner more insights to customer preferences and behaviors,” said Ms. Katz on the call. “From there, we intend to deepen the customer engagement by delivering an unmatched experience that includes a differentiated product assortment, personalized offerings based on individual preferences and styles, and unparalleled customer service.”

In a column that appeared earlier this year in Women’s Wear Daily, Stephan Schambach, founder and CEO of NewStore, wrote that the risks of associates using smartphones for personal reasons is far outweighed by the benefits of a data-enriched, in-store experience.

“Customers are expecting and demanding a higher level of tailored service,” Mr. Schambach wrote. “The apps and the data are there, simply waiting to be used for that purpose.”

DISCUSSION QUESTIONS: Do you see data-supported in-store associates helping stores bridge the gap between offline and online experiences? What’s holding back the use of devices to help store associates offer personalized suggestions to customers?

Braintrust
"Integrated experiences demand empowered associates, and it certainly appears that Neiman Marcus is taking a giant step in that direction."
"Success here requires extensive analysis of data, integration of disparate data pools and a highly motivated workforce."
"In theory, it is great to empower their employees with all this information, but not all employees will have the skill set necessary..."

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22 Comments on "Will in-store clienteling aid Neiman Marcus’ digital push?"


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Mark Ryski
BrainTrust

Conceptually, the idea of arming in-store associates with devices to help them serve customers better is laudable, however execution is everything. Over-communication or messages that may be perceived as annoying will turn customers off very quickly. A challenge of enabling store associates to offer personalized suggestions and ongoing interaction is quality control. Not every associate will have the communication skills and judgement to use this as intended. Also, if store associates become overly distracted with their online activity and fail to serve in-store shoppers, the effort will be misplaced.

A program like the one Neiman Marcus is doing only works for customers who are interested in this type of service — many shoppers who visit their stores will not be and so the overall impact may be modest.

Phil Chang
BrainTrust

It’s a step in the right direction. The devil really is in the details so we’ll have to see how “enabled” employees are. Hopefully they’ve been given the right instructions — which should be something like, “go nuts, have at it.”

Hopefully each of these employees got a social media account with the ability to take pictures and share as well. If every customer who came into Neiman Marcus got an Instagram welcome or a Snapchat discount filter and a wonderful meme, Neiman Marcus would be on the right track.

Chris Petersen, PhD.
BrainTrust

Personalization is one of the rising expectations of today’s customers. It is also a critical differentiator for retailers who can provide it in a trust relationship.

Kudos to Neiman Marcus for equipping associates on the floor with more information. Instead of not trusting Millennials with an iPhone, Neiman Marcus is taking a bold step; empowering them with more information to personalize engagement.

However every tool has the potential for abuse and misuse. Putting all of the customer’s personalized information at the fingertips of associates is a LOT of responsibility. It will be critical for Neiman Marcus to not only train associates on the operations of the app, but on the people skills required to appropriately engage customers via “clienteling.”

This will be a very bold experiment worth watching. At the end of the day, customers will vote with their feet and their wallets.

Sterling Hawkins
BrainTrust

This is a really great step as the integration of online and in-store is becoming critically important. Especially as personalization and the corresponding customer interactions play out inside a department store. The details are in what data is available and how personnel is trained to use it effectively. Chris is absolutely right here in measuring success — customers will vote with their feet and wallets.

Max Goldberg
BrainTrust

Using technology to better the customer shopping experience is a real plus for Neiman Marcus, but will busy customers really want to get text messages from sales associates trying to sell them items? It would be better if Neiman Marcus used the iPhones to store customer purchase data and generate suggestions, in other words provide service, rather than sell. It’s good that Neiman Marcus is changing the way it approaches customers.

Cathy Hotka
BrainTrust

Don’t expect to see this program widely replicated. Success here requires extensive analysis of data, integration of disparate data pools and a highly motivated workforce. If customers respond favorably, it could be a game-changer for Neiman Marcus.

Neil Saunders
BrainTrust

This is an interesting and innovative move for Neiman Marcus, which is in desperate need of a boost to sales to prop up its ailing financials.

One of the main issues for Neiman Marcus has been the rise of direct selling by luxury brands — something that has partly undermined its reason for existence as a destination for high-end product.

Connecting directly with shoppers and providing a more extensive selection of exclusive merchandise should help to mitigate this trend. That said, this is only a partial remedy which will not be suitable for all consumers.

The bottom line is that Neiman Marcus remains in a parlous financial state and needs to make itself far more relevant in a crowded retail market.

Jasmine Glasheen
Staff

Using smartphones for in-store clienteling eliminates the risk of hourly associates wasting customers’ time by being unfamiliar (or unsavvy) with bulky CRM technologies. Most hourly associates already know how to use a smartphone and downloading an app is easy-peasy.

Dave Bruno
BrainTrust

For stores to stay relevant, experience is everything and empowering associates with complete 360-degree insights into shopper history and behavior (in all channels) is a long overdue step toward relevance for luxury stores like Neiman Marcus. I agree with others that overly aggressive sales tactics will need to be carefully monitored, but integrated experiences demand empowered associates, and it certainly appears that Neiman Marcus is taking a giant step in that direction.

Bob Amster
BrainTrust

We seem to agree that conceptually, the initiative has merit and potential. But the execution is the challenge. Maybe these concepts need to either incentivize or encourage associates to actually use the apps.

Lyle Bunn (Ph.D. Hon)
BrainTrust

Information is the new associate. When in-store staff have visibility into previous purchases, even to the point of knowing what is in the customer’s wardrobe already, suggestive selling and accessorizing can become the improved level of customer experience. The library that each consumer now carries in their head and on their smartphone are a natural step to digitally-enabled shopping. In the shoulder-to-shoulder world of associate assistance, this can easily translate to brand and retailer loyalty.

Ken Silay
Guest

The concept is appropriate, will be the norm eventually and has been talked about since at least 2013. I believe that there are at least three reasons that it is mostly talked about and not widely implemented. First, retailers must consolidate data from all channels to be able to efficiently identify and display all customer information from all channels and hopefully make appropriate suggestions.

Second, the store network must be robust enough to deliver the customer information while the customer is in front of the associate.

Third, support from the store operations and store sales management teams is critical to store associates using the capability. Naturally, the capability cannot provide excellent customer service if the associates don’t use it.

If a retailer doesn’t execute the due diligence identified above, their chances for a successful implementation will be significantly diminished.

Camille P. Schuster, PhD.
BrainTrust

Using the device to learn about a particular consumer to have relevant information for a consumer ready when interacting with the consumer. Using that information before interacting with the consumer could be offensive. Using the tool to send relevant text messages while a consumer is shopping (after an initial interaction) could be useful. The potential is there, but there will be a learning curve to use the tool appropriately.

Ryan Mathews
BrainTrust

The devil, as always, is in the details. This system works if you assume every associate uses the customer data correctly, for example. But, it is easy to see how this offer could go wrong if an associate had a grudge against the company, or even an individual shopper. There’s no doubt in my mind that personalization technologies are going to be a critical part of the infrastructure of every successful retailer. But, I’m equally convinced there may be some very nasty speed bumps on the road to that personalized future.

Jackie Breen
BrainTrust

To compete in today’s retail environment, you must bridge the gab between offline and online experiences. A key element to bridging that gap is data accessibility across all channels. Neiman Marcus is moving in the right direction here.

In theory, it is great to empower their employees with all this information, but not all employees will have the skill set necessary to provide the experience they are hoping to achieve. Employee training will be critical to the success of these efforts.

Doug Garnett
BrainTrust

This makes tremendous sense assuming some key challenges are met. Neiman Marcus must control the “creepy” or invasive factor. And, between the tech and the store associates, any suggestions sent to clients must be valuable.

Unfortunately, from the consumer end, many of these endeavors end up sending suggestions that don’t reflect our true interests. (Just look at Amazon’s suggestions. Despite 20+ years of data on my purchases I’ve only bought something they suggested once or twice in those 20 years.)

What makes me more hopeful here is the involvement of the store associates. While “data” suppliers claim data reveals all, it doesn’t. A warm human responding to the true personality of the shopper brings intuition and insight that make recommendations far more valuable — finding important insights data can never discover.

Cynthia Holcomb
BrainTrust

For over 15 years I have worked in the area of Preference Shopping Science. I know for certain successful technologies in this space must profile and understand disparate data pools of individual customer fit, look and feel preferences in apparel mirrored against the multiple disparate data pools of a multitude of individual product attributes. Individual sensory preferences of fit, look, and feel, must factor into an apparel recommendation by an associate.

We wear clothes on our bodies. Clothes are 3D. Bodies are 3D. An associate recommendation may reflect the style of the customer. But to execute a successful sale, the recommendation must match shoppers sensory preferences of how she like clothes to fit on her body, look on her body and feel on her body. Otherwise a miss … Much like shopping online, sensory aspects are missing.

Ken Morris
BrainTrust
In many cases, the physical store is falling short of meeting customer expectations for personalization that been reshaped by their digital retail experience. As consumers “check-in” on retailers’ e-commerce and mobile sites, they automatically receive personalized offers and recommendations based on their purchase and browsing history. However, most shoppers are still anonymous when shopping in a physical store so they don’t get the same level of personalized service. Putting mobile devices in the hands of store associates enables visibility to inventory (enterprise-wide) and customer data (purchase history, personal information, preferences, etc.) to deliver highly personalized customer experiences and timely follow-up communication with customers. To be effective, these tools can’t operate with yesterday’s information – they need real-time data, context and analytics. Many retailers have been slow to adopt these powerful mobile tools for their associates due to several challenges and obstacles that get in the way — other urgent priorities (e.g. payment security), lack of real-time visibility of customer and inventory information across all channels (e.g. disparate, decentralized systems) and lack of budget to purchase… Read more »
Mark Price
BrainTrust

Providing powerful data driven tools to enhance customer experience in-store with the associates has been a long time coming in retail. I applaud Neiman for moving this ahead. The ultimate positioning for any retailer is “you know me” and tolls such as this will help Neiman reinforce their relationship with their core customer base, increasing retention and frequency.

This capability will provide a bigger benefit to customers the more often they come in and the more they purchase. Being able to access sizes and colors based on historical transactions, as well as “next most likely” product suggestions, in-store, will provide a human touch with essentially digital capabilities.

I am excited to see how Neiman and other retailers will use this capability to improve customer experience.

PS: you need well-paid, retained associates to make this work, by the way….

Cameron Conaway
BrainTrust

Will “arming” associates with sophisticated tools allow them to deliver a better in-store customer experience?

There’s often an assumption that it will, but it’ll take plenty of training upfront to ensure the empathic human-centered approach remains front and center. I’ve watched many retailers deteriorate the in-store experience to improve the digital experience; that doesn’t result in a net win.

Still, there are too many gaping holes as it relates to in-store data. Shoring those up for the sake of creating a more personalized experience is critical.

Todd Trombley
Guest
The concept is completely valid and already exists in the market. A company called Salesfloor has an app that seems mostly identical to what Neiman Marcus is doing in-house. Harry Rosen, Saks, Stuart Weitzman, Bloomingdales, Hudson’s Bay, Lord & Taylor to name a few are all running the Salesfloor app. I led the pilot of the Salesfloor app at Harry Rosen starting in the Fall of 2015 and led the rollout to every Advisor in March of 2016. Rosen’s was the first major retailer to fully deploy the app. It is all about keeping the customer engaged with your brand, your store and their advisor. This engagement augments both the in-store, off-line and online experience of customers. Many clients found the idea of receiving curated, highly personalized suggestions via text with product images attached from their advisor quite compelling and very positive. Others did not react, a very few; an incredibly small handful, reacted negatively. It is important to note that many of the Harry Rosen Advisors were already keeping their clients up to date… Read more »
Peter Luff
BrainTrust
Yes, empowering staff with the information to act is a really important move. It should aim to enable staff to adjust the delivery to make the experience personal. The method of execution though is key, making it fixed in systems and apps risks depersonalising the delivery and is a big counter risk to this approach, potentially achieving the opposite. I see the biggest element holding these approaches back is trust in staff by retailers. Due to the lack of trust, staff are tied in systems and processes and yet one of the key things in store is the human touch which systems can drive out. My suggestion is train staff and trust them, then allow them to develop customer relationships which develop beyond the store, after all they are trusted to talk to a customer face to face in store, why not allow them to communicate via social media skills and create a more personalised 1:1 interaction. A quick tweet to say “hey that pair of trousers you were interested in are now back in… Read more »
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Braintrust
"Integrated experiences demand empowered associates, and it certainly appears that Neiman Marcus is taking a giant step in that direction."
"Success here requires extensive analysis of data, integration of disparate data pools and a highly motivated workforce."
"In theory, it is great to empower their employees with all this information, but not all employees will have the skill set necessary..."

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