Fashion retailers were initially slow to adopt to emerging technologies, but many are now actively testing new ways to remain relevant and valuable to increasingly digital consumers.
The challenge is accepting the idea that along with the technology hits come some misses, too.
Luxury retailer Neiman Marcus is a good case study. The Dallas company, also parent of the Bergdorf Goodman luxury emporium, four years ago created its own “innovation lab” and began inviting tech partners to investigate ways to improve customer experience and enhance employee capabilities.
“We are trying to make sure people feel comfortable shopping online and get the best of the store, and (make sure) people come to the store and get the best of the digital world,” said Chief Technology Officer Rajeev Rai in an interview. “Their experience has to be seamless if you really seek to attract and retain the digital customer.”
Serving that digital customer right is perhaps even more crucial for Neiman Marcus than for many of its rivals. The company generates 30.1% of its sales online. By eMarketer estimates, that ranks the retailer ahead of its department store rivals, including Nordstrom, Saks, Macy’s and Lord & Taylor.
Top 5 Department Stores, Ranked by Ecommerce Sales (as a % of Total Sales)
It’s also critical as Neiman, like many of its luxury rivals and fashion retailers on all ends of the price spectrum, struggles to retain customers, especially millennials, who are more inclined to shop online, and who increasingly focus on buying experiences over buying material things. Neiman in March said it’s exploring a possible sale after reporting its sixth straight quarter of lower same-store sales. (Lord & Taylor and Saks parent Hudson’s Bay Co. is reportedly in talks to buy Neiman.)
“High income shoppers tend to shop more online at least in fashion,” said retail consultancy WSL Strategic Retail CEO Wendy Liebmann. Neiman Marcus and other traditional fashion retailers are “doing a lot of catch up there because that higher income shopper is in the digital space in a very strong way…. You have to be prepared now because there are so many technologies out there and shoppers are learning about them, too. Try and fail—it has to be the motif of how every retailer, including fashion retailers, does business. You won’t get the sales unless you are experimenting and innovating.”
And Neiman indeed has been trying and failing along the way.
For instance, when the company noticed that only 85% of its in-stock shoe styles at Bergdorf Goodman (they sell such shoes as $965 Manolo Blahnik pumps) were on display, Rai’s team tried to solve the problem using RFID stickers to track inventory. But, Rai related at the WWD Retail 20/20 Forum this week, when it came time to test the system, Neiman discovered the RFID stickers were damaging the expensive lacquer of the shoes.
When testing the stickers in the lab, he said, Neiman used cheap shoe samples.
Neiman has since worked to fix that issue and saw the RFID implementation significantly improving its shoe-display level and purchase conversion.
But that wasn’t the only lesson. At a time when 3D printing was widely billed as an industry gamechanger, Neiman three years ago experimented with making 3D printouts of brides’ pictures for those who might want to “preserve the moment” and have them as keepsakes or give away as gifts.
But in a telling sign of why industrywide 3D printing never ended up taking off, Neiman abandoned the prototype after the company found it was taking too long and costing too much to just take the 3D images of the bride.