At the 2014 M.B. Zale Visionary Merchant Lecture Series, Neiman Marcus Group President and CEO Karen Katz considered how the “shopping journey” for luxury customers could evolve in the next five years. Made possible by the M.B. & Edna Zale Foundation and hosted by the Center for Retailing Studies, the annual event seeks to connect Mays Business School students with retail leaders. This year’s event followed the format of a “fireside chat” in which Katz and Coleman Chair Professor in Marketing Venkatesh Shankar discussed a range of retail, marketing and leadership topics before a packed house of Mays students, faculty, staff and friends in Ray Auditorium. To kick off the event, Donald Zale ’55, the son of M.B. and Edna Zale and former president, chairman and CEO of Zale Corporation, presented Katz with the 2014 Visionary Merchant award.
During her remarks, Katz mentioned that she had learned a number of valuable leadership lessons from several of the company’s great leaders since joining Neiman Marcus as a merchandise manager in 1985. “Allen Questrom taught me how to be a great merchant by keeping the customer at the center of everything,” Katz said. “I also learned about how to build and lead great teams from Terry Lundgren, and Burt Tansky taught me to understand the luxury market and the mindset of the most affluent customers.” Katz also paid homage to the company’s iconic leader, Stanley Marcus, who was always mindful of burnishing the Neiman Marcus brand by keeping employees focused on the right things.
When asked about the impact of the global economic recession in 2008 and 2009, Katz noted that the downturn gave her leadership team an opportunity to think critically about the future of Neiman Marcus. Even though the company had historically underinvested in technology, Katz believed that technology would play an ever-more prominent role in shaping the shopping journey for her customers, particularly women. Recognizing that it was imperative to deliver a seamless shopping experience across the internet, mobile devices, social media and brick-and-mortar stores, she hired an IT expert from Silicon Valley to help lead the company’s online business into the brave new world of “omnichannel.”
Katz knew that communicationsâ€”namely convincing Neiman Marcus’ 14,000 employees (called Associates) to embrace technologyâ€”would be critical to the company’s success. “Creating a vision for your company and then getting employees to understand, accept and fully embrace those new ideasâ€¦ that is the essence of leadership,” she said.
Three years ago, Neiman Marcus bought 5,000 iPhones and gave them to their in-store Associates at 40 stores. The company also provided extensive training on how to use the devices so Associates can stay in touch with their customers via texts, emails and phone calls. More recently, the company purchased 2,000 tablets and put them in stores for customers to use. “By introducing technology into the traditional retail environment,” Katz noted, “we are seeking to transform the in-store shopping experience for our customers.”
When asked what luxury retailing would look like in five years, Katz pointed to several trends that are likely to reshape the future of the industry. “Customers will expect their favorite brands to be present in every aspect of their lives,” she said. “So retailers will need to deliver their brands consistently across old and new channels in a way that gives their customers a seamless and memorable experience.” She also noted that the death knell announcing the end of brick-and-mortar retailers is premature. “The physical store will continue to be the best marketing tool available to luxury retailers,” she noted.
“Big data” will also figure prominently in the luxury customer’s future shopping experience, according to Katz. One of the keys for retailers will be integrating the internal information they maintain on their customers with data on those same customers available through external sources. Successful companies will then apply that information to deliver an ever-more-personalized shopping experience for customers, whether they’re in the store, on their home computers or on mobile phones somewhere in between.
“Neiman Marcus is looking at applications such as sort-and-rank technology that will enable us to offer personalized deals to our online shoppers as well as equip our Associates with the information they need to enrich the shopping experience for customers in our stores,” she said. “At the end of the day, we want our customers to think, “Neiman Marcus really gets me.'”
Katz also offered several words of advice for students aspiring to careers in retailing. “First of all, I would caution them to be careful of what they put on their own social media sites, like Facebook. That’s one of the first places we go when we’re considering job applicants. Second, I would recommend that they find something they’re passionate about, and then bring a positive, can-do attitude and be willing to work hard every day. Finally, I would remind them that they are ultimately the ones who are in charge of their careers.”