Richard Marcus worked at Neiman Marcus from his teenage years until 1988, the last ten years of which he served as CEO and Chairman. Upon leaving Neiman Marcus, he began an exploration of how the Internet would change the relationships between retailers and their customers, vendors and employees.
I sat down with Richard to discuss luxury retail, and how he’s hoping more luxury brands embrace social media in 2010.
Is luxury behind in online technology compared to other retailers, and if so, what will change their trajectory?
Hard to say… there are some luxury sites that have some pretty cool online shopping experiences and others that are focused on the aura of the brand. Great storytelling is lacking online. And some luxury retailers are reluctant to engage their customers in meaningful feedback. Continuing down that path is a mistake.
How do people shop differently for luxury items than they shop for everyday items?
I have a problem with the word “luxury.” What does it mean: a brand associated with high prices? Good design and quality manufacture? Something that is limited and scarce? In many peoples’ minds, I suspect it is synonymous with “the best.” Others may think of luxury as a desirable object or experience that is only occasionally within reach. How people shop for what they believe is luxury will depend on whether it is aspirational, and the standard by which they make many purchase decisions.
What has been the biggest change in retail in your lifetime, and how did it change things?
Lower tariffs on imported goods and the Internet. The first opened up the world of sourcing and the second has changed the ways companies speak to their customers, vendors, employees and stakeholders.
In your years of retail experience, have consumers/shoppers changed? If so, how?
The old saying, “the more things change, the more they stay the same” remains a useful reminder. Notwithstanding what some officials would have us believe, shopping isn’t the most important thing in life and customers want value (quality consistent with price), choices, and service consistent with the particular purchase moment (different service is required for a quick purchase of socks versus a new suit), and an experience that is enjoyable if not memorable. The good thing about the Internet is that you don’t encounter a salesperson’s bad breath.
What’s been the biggest change at Neiman Marcus since its inception?
Clearly, the size of the business has changed dramatically since the first store was built in downtown Dallas. But, perhaps the biggest change is that for 3/4 of its 100+ years the store was fervently engaged in educating customers about quality, style and fashion. As customers have more sources for all of this information, Neiman Marcus is less in the education business.
What do you see as the future of luxury retail?
There will always be people who want the best, and the luxury retailers who are great storytellers will prevail.
Luxury retailers, as well as brands, are late adopters to letting customers review their products. Should they be?
No. They need to understand it is happening whether they support it or not. I have hundreds of customer letters from my 30 years at Neiman Marcus that testify to our customers’ willingness to compliment and criticize. Compliments are fine, but criticism helps you improve your business. Today, the tools available for really useful interaction with customers should be embraced by all businesses.
We’re seeing more and more luxury brands embrace the customer voice online to drive social commerce. Keep an eye on this blog for more insights from niche brands.