What customer-facing innovation looks like at Neiman Marcus

Head of department store's innovation lab talks through his use of 3D imagery, beacons, RFID tagging, mobile apps and more

Beacons, 3D imagery, mirrors that play back what a consumer looks like in real-time and RFID tagging are just some of the digital-led capabilities being introduced by Neiman Marcus’ innovation team to the in-store experience.

Speaking at the Online Retailer Expo this week, the US department store’s innovation lab chief, Scott Emmons, took attendees through examples of how digital is being used to create the store of the future. Importantly, in many of these, he highlighted the role business partnerships, a test-and-learn approach, and customer-led thinking have played in the success of these projects.

The iLab was established four years ago as a spin-off out of Neiman Marcus’ IT department. A foundational innovation that led to its creation was deploying mobility infrastructure across the group’s 88 main and off-price stores, Emmons said.

An early project for iLab was the launch of 3D scanning within its bridal business. “We played around with scanning brides, then tried producing content based on those scans,” Emmons explained. This quickly expanded to include 3D figurines, ceramics and flower bases made in shape of bride’s gown.

“All of that was great, but the business hated the scanning process,” he admitted. “It was a great idea but the tech wasn’t ready yet, and it took 45 minutes to scan and do the imaging.”

Eighteen months later and with better scanning technology in hand, the team can capture all data points in single snapshot. This allowed Neiman Marcus to kick off photo shoots and saw imagery used for augmented reality (AR) proof of concepts where consumers could hold their smartphone to a catalogue and see dresses in different colours or on models walking across the page. It’s also being trialled online to provide rotational views of products.

“Experimentation is the name of the game – sometimes it’s before the business is ready, sometimes they jump on and I can’t go fast enough,” he said.

Emmons was quick to point out innovation can’t operate in isolation, and said he’s reliant on business partners across the business including marketing, store operations, and even security. “I also have to work with partners outside the business to pull these things off,” he said.

Another technology gaining ground in retail is beacons and microlocation. Emmons said Neiman Marcus started small, kicking off a test case using using Apple Wallet and ‘holiday pass’.

“We discovered we had a new channel for corporate marketing, as we could beacon enable events and promos in store,” Emmons said. “But more importantly, the local store PR managers could beacon enable events specific to their store. It was a new way to reach their customers.”

Having picked up learnings around how to better measure ROI, the trial was extended to Neiman Marcus’ offprice stores with greater success, and Emmons has since been able to build beacon capability into the retailer’s official mobile app. This will allow marketing to send more personalised messages to logged in users via beacons in-store.

Neiman Marcus’ biggest success has been Memory Mirror, although again, this was not an overnight phenomenon, Emmons said. The in-store displays record what a consumer looks like as they try on an outfit, allows them to play it back, compare outfits side by side, and share videos and imagery with family and friends.

For 15 months, Emmons said the team worked through the business problems, such as consumer data privacy, before launching Memory Mirror in three stores. Today, 40 mirrors are installed and Neiman Marcus has struck a partnership with eyewear manufacturer, Luxxotica, to extend Memory Mirror’s use to sunglasses.

Not all technology is purely customer-facing, however, and Emmons pointed to the example of RFID tagging display shoes in its stores. The project kicked off after his team discovered just 85 per cent of actual stock was being displayed in-store on average.

By tagging all display shoes, sales associate can quickly scan the department each morning to show which styles are not on display. Thanks to the success of the one-store pilot, stock tagging has expanded to all stores and into handbags, and is expected be rolled out across all departments.

“We’re now in the high 90 percentage range for display compliance, and we can measure the lift in sales that went along with having shoes where customers can see them,” Emmons said. “It’s the perfect innovation project – it has an ROI I can prove.”

It’s not just in-store innovation in focus, either. The iLab has introduced a ‘snap, find, shop’ feature to Neiman Marcus’ mobile app, which uses image recognition to identify an item in a picture and find similar items.

“We’re still working on customer adoption as it’s a different way of search, but we’re excited by the possibilities,” Emmons said. “The next generation of this won’t only be able to find things like the picture, it’ll find the exact thing, tell you the size, designer and so on.”

Through all of these projects, Emmons said adopting a continuous improvement mentality that is accepting of failure is vital. “If you’re doing an innovation lab, be prepared for lots of things that don’t work,” he said.

One of Emmons’ failures was the Fling Wall, a digital signage offering hooked up to an iPad that allowed consumers to experiment with combinations of products on screens in-store. A lack of interaction quickly showed Fling Wall wasn’t solving a real problem, he said.

In contrast, a recent success story has been mobile charging stations across Neiman Marcus stores. As well as keeping customers in-store for longer, these opened up new marketing touchpoints and co-op advertising opportunities.

“From a business perspective, we could prove customers that put phones in the stations stayed longer and had a bigger basket size,” Emmons said. “We also captured mobile numbers and identified those we didn’t know, and put them in a new customer acquisition process.”

While digital technology is promising a whole new store of the future, Emmons stressed the focus for retailers needs to remain firmly on the customer.

“If you focus on them, the store of the future will follow,” he added.

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