A Marriage of ….
….certainly not one of love. Who is leading who? With American department stores trying to hang on for dear life, is a marriage of two luxury behemoth the right strategic move?
If you’re caught up in the latest in luxury retail, the biggest headline and the most profound shift happening is Saks Fifth Avenue’s takeover of Neiman Marcus for $2.65 billion.
As a long time veteran and merchant of Neiman Marcus, this hit me in ways I didn’t expect. It has perpetuated lots of conversations amongst us alum from what we coined as the ‘EXTRAORDINARY days of NM’.
Lots of what now? How did we get here?
Swallowing a pill of pride, and a re-emergence of heartbreak.
My tenure at NM was filled with sage wisdom working along side visionaries such as Stanley Marcus, Burt Tansky, Robert Ackerman, Sandy Marple, etc. We were groomed from day 1 through tough yet formidable education on how to analyze businesses, grow our businesses, the importance of our stores and how to partner with our department managers, manage our supply chain, and most importantly, the mantra that nothing is too much for our customers.
I always found myself working within an umbrella of niche founders and creative designers — charged to nurture their growth as a bridge between the stores, customers, the marketing team,operations, and ultimately exceeding our financial goals. Many of these niche founders and brands under our helm became household names. It shaped me as a merchant, marketer, business strategist, an intrapreneur, and my deepest respect and passion for founders and creative designers. I suppose that is why I am so passionate working with early stage founders and businesses.
Reflecting on what transpired with a former merchant, we talked about the EXTRAORDINARY DAYS : robust business, customers were filled with wonderful and out of this world requests, and magical buzz in the stores — especially during one of a kind events we use to host. But more than anything, it is the life long friendships and relationships built that are so special.
So, how did NM get to where they are today?
Similarly to The Body Shop. Read my article here.
Follow the money ...the point where NM lost its description as a luxury SPECIALTY retailer, and became a luxury department store is the gap and inflection point that gives clues as to how NM arrived to where they are today. Each time NM changed ownership, it diluted their brand equity, their magic, their unmatched culture built upon from decades of harmony between clients, merchants, and the EXTRAORDINARY – where we were called to start thinking where most stopped.
Why am I sharing this? How does this affect you, as a brand founder?
Whether your goal is to partner with Saks Global ( Sak’s Fifth Avenue + NM + BG), or not, this merger shifts the dynamics between retailers, brand, DTC, and ominichannel — whether you are a luxury brand, emerging luxury brand, or early stage luxury brand.
With Amazon and Salesforce joining the cap table as minority investors,this means, Saks Global is strategically laser focused on supply chain, customer data, leaning on tech and digital to enhance the customer experience online and in store. How? What will that look like? Time will tell…
Brands partnered with now, Saks Global (Saks’+ NM, and/or BG), will lose negotiating power and pressured to perform, otherwise, lose positioning and points of distribution. With this kind of uncertainty, brands will focus again on their DTC channel ensuring they are providing the best in class customer experience, become intentional with their other retail partnerships making sure they are optimised with one of a kind and intelligent activation — synthesizing a mutually beneficial partnership. A reawakening that it is the brand’s duty to do the heavy lifting — getting into the retailer is the easy part.
Customer experience at every touchpoint becomes more important than ever. No matter if you’re an indie brand, early stage brand, masstige brand or prestige luxury brand — all brands will need to look at their own DTC strategy and ensure they are full optimized and have a strong brand loyalty program in place. New customer acquisition and nurturing customer loyalty will be top of mind — knowing they can not rely solely on retailers. — especially for those that may not meet the new threshold at Saks Global.
This is a wake up call for brands. What we are focusing on with our clients is to ensure their 360 degree brand equity is stronger than ever, website is optimized, strong digital marketing and marketing strategy with room to pivot, and retail partnerships are mutually beneficial with a meaningful and robust strategy in place. Constantly looking at metrics and KPI’s that will move the needle toward our growth goals with an assumption that this shift is in motion, and the dust hasn’t settled.
If we can be of service,we are here to help. Send us an email here.
To your success xx
artist: Rene Magritte | The Lovers