Niemann Electricity Business Accounted For The High Proportion Instead Of A Burden?

December 20th, last week, high-end department stores in the US

(Nyman Markus) announced a new round of performance report.

Data show that in the first quarter of 2017 fiscal year ending October 29th, the total revenue of the company decreased 7.4% to 1 billion 79 million US dollars compared with the same period last year, and net loss increased from 10 million 500 thousand US dollars to 23 million 500 thousand US dollars in the same period last year, a decrease of 8% compared with the sales volume, a marked increase over the previous quarter's 4.1%.

This is the decline of Neiman Marcus for fifth consecutive quarters.

Then compare its rival Nordstrom (Nodes Tron) to an increase of 2.4% over the same period of sales, and Saks Fifth Avenue (Fifth Avenue), which has a 4% decline in sales compared with the same period last year, is inevitable.

KarenKatz, the company's president and chief executive, blamed the poor performance of the quarter on the new common marketing system and the challenges posed by consumer behavior changes to related businesses.

According to the world clothing and shoe net, Neiman Marcus's failure in cross channel distribution system NMGOne which was put into use in August this year has resulted in the supplier losing important sales data, affecting orders and replenishment of stores and websites.

This has caused the company to lose 30 million to 35 million dollars in revenue.

According to the world clothing and shoe net, in the quarter, Neiman Marcus's online sales reached 315 million 100 thousand US dollars (slightly less than US $315 million 700 thousand in the same period last year), accounting for 29.2% of the total sales.

And this proportion is a very high level in the same industry, even more than Nordstrom who dare to burn money in the electricity supplier (the contribution rate of electricity business in fiscal year 2015 is 20%).

However,

Running fast does not seem to bring any improvement to Neiman Marcus.

Katz said at the performance conference that all aspects of the group's business have been challenged. Not only the frequency of buying by old customers has dropped, but also the US presidential election and low oil prices (its 6 stores in the oil heavy town of Dezhou) and the weakening of the pound, euro and Renminbi against the US dollar and weakening the consumption of international tourists have all contributed to the decline.

"More seriously, the price pparency of online goods is very high.

The core customers of department stores can easily compare prices on the Internet, which makes the service, environment and trial wear of physical department stores lose all their advantages.

Katz points out.

Neiman Marcus, which accounts for nearly 30% of the electricity business, has been hit by this.

In the quarter, Neiman Marcus's online sales had lost growth momentum and could barely be tied to the same period last year.

Competitors Saks Fith Avenue and Nordstrom can still achieve double-digit growth.

It is not hard to see that they are working hard for the electricity supplier business.

But as a high-end department store, it is not so easy to sell luxuries online, it is not enough to set up a website.

For example, online shopping experience of luxury goods is not as good as offline, the online business of all channels has become indispensable, and social media marketing must never fall behind.

All these problems need to be solved in the process of developing the electricity supplier business.

Also tried to drive development with fashionable elements.

Of course, Neiman Marcus is not unaware of the importance of digitalization.

In fact, in the past two years, it has tried a lot of tricks to improve the online shopping experience.

According to the world clothing and shoe net, at the beginning of last year, Neiman Marcus installed "memory mirror" in some stores.

It is a 70 inch screen with a camera on top, allowing customers to control video and photo taking through a iPad.

It records the appearance of customers trying on different clothes, and then displays them for comparison.

Customers can also upload photos to social networks, share them in friends' circles or ask friends for advice.

Prior to that, Neiman Marcus also installed a mobile touch screen system in the store, allowing customers to browse online inventory at the next store, and also made great strides in O2O.

Last August, NeimanMarcus launched a search App with image recognition function.

Consumers can take pictures of the objects that they see around you, and then find the same or close to the purchase recommendation of photo products through the App website at Neiman Marcus, so as to achieve the experience of "visible and available".

In addition, in order to attract more vogue consumers, Neiman Marcus has launched a series of joint ventures with supermodel Kendall Jenner and sister Kylie Jenner this spring, covering all kinds of sexy fashion costumes, and has adopted the exclusive sale of products on Neiman Marcus website.

However, all this is still not able to withstand the decline.

In order to reduce operating costs, NeimanMarcus has to take measures such as layoffs and salary cuts. In recent quarters, it has begun to focus on refund orders and raise the inventory level of suppliers, and has launched more discount promotions.

In addition, the company also once fell into a wave of sale that would be sold at a discount, and the IPO plan had to be shelved.

Faced with sustained losses and declining sales, Neiman Marcus had to re-examine its strategy over the past decades and seek fundamental changes.

According to the world clothing and shoe net, Katz said in a conference call after last week's earnings report that consumer spending habits have changed, and the number of customers visiting the core is declining, and the decline in customer loyalty has become a common problem in the retail industry.

In response to these disadvantages, Neiman Marcus has also begun to adjust.

Katz pointed out that for example, few consumers now buy anti season goods (i.e. winter sandals and summer cotton padded clothes), so the company will introduce more "ready to wear" seasonal products.

At the same time, NeimanMarcus's inventory had been cut by 1.9% at the end of last quarter, but in order to keep pace with the sales trend, it may be further reduced in the future.

In addition, it found that consumers are very interested in some fresh and interesting products, such as velvet shoes, sports shoes with technology shoes, exclusive LovetoGive gift boxes and NeimanMarcus's own brand foods.

Therefore, adjusting the product structure to conform to this trend is also the next key direction of Neiman Marcus.

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After in-depth analysis of various types of target consumers, Neiman Marcus also realized that the "millennial generation" will be the most potential consumer group.

As a result, it will reduce its dependence on older consumers and turn to the new millennium format to attract the millennial generation. It plans to divide the group into subgroups, pick out brand names that are favored by the crowd, and keep them by providing exclusive products.

Moreover, NeimanMarcus currently sells more than 40% of its exclusive products at a price below $500, which is in line with the consumption level of this target population.

According to the world clothing and shoe net, in order to win over young consumers, last month, Neiman Marcus also cooperated with the online rental website RenttheRunway, who opened a dream closet rental store in the NeimanMarcus San Francisco flagship store with an area of about 230 square meters.

This has also led to a marked increase in sales of Neiman Marcus within a few weeks.

As these new customers rent their dress, they usually go to other floors to buy matching shoes, handbags and so on.

After tasting this sweetness, Neiman Marcus said that more Rentthe Runway stores will be set up next year.

It hopes to attract Rentthe Runway's main customer group (the average age of the member is 29 years old, with a certain economic strength) to the store, and then use styling suggestions and convenient delivery services to allow them to "buy" other products by the way.

In addition, there is also news that Neiman Marcus will further expand its overseas market.

In addition to paying more attention to the European luxury electric business Mytheresa, which was acquired in September 2014, it will open up neimanmarcus.com's overseas business, and will not rule out moves in the powerful consumer market.

Of course, whether these self-help measures can play a role remains to be verified by time.

But anyway, Neiman Marcus's efforts to find a way out are still worthy of recognition. Let's wait and see.

More interesting reports, please pay attention to the world clothing shoes and hats net.