Sometimes cross-channel consistency isn’t the answer, Neiman Marcus says
Cross-channel consistency is one of the most frequently heard exhortations in online retailing today, but there are times when consistency can work against a retailer, Michael Crotty, vice president of marketing at the Neiman Marcus Group Inc., told the eTail conference this week.
For instance, high-end linens are big sellers at NeimanMarcus.com, yet the stores don’t stock them. Similarly, the store and the web sites are big sellers of beauty products, but such products do not appear in the catalog. And while Neiman Marcus definitely caters to the couture crowd, the web site has been paring high-fashion apparel that experienced high returns because of the vagaries of sizing and also is paring back certain fashions and designers on the web. “We are extremely independent,” Crotty said. “We think of ourselves as our own store.”
That separation creates its own challenges, however. For instance, buyers accustomed to buying for stores have to change their thinking in terms of products and quantities, Crotty said. “We have to train the buying organization to buy differently for us because of the power we have in moving a lot of merchandiser fast,” he said. “We can move more units than any store and we are the number 1 seller in certain categories.”
One area where the stores and the web site are working in concert is in clearance items. Crotty said. Two years ago, the web site didn’t sell any clearance items. Today, it does a regular business in sale items, just as in the store.
In addition to selling different merchandise, the web site attracts a different customer. Half of NeimanMarcus.com customers do not shop at Neiman Marcus stores because they don’t live near one. Further, the number of new NeimanMarcuis.com customers coming through the catalog has tapered off to 50% now, with the other 50% of new customers coming through search or navigation on the web.
Nonetheless, Neiman Marcus cross-promotes channels. For instance, every catalog promotes the web site by showing web merchandise related to catalog products and encouraging customers to view the broader selection on the web. It also undertakes a lot of direct mail promotions of the web site deigned to collect e-mail addresses. It send cards to customers inviting them to bring the card to a stores for a free gift or a discount. Part of the information customers are asked to provide when they redeem the card is an e-mail address. “Collecting e-mail addresses is extremely important to us,” Crotty said. “We want e-mail addresses to drive people to the site.”
Neiman Marcus expects to drive more web traffic later this year when it will allow customers to redeem loyalty points online. Right now, they can check their balances online but not use the points online.
With the web growing in importance, NeimanMarcus.com executives decided it was time to improve site search functionality. That was driven home when the company heard from a customer that she had searched the site for pink handbags and the results displayed a cookie with a pink handbag on it. “It was an eye-opener that told us we had a long way to go to improve search,” Crotty said.
Last fall, Neiman Marcus installed site search from iPhrase Technologies Inc., which features natural language search and the ability for customers to navigate through search results.
Before the improvement, 60% of customers who used search never went beyond the results page. Today, that rate has dropped to 5%. Further, the program always returns results; customer never get an “Item not found” message. “We’ve had dramatic improvement,” Crotty said, adding: “We really had no way to go but up if you searched for pink handbag and instead got a pink cookie.”
The importance of site search is a reflection of the growing maturity of the web and the increasing online tenure of web users. “Web customers have changed a lot in the last couple of years. Search is a big part of their life on the web. So when they come to a shopping site, they want a good search function,” Crotty said.
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