Who: Karen Katz, president and CEO, Neiman Marcus
Why: For taking a risk and leading a major organizational change in how Neiman’s brick-and-mortar and e-commerce teams interact.
Neiman Marcus is a luxury retail brand known for $10,000 designer evening gowns and upscale department stores. To me, however, the most fabulous thing about Neiman Marcus is that it made a major organizational change last year around how its store and e-commerce teams interact. The goal of the project — spearheaded by Karen Katz, president and CEO of Neiman Marcus since 2010 — was to meet the needs of the new consumer.
According to a recent Fortune article, Neiman Marcus announced in April of last year that it was merging the planning and buying teams at its stores with their counterparts in the direct-to-consumer business (e-commerce and catalog). This was a radical change for a company that had operated in silos for as long as it has been in existence. Why the change in strategy? Katz understood that Neiman’s way of managing its overall business had to reflect the way its customer shopped — i.e., moving seamlessly between stores and e-commerce.
“We recognized that for our future, and for the way the customer was now shopping, we had to have one point of view,” Katz told Fortune. “All roads lead back to the customer.”
Over the past few years, Neiman figured out how to use merchandise from stores to fulfill online orders, and vice versa, and has given each of its 41 brick-and-mortar locations the ability to use another store’s inventory to fulfill an out-of-stock item. This kind of progress on the tech front is of limited value if the e-commerce and stores teams don’t work in a fully coordinated manner, however.
So Katz made a risky bet that Neiman’s teams would play nice for the greater good. According to the Fortune article, company executives said that while the combined teams are a work in progress, the system is already paying off in the form of rising customer satisfaction scores and more efficient, profitable use of inventory.
Neiman Marcus is also in the midst of spending $1.2 billion on technology over the next five years. As part of this initiative, Neiman is upgrading its $100 million computer systems, representing the single largest capital expenditure in the company’s history.
In addition, Neiman Marcus launched a Shazam-like visual search-and-purchase mobile app called “Snap. Find. Shop” that captures an image taken by a consumer of something she sees out in public and likes, then shows her similar products available on Neiman’s website. The retailer also introduced the “MyNM” dashboard on its website, a big step in Neiman’s efforts to offer personalized shopping tools on a smartphone. Neiman Marcus is also currently testing smart fitting rooms.
All in all, 2014 was big year for Katz and Neiman Marcus. Besides the organizational changes and technology upgrades, Katz also announced that Neiman Marcus will open a 250,000-square foot store in Manhattan in 2018, its first in the fashion mecca. At the time, Katz told the The New York Times that the West Side store would “appeal to a broader luxury and fashion customer.” In addition, “the number of tourists coming through Hudson Yards and the population that will be moving to and living in the West Side of the city will continue to grow,” Katz said. “We’ll be serving those customers.”
Rounding out a busy 2014, Katz joined the board of Under Armour Inc. last year.
I’m sure 2015 will be another great year for Katz.