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Expanding Net: Neiman Marcus Online Sales to Top $200M

Neimanmarcus.com is the driving force behind NM Direct, the e-commerce and catalogue division of Neiman Marcus Group. Here’s an update

The online merchandise array resembles a highly edited version of the fashion and home furnishings in a Neiman’s store. The company at first tried to put an entire virtual store online, but discovered it was confusing for the customer and too costly to photograph and warehouse. So the number of stockkeeping units has been whittled down over the last two years to about 10,000.

Online bestsellers mimic those in stores, led by shoes, handbags and contemporary sportswear. Top handbag collections, for instance, are Gucci, Prada, Kate Spade and Burberry, and the site had an exceptional response to the launch of Luella Bartley this spring.

“Price point is not an issue online like it is in the catalogue,” Hoffman said, noting the average online sale is 25 percent higher than through the catalogue.

One of his big pushes online is to sell more designer clothing — the site’s fastest-growing category. Neimanmarcus.com launched Narciso Rodriguez successfully this spring, and Armani Collezioni will debut this fall. The site currently sells 19 designer clothing labels, including Roberto Cavalli, Chloé, Donna Karan, Etro, Marc Jacobs, Michael Kors and Ralph Lauren Black Label.

“It’s taken some time to get vendors to feel comfortable,” Hoffman reflected. “There was a perception that the Web was discount and concern that it would reflect their brand and Neiman Marcus’ image. Now they are comfortable because they can see the business they can do. In many cases, it’s their number one store.”

Aeffe USA does a substantial business with NM online with Jean Paul Gaultier, Moschino Jeans and Moschino Cheap & Chic, and is developing sales of Narciso Rodriguez and Alberta Ferretti.

“The business has grown considerably over the past couple of years,” said Michelle Stein, president of Aeffe USA. “None of the other stores has pushed their online business to the extent that Neiman Marcus has. If the last few seasons are any indication, there is no stopping it.”

Neiman’s had expected the Web site to cannibalize some business from its 50 annual catalogues, which happened at first. But in the past nine months, the traditional mail-order business has strengthened.

“We are having double-digit growth in the catalogue, and six months ago I would not have been able to say that,” Hoffman explained. “The catalogue business is such an important driver to the Web site you won’t see us pull back there. The two channels coexist nicely and reinforce each other. We clearly see an uptick on the Web based on when we mail.”
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