Expanding Net: Neiman Marcus Online Sales to Top $200M is the driving force behind NM Direct, the e-commerce and catalogue division of Neiman Marcus Group. Here’s an update

Neiman’s also is benefiting from the overall expansion of e-commerce. Shoppers are becoming more comfortable with online transactions and the proliferation of broadband connections makes it faster, noted Graham Mudd, an e-commerce analyst with ComScore Networks in Chicago.

UBS analyst Linda Kristiansen described Neiman Marcus’ online direct strategy as “proactive.” Moreover, the retailer is a well-positioned player in the market.

“Direct used to compete a little with the stores,” Kristiansen said. “Now, I think the whole business is trying to be synergistic.”

So how viable is the channel for the company in the long term? “I think it’s a channel I don’t see peaking any time soon for anyone,” Kristiansen said. “We went through this period when the Internet was kind of out of favor. But the strongest players have turned out to be those with a catalogue operation. Neiman is ideally positioned.”

The company is working to build synergy between the stores, its catalogues and the Web through a showroom in Neiman’s stores that displays linens and furniture sold through the Neiman’s and Horchow catalogues and Web sites. Sales associates are on hand to help shoppers.

After one year in business, the 2,000-square-foot Showrooms within Neiman’s stores in Plano, Tex., and Oakbrook, Ill., have been so successful that a third is planned to open in the store on Michigan Avenue in Chicago this month and Katz plans to add the showrooms to more stores.

In addition, a stand-alone showroom will be tested next to the Neiman’s in Scottsdale, Ariz., beginning in June. “If it works, it will give us the ability to go into a lot of new malls,” Hoffman pointed out.

The division relaunched its Neiman Marcus home collection last fall with more merchandise, including furniture. Surprisingly enough, the Web has sold $11,000 sofas, a $5,000 leather sectional sofa and a $2,129 mirrored buffet.

Neiman’s hopes to further build its catalogue business with the reintroduction of a children’s version this spring and plans for its first ever men’s apparel book for holiday or spring. Hoffman, a former divisional merchandise manager of men’s wear at Bergdorf Goodman, got the idea from the success of men’s apparel online, which is growing at a faster rate than the overall pace of the site. Even if the men’s catalogue is not profitable, he believes it will lure men to the Web site.
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