Wealthy shoppers are developing a habit that's killing Neiman Marcus
Wealthy shoppers have started comparing prices between retailers on everything they buy, and that's hurting Neiman Marcus, according to Karen Katz, the company's CEO.
"There's no question that our core customer is visiting us a little less frequently," Katz told analysts on an earnings call Tuesday. " Customers in general are less loyal to any one retailer and I think a lot of that is because of the price transparency of online. I think that’s here to stay. I don’t think that's going to change."
Katz made the remarks after Neiman Marcus reported an 8% drop in quarterly same-store sales, marking the retailer's fifth straight quarter of declining sales at stores open at least a year.
The company's total sales dropped to $1.08 billion from $1.16 billion one year ago and net losses widened to $23.5 million from $10.5 million in the period.
Price-comparison shopping is a trend that's been around for a while.
Companies like Amazon are making it easier than ever for people to compare prices online by offering tools like barcode scanners, which customers can access through their smartphones and use in stores to easily check prices on specific items.
With that trend now trickling up to America's wealthiest customers, and with companies like Amazon and Walmart now breaking into the luxury fashion market, Neiman Marcus is struggling to set itself apart.
"What the internet has brought to price transparency has impacted how the customer thinks about shopping and where she wants to shop," Katz said. "S he wants to make sure she is getting the right price for the product that she desires."
Neiman Marcus is trying to tackle the issue by offering more exclusive products and " making sure the vendors that we do business with have less of a distribution in the US," Katz said.
The company is also starting to study and understand what millennial luxury fashion shoppers want as they age and become a growing segment of Neiman Marcus's core customers.
Katz highlighted a partnership that Neiman Marcus just launched with Rent the Runway, which allows shoppers to rent designer dresses, as a means of targeting millennial women.
The company is making Rent the Runway dresses available at its store in San Francisco, enabling shoppers to try on and rent dresses from the store.