The mind behind the Neiman Marcus iLab explains why tech is so critical

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These may not be the best of times for luxury and fashion retailers, but that hasn’t stopped Neiman Marcus from elevating technological innovation into a core value. The iconic Dallas-based department chain is pushing ahead with its iLab project, aimed at propelling the chain into technological leadership among retailers.

Overseeing that critical project is Scott Emmons, who arrived at Neiman Marcus as a consultant on a two-week contract 13 years ago and was tapped to lead the Innovation Lab in 2012. Under his tenure, Neiman Marcus’s iLab has become a technological talking point for the department store industry.

Emmons’ devotion to IT is helping steer Neiman Marcus into a brave new world of technological innovation that was hardly being considered just a handful of years ago. It hasn’t been simple. Emmons recently discussed his take on the past, present and fast-evolving future of the iLab at Neiman Marcus with STORES contributing writer Bruce Horovitz.

Technologies from tech wizards like Amazon.com are challenging conventional bricks-and-mortar retailers like Neiman Marcus. Is iLab your attempt at revenge — or survival?

I don’t know if I’d put it in terms of survival. When I first started here 13 years ago, we had a log of backend IT systems stuff for inventory and reporting systems. Tech was on the backend, but when you looked at what was in the store facing the customer, there wasn’t very much.

When I first started, that was OK because that’s how retail was done. But starting about the same time as the iPhone, the need for tech in retail has just blossomed. It feels like it’s happened almost overnight. Customer tech was a piece of the puzzle that we were missing and we needed to get a lot better at it. That’s where the iLab was born.

Before iLab, I spent five years modernizing how we did data. I was a champion for that. About five years ago, I decided that innovative technology should be part of our skill set and I was asked to step in and do that.

Starbucks has used technology to lap the fast-food competition. Is Neiman Marcus trying to do the same in retail department stores?

In their space, Starbucks has used technology as a piece of the puzzle that really resonates with customers — especially what they’ve done with their mobile wallet. If you were to ask, “What is the most common form of digital payment?” the answer would actually be Starbucks. They have the most used mobile wallet out that’s out there — even larger than Apple Pay.

It would be fair to say that we see technology in that same way, as well as a contributor to the overall customer experience. But we also have to have great products and great sales associates. Technology is just one of the table stakes pieces.

Many major marketers, from Nike to McDonald’s, have snazzy new product innovation labs that push them forward. Is that essentially what iLab is, but with the use of new technologies instead of with new sneakers or burgers?

I think it’s a little different. Innovating on the product you sell is one piece of the business. That’s not my piece. What I’m focused on is innovating the customer experience. We leverage technology to make it a better experience for the customer.

How did the iLab come to be?

It was the concept five years ago of our former CIO Michael Kingston, who left about one year ago. One of his first initiatives was to do the Innovation Lab and I got tagged to head it.

I had to decide: What is a tech lab about? Is it backend innovation, or something else? I decided to make it customer-facing technology. It’s all about, “How can technology help our customers?”

How did you sell Neiman Marcus CEO Karen Katz on this?

We started looking for examples of things we never tried before to make the customer experience better. After spending two to three months building a collection of six to seven interesting pieces of technology, we invited our CEO to come critique what we’d done.

This could have gone really well or really badly. It turns out, it went really well. She was pleasantly surprised and keenly interested in pursuing some of the technology and getting it out in front of the customer. The iLab was officially born at that point.

Can technology turn around a century-old brand?

Innovative technology is not a silver bullet that will save the world. It is a piece of the puzzle that has to be put together when you are trying to deliver what the customer wants, how the customer wants it. Yes, it’s a critical piece of the puzzle, but it’s just one piece.

There’s an inherent problem with technology development: Once it’s out there, it’s already dated. How do you avoid creating technology that’s dated when it hits the shelf?

It’s tricky. We haven’t always been successful with that. When we decided to build our digital wallet and support our own private label card, we started with state-of-the-art technology. By the time we delivered it six months later, it was stale. We were delivering a QR code wallet and the world had moved on to touchless payment. We had to pull the plug.

It was a learning experience and there are lots of things in our lab that are that. We try more things that don’t work than do work. I’d say only 10 to 15 percent of the things actually end up in the store.

What’s the coolest thing to come out of the iLab?

Hands down, it’s the Memory Mirror technology. The original concept, three years ago, was a digital mirror that you stand in front of and twirl and it takes eight-second videos of you spinning. When you play it back, you see yourself at all angles. You don’t have to ask your husband or girlfriend or a sales associate how it looks in the back. You can see for yourself.

You can build up a library of try-ons and compare side by side. And at any point, you can share your videos with yourself or send to whoever can’t be with you in the dressing room — but you want their opinion. You can share it on Facebook or Instagram, too.

Has it expanded?

We now have 38 fashion Memory Mirrors in 20 stores. I knew this was a great platform. … You’ve got 1,000 years of mirror technology that didn’t change. Now, we finally added new and useful capabilities to a simple mirror. There are a lot of opportunities out there.

What’s the next coolest thing you’ve done?

I’m pretty happy with our use of Theatro technology. It’s a voice command communicator — a sort of wearable computer — that allows associates to talk to any other associate in the store. Someone in the back of the house can talk to someone in the front of the house instantly.

Any other new technology that you’re jazzed about?

Charge It Spot has been an amazing partner. I got a note from our CEO about these portable phone charging stations. This solves a real problem for the customer, which is the first thing we think about. It’s a way to charge your phone while you’re shopping. The return on investment for us is a chance to engage customers.

It’s now in 30 stores. Most stores have one unit and some have two — with eight charging compartments in each unit. It’s only been deployed since November, but already has more than 50,000 charges. That’s pretty impressive.

Are there privacy issues involved with all of this new technology?

There are anonymous things we can collect about a customer that are non-intrusive. But as soon as something is personally identifiable, we have pretty strict rules. It has to be opt-in. A customer must give us permission to collect information. That’s the way you stay out of trouble.

Do you have specific statistics or data to share on iLab’s success?

In the luxury fashion business, customer experience is a big part of ROI. That’s why customers come to us to shop. They want a white-glove, awesome experience. iLab has certainly been successful in raising the bar in how Neiman Marcus does technology.

What’s next?

I’m very interested in chatbots. That’s this year’s buzzword: artificial intelligence and chats. You’ll see experiments in that from us — and others — over the next year. And we’re talking about augmented virtual reality, but it needs to reflect the high-end merchandise we sell.

Will robots replace your salesforce at some point?

Our sales associates are a crucial part of our relationship with customers. I’m not looking to replace associates with robots.

What tech toys do you personally use?

A lot. I have Amazon Alexa, Google Home. Siri. Lots of smart home stuff that turns on the lights and smart thermostats. I have a pool that I can control, talk to and see when I’m not home. I’m fascinated with smart home stuff. I have a smart watch. I’m willing to try just about anything with tech, which is one reason I have this job.

Did you have a Robbie the Robot when you were a kid?

I did not. I grew up in a home with two parents in information technology. They would sit around the dinner table talking about data processing. I swore to myself as a kid that I would never do that. But I ended up loving it.

Bruce Horovitz, a freelance writer, is a former USA Today marketing reporter and Los Angeles Times marketing columnist. He can be reached at brucehorovitz@gmail.com.

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