Neiman Marcus unveils youth-centric Luxe Lab
Neiman Marcus is bringing a new, youthful space to select stores and online. “Luxe Lab” will feature the work of a dozen emerging fashion designers, the company said in a press release emailed to Retail Dive. The physical stores are Ala Moana, HI, Atlanta; Austin, TX; Boston; Coral Gables, FL; Fort Lauderdale, FL; Houston, King of Prussia, PA; NorthPark, TX; San Diego; Troy, MI; Las Vegas, Westchester, NY and Washington, D.C., the company said.
The in-store boutiques will include “must haves” from the likes of Atlantique Ascoli, Figue, Francesco Sconamiglio, Galvan, Libertine, Magda Butrym, Mr & Mrs Italy, Nour Hammour, Pascal Millet, Simone Rocha, Stouls and Talitha, the company said. For Talitha, Stouls, Magda Butrym, and Francesco Scognamiglio, the boutiques represent the first major brick-and-mortar retail offering of their designs, according to Neiman Marcus.
The styles are aimed at younger customers, a demographic that the department store has also been chasing through its partnership with Rent the Runway, which launched last year. “Luxe Lab is a curated collection of distinctive pieces from new, niche brands that speak to our customer's relaxed lifestyle,” Jim Gold, President and Chief Merchandising Officer of Neiman Marcus Group, said in a statement emailed to Retail Dive.
The new project is another attempt for the department store retailer to spur sales and engage with a younger demographic while it wades through financial troubles, including a debt load that has reportedly chased away potential investment.
The department store segment is an especially challenged area in retail. Moody’s Investors Service singled out department stores at the start of the year and again mid-year as vulnerable to maturing debt and stressed competitive position. Part of the problem lies in their older customer base. In addition to Neiman Marcus, Macy’s and Nordstrom have worked to partner with brands and designers to appeal to younger people, many of whom actually prefer to shop in physical stores, especially for apparel.
Nearly all Gen Zers (a whopping 98%) frequent stores to find what they’re looking for, with some 67% shopping in physical stores “most of the time,” and another 31% doing business there “sometimes,” IBM found. They desire the curation that stores offer, and they want to talk to associates. In fact, 28% of Gen Z shoppers are likely to ask a store associate for advice, compared to an average of 21% across all other demographics, according to research from Euclid Analytics.
The average age of the Neiman Marcus customer is 51, and the department store has a luxury reputation with prices to match. Although members of Gen Z are more likely to consider luxury purchases than slightly older millennials, many of them are still young enough to be depending on their parents’ allowance. It’s actually Baby Boomers, and the small cohort of Gen Xers, who have money to spend.
“Older consumers have significantly greater financial power and, in aggregate, spend significantly more than consumers under 35,” according to a 2015 in-depth Forrester Research report, which also noted that in 1973, households of people over 55 drove 25% of shopping spend and by 2013 drove 35%. In fact, younger shoppers will become an important spending demographic — when they age.
“While consumers in their early 20s have the lowest average household incomes, as those consumers age into the next cohort (25 to 34), they see their incomes rise significantly,” Forrester said. “Over the last forty years, shoppers over 35 consistently control 70% or more of all shopping spend.”
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