This week Neiman Marcus unveiled its 91st "Christmas Book," a catalog of lavish gifts, including outré items like pampering in Paris, special-edition Rolls-Royce cars and New Year's Eve at the Knickerbocker Hotel in New York.
The department store took care to note, however, that of the 780 holiday gifts in the catalog's 300 pages, almost half are priced under $250, that the least expensive is $9 and that proceeds from some of the higher-ticket items will go to charities.
The department store, which is also celebrating its 110th anniversary, first published its Christmas book in 1926 as a 16-page pamphlet sent as a Christmas card to the store's best customers.
Neiman Marcus' holiday catalog has long been a fantasy exercise for shoppers, the butt of jokes for comedians and the object of scorn in some quarters, with items like its $66 collard greens last year.
As with many retailers this holiday season, the print catalog is still a powerful marketing vehicle — being physical, immersive in their content and not quite as easily disposed of as email marketing. There's also a place for the Neiman Christmas Book as a seasonal topic of discussion, according to Jim Fosina, CEO of Fosina Marketing Group.
There are consumers in big cities like New York, Los Angeles, Chicago, Miami and Dallas with posh enough lifestyles to consider some of the book's ideas, while others can at least gawk at — or aspire to — that, he said. "There will always be a market for high-end luxury items featured in the Neiman Marcus Christmas catalog," he told Retail Dive in an email. "In fact our sense is that many will keep the catalog around as a coffee table addition to their holiday decor in their homes and apartments. It has always been a conversation starter …'who buys this stuff?' in our house."
While Neiman Marcus still does have those high-flying customers, it behooves the struggling retailer to appeal to customers with more down-to-earth items — and prices.
"My guess is that the limited pages that feature gifts under $250, $150 and $100 are the most effective and proficient," Fosina said. "It's not that the consumer doesn't like 'nice things' — it's that they want 'nice things' at prices and values that are easy on their pocketbook. That's where the bulk of the profitable consumers in this market live these days."
If Neiman Marcus wants to play only in the top end of the market, it needs a much smaller operation, he said. "The Amazon universe of buyers is having a HUGE transformational impact on the square footage of all sorts of stores and entities. If [Neiman Marcus] still wants to hold on to its 'luxury brand, high price mix' of products, it is much better off to appeal directly in the markets and sectors where this consumer segment resides, in a much more direct and smaller footprint, customer-facing way."
Last month, Neiman Marcus posted its 10th straight quarter of declines, though it managed to narrow its losses, with certain categories gaining traction. The retailer continues to trim its off-price portfolio — one of the best performing areas of retail generally — and will shutter another 10 stores to present "a more focused Last Call footprint and a more compelling experience in the off-price category," CEO Karen Katz told analysts.
The retailer's scaling down of its off-price operations may reflect a move to underpin its reputation as a luxury department store, and its digital strategy could help that a lot, according to Chris Paradysz, CEO of PMX Agency. But its nearly $5 billion debt burden (and counting) has added to the woes of the declining luxury department store, getting in the way, for example, of takeover talks with Hudson Bay Co. earlier this year.
It's become something of a vicious cycle for the department store, which is operating in a particularly challenged area of retail as more specialized retailers continue to grab market share from their departments.