Case
Neiman Marcus Attempts to Attract Teens
Neiman Marcus and YouTube? The high-end retailer, known for catering to customers of a certain age and income, might be considered an unlikely candidate for an appearance on the Internet site that is dominated by youth. But that’s exactly what Neiman Marcus did to promote its 100th anniversary. Its marketers created a video showing off the store’s latest styles, and they admit the move was a little unusual given its traditional clients. But that’s the point: the retail chain wants to open its doors to teens. The store still represents a luxury brand, but Neiman Marcus is determined to attract teen consumers because they eventually will become adult consumers with more money to spend. If Neiman can nab teens now, get them interested in its luxury goods, and turn them into loyal customers, they are less likely to drift off to a rival later in life. Thus the leap to YouTube. “Like with anything, you hear people in meetings say, ‘Did you see the thing on YouTube?’” explains Ginger Reeder, vice president of corporate communications for Neiman Marcus. “And if it starts to permeate our consciousness, we can only assume it’s in our customers’ as well.”
Each generation has its own idea of what luxury is, so Neiman Marcus is making an effort to identify the preferences of the next generation even as it serves affluent customers who are middle-aged. The firm has already launched a chain of stores called Cusp, targeted at younger consumers, and is tracking their progress closely. Located in well-to-do areas such as Los Angeles, Washington, D.C., and suburban Chicago, these stores are stocked with trendy, casual clothing at slightly lower prices than consumers might typically find at Neiman Marcus stores. The atmosphere is less formal than the chandelier-laden traditional stores; in fact, the Cusp store in Los Angeles features displays made of artificial tree branches and twig fences. And while Neiman Marcus promotes heavily through its famous catalog called The Book, the Cusp boutiques are marketed online. Still, although the Cusp stores don’t bear the Neiman Marcus name, shoppers can use their Neiman credit cards there.
According to Ginger Reeder and other Neiman marketers, YouTube and other such outlets are a logical step. “[Neiman Marcus] is making a concerted pitch, strategic pitch to young people to say, ‘We’re not your grandmother’s store—we’re your store too,’ ” notes one consultant in the luxury retail market. The YouTube pitch wasn’t cheap. Purchasing the homepage space for a single day cost about $250,000. But considering how many young people might view the video, the price could be a bargain.
Although estimates of teenage spending vary widely, Teenage Research Unlimited says that consumers between the ages of 12 and 19 spend about $180 billion a year. “[Teens] don’t have mortgages to pay, and they don’t have rent,” explains an industry watcher. “They have disposable income.” Luxury items such as designer jeans, handbags, shoes, and sunglasses that celebrities wear are particularly popular. Neiman Marcus is happy to supply these items to young consumers. Using video to reach them and tell them about these products makes sense. “What people really wanted to see is merchandise,” says Ginger Reeder of the YouTube video. “But they’re also looking to us [to see] what’s hot, what’s trendy. One way to get that across is through . . . those videos on YouTube. You can see them on our site, but you may have a whole other audience that sees them on YouTube.
1. How might the introduction of Cusp stores and the YouTube video affect Neiman Marcus’s brand equity?
2. Describe Neiman Marcus’s distribution strategy.
