After an extended search for a new president at Bergdorf Goodman, New York City’s luxury shopping mecca, Neiman Marcus Group just announced Darcy Penick will take the helm on September 4. Penick will replace Joshua Schulman, who jumped ship to become brand president of Coach in April 2017.
Penick joins Bergdorf Goodman after serving in various positions at Amazon’s fashion subsidiary Shopbop since 2009, culminating in being named CEO in 2015. While Shopbop is luxury fashion, it is Amazon, after all.
At first blush she seems like an untraditional choice for a world-class department store deeply rooted in physical retail and personal customer service. Even though Penick started her fashion career in 2000 as a buyer for Neiman Marcus, followed by Bergdorf Goodman then onto Saks, her senior management credentials come from the e-commerce side of retail.
That digital expertise is exactly what NMG’s Geoffroy van Raemdonck was looking for. Rather than a traditional luxury retail merchant, van Raemdonck is focused on his company’s “digital transformation” in order to “accelerate global growth at Bergdorf Goodman,” as stated in the announcement.
Future direction for the company
Upon assuming his CEO position at NMG earlier this year, van Raemdonck announced his plans for the company and that future was digital. He wrote:
The unprecedented change in our industry requires us to reimagine how we serve customers and drive growth. Digital technology has already had a fundamental impact on the way consumers experience brands and shop. Yet, we are only at the beginning of what will be a tectonic shift. To reach a new era of growth, we’re doubling down on innovation. To start, we’re remaining completely focused on being digital-first. Our customers don’t care about channels; they care about being able to engage and shop anywhere, any way, at any time.
Given Penick’s expertise, Shelley E. Kohan, of the Fashion Business Management Program at Fashion Institute of Technology, believes Penick is a brilliant choice for the company’s digital-first strategy.
“Her background is a great combination of physical and digital. The functional expertise to drive growth in the digital age include many areas where Ms. Penick has proven success including digital marketing, global expansion, customer experience, branding, building loyalty, along with the core elements of merchandising and operations,” Kohan believes.
“Growing the digital areas of the business will reach beyond the scope of increasing the e-commerce business, but should include more digital content, higher engagement through robust social media platforms and digital content that more closely mimics the store experience through the use of AI and machine learning,” Kohan states.
Kohan also applauds the selection of a woman to lead one of the most important luxury fashion brands in the world, where she will join a very select group in such leadership roles. Penick’s inclusive-leadership style will be a critical asset to Bergdorf Goodman, as success in the new world of retail requires intense collaboration with vendors, brands, suppliers and technology partners, which was not necessarily needed when the old wholesale-to-retail business model was in place.
“The rise of digital runways, vendor collaborations and curated content are all areas that can drive Bergdorf Goodman into a synergistic business model and Ms. Penick is the one to lead the charge,” Kohan affirms.
What would Mr. Stanley Marcus think?
Numerous reports state that van Raemdonck intends to grow sales digital sales at NMG from its current 35% to a 50-50 split between stores and online. That is a tall order when most analysts expect online to account for only 20-25% of retail sales in the foreseeable future.
I wondered what Stanley Marcus, son of Neiman Marcus’ cofounder Herbert Marcus Sr. and a famed hands-on, boots-on-the-ground retailer and author of Minding the Store, who passed in 2002, would think of his company’s new direction.
In a prescient interview from 1987 with Inc. Magazine, Mr. Stanley, as he was fondly called, railed against retailers’ reliance on computers to make merchandising decisions:
Buyers are almost exclusively computer oriented, less in touch with suppliers and customers, and much more in touch with the quarterly bottom-line numbers that inspire public-company managers. There are good reasons why public companies behave this way, but they don’t have anything to do with serving the customer well–and that is really where the excitement is in retailing.
Mr. Stanley went on to state why being present with the customers, not just looking at computer screens and big data, is where success or failure in retail is measured. “You learn something from your customers that you can’t learn anywhere else. You learn whether they’re happy and satisfied. You learn not only what they bought but what they didn’t buy –and why,” he said.
“You learn what they came in expecting to buy and expecting to pay. I haven’t seen a computer yet that can tell you all that,” he continued. (Note: Spend a few minutes reading the “Merchant Prince Stanley Marcus” interview on Inc. You will be greatly rewarded.)
While Mr. Stanley may have been leery of computer-led retailing (“It’s like an addictive drug. You become hooked on numbers to the point that you neglect your products and your people.”), NMG has been ahead of the curve in adopting technology in luxury retail.
“Neiman Marcus and Bergdorf Goodman have always been on the leading edge in database management and surgical segmentation of their customers, the first in providing immediate online access to service and sales associates and pushing the envelope on the catalogue business,” explains Greg Furman, founder of The Luxury Marketing Council, who served as marketing strategist for Bergdorf Goodman from 1990-1994 and who calls Mr. Stanley “a beloved mentor.”
Integrating technology into the fabric of 21st century luxury retail is the call
On the shop floor, Bergdorf Goodman has got the in-store experience, customer service, associate training and luxury merchandise assortment nailed. Where it needs to bridge the gap is in customer-facing online engagement and sales, which as Furman notes, luxury retail has been notoriously slow to adopt. “One of their biggest challenges will be the integration of all selling channels, and the continuing personalization of the buying process online,” he says.
FIT’s Kohan believes that Penick has the right stuff to realize BG’s digital transformation. “Her laser focus, breadth of experience, and keen eye for curated product assortment will be a strong asset for Bergdorf Goodman and NMG. Ms. Penick can deliver digital transformation for the more than a century-old department store,” she states.
Furman is also convinced that Penick will bring the same kind of customer-first, customer-led, customer-focus online as Bergdorf Goodman does for its patrons at NYC’s 5th Avenue flagship. It is in the company’s DNA to succeed where others may have failed.
“Recent reportage has used the words, ‘in an attempt to refocus internet sales…’ regarding this appointment,” Furman says. “Having run marketing for Bergdorf Goodman, I am compelled to object. This organization–Neiman Marcus/Bergdorf Goodman and management–never ‘attempts,’ they strategically focus and succeed.”