Neiman Marcus 2013 Annual Report Download - page 8

Table of Contents
markets. Trunk shows and in-store promotions at our Neiman Marcus and Bergdorf Goodman stores feature a variety of national and international vendors
such as Chanel, Prada, Tom Ford, Lanvin, Oscar de la Renta and Christian Louboutin.
Neiman Marcus and Bergdorf Goodman’s social media platforms include blogs, Twitter feeds and Facebook pages. Social content includes insider
fashion news, designer profiles, product promotion, customer service and event support. Posts and replies to customers are updated multiple times per day.
Each platform is designed to reinforce our position as a fashion leader as well as to highlight the expertise and insider knowledge of our fashion directors and
merchants.
Through our print media programs, we mail various publications to our customers communicating upcoming in-store events, new merchandise
offerings and fashion trends. In connection with these programs, Neiman Marcus produces The Book® approximately eight times each year. The Book is a
high-quality publication featuring the latest fashion trends that is mailed on a targeted basis to our customers and has a yearly printing of approximately 1.8
million copies. Our other print publications include the Bergdorf Goodman Magazine and specific designer mailers.
In addition to print publications, we leverage our websites and online advertising through banner ads and paid searches, among other things, to
communicate and connect with customers looking for fashion information and products online. We believe that the online and print catalog operations offer
the customer an omni-channel shopping experience allowing our customers to choose the channel that best fits their needs at any given time.
Loyalty Program. We maintain a loyalty program under the InCircle® brand name designed to cultivate long-term relationships with our customers.
Our loyalty program focuses on our most active customers. This program includes marketing features, including private in-store events, as well as the ability
to accumulate points for qualifying purchases. Increased points are periodically offered in connection with promotional and other events. Upon attaining
specified point levels, points are automatically redeemed for gift cards. Approximately 40% of our total revenues in fiscal year 2014 were generated by our
InCircle loyalty program members who achieved reward status.
Sales Associates. Our sales associates instill and reinforce a culture of relationship-based service recognized by our customers. We compensate our
sales associates primarily on a commission basis and provide them with training in the areas of customer service, selling skills and product knowledge. Our
sales associates participate in active clienteling programs, utilizing both print and digital media, designed to maintain contact with our customers between
store visits and to ensure that our customers are aware of the latest merchandise offerings and fashion trends. We have equipped our sales force with
technology by rolling out to them over 8,000 smart phones and tablets, which further enhances our customer communication and engagement. We empower
our sales associates to act as personal shoppers and, in many cases, as the personal style advisor to our customers. In our online operations, customers may
interact with knowledgeable sales associates using online chat capabilities offered on our websites or by dialing a toll-free telephone number.
Customer-friendly Websites. We believe that we offer a high level of service to customers shopping online through easy-to-use site navigation, site
speed and functionality and many customer-friendly features such as runway videos of apparel, detailed product descriptions, sizing information, interviews
with designers and multiple angle shots of merchandise. In addition, we place high importance on quick, accurate product delivery and an efficient and
friendly call center.
Proprietary Credit Card Program. We maintain a proprietary credit card program through which credit is extended to customers and have a related
marketing and servicing alliance with affiliates of Capital One Financial Corporation (Capital One). Pursuant to an agreement with Capital One (the Program
Agreement), Capital One offers proprietary credit card accounts to our customers under both the “Neiman Marcus” and “Bergdorf Goodman” brand names.
We receive payments from Capital One based on sales transacted on our proprietary credit cards. We may receive additional payments based on the
profitability of the portfolio as determined under the Program Agreement depending on a number of factors including credit losses. In addition, we receive
payments from Capital One for marketing and servicing activities we provide to Capital One.
In connection with the Program Agreement, we have changed and may continue to change the terms of credit offered to our customers. In addition,
Capital One has discretion over certain policies and arrangements with credit card customers and may change these policies and arrangements in ways that
affect our relationships with these customers. Any such changes in our credit card arrangements may adversely affect our credit card program and ultimately,
our business. The Program Agreement terminates July 2020 (renewable thereafter for three-year terms), subject to early termination provisions.
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