The NYC Luxury Retail World Is Already Crowded. Can Neiman Marcus and Hudson Yards Stand Out?

In a city of famed department stores, here's how these brands can succeed

The newly opened Neiman Marcus location at Hudson Yards Hudson Yards
Headshot of Diana Pearl

Perhaps more than any other city in the world, New York is a metropolis of department stores. The city boasts several famed flagships, including the massive Macy’s in Herald Square, the original Bloomingdale’s on 59th street, luxury epicenter Barneys New York and Fifth Avenue icons Bergdorf Goodman and Saks Fifth Avenue.

Last week, an outsider arrived in Manhattan as Dallas-based behemoth Neiman Marcus opened the doors to its first New York location at the newly opened shopping center at Hudson Yards. The store’s debut has been boosted by a widely-attended launch event as well as the publicity that’s surrounded the simultaneous opening of Hudson Yards, a newly built up stretch of Manhattan’s far West Side that includes luxury apartments, office buildings, a hotel, a 150-foot staircase structure called “Vessel” and perhaps most notably, a shopping center.

Hudson Yards, and Neiman Marcus in particular, are entering a crowded retail playing field. Already in NYC, shoppers have the opportunity to partake in some of the world’s most iconic retail experiences. A consumer can shop for a necklace at the Tiffany’s location that Audrey Hepburn stood outside of in Breakfast at Tiffany’s. They can buy a Louis Vuitton bag at the Bloomingdale’s where Rachel Green worked on Friends, or a pair of Manolo Blahnik pumps from Barneys New York, a go-to retailer for Carrie Bradshaw on Sex and the City. At Macy’s, they can browse at the same store that served as the inspiration for the classic film Miracle on 34th Street.

There’s an undeniable cachet that comes with shopping at these locations, and it serves to make the shopping experience more exciting and more of a true moment than making the same purchase at less-famous locale. And as brick-and-mortar retail has increasingly leaned on experience in the face of dwindling in-store sales, that prestige has become an even more powerful tool.

All this begs the question: Why would anyone choose to go to the city’s far-West Side to shop not only at a mall (an institution that may have waning widespread success, but is still a fairly omnipresent sight throughout the country), but at a store that does not carry the New York icon and flagship status that so many of its nearby competitors do.

The Jo Malone store at Hudson Yards

The key, Jason Goldberg, founder of Retailgeek and chief commerce strategy officer, Publicis Communications said, is to create an experience that’s just as compelling as what these other stores have to offer. For example, high-tier dining options, like you’d find at Bergdorf Goodman or Barney’s in-store restaurants, or exclusive brands shoppers can’t find elsewhere. That’s true not only for Neiman Marcus, but also the outposts of other Fifth and Madison Avenue luxury mainstays, like Cartier, Gucci, Dior, Fendi, Louis Vuitton, Tod’s and Kate Spade, among others, that also opened up at Hudson Yards. With these brands’ new locations, they face a formidable opponent—themselves. Many already have locations around the city’s more highly-trafficked areas.

“Manhattan is very much a flagship market,” Goldberg said. “They’re used to shopping at these much more extravagant, higher capital, richer flagship experiences. To compete in that market, you can’t just do the things that made you successful in expanding to the west coast, or something else. Not only do you have to break through on the awareness game, you have to break through with a flagship caliber experience to compete and win.”

There’s no doubt that Neiman Marcus is investing in these sort of diffentiating features in its Hudson Yards store. According to Theresa Palermo, svp brand marketing and public relations for Neiman Marcus Group, there are three restaurants, a spa, a nail salon, a blowout bar, a floral boutique from PopUp Florist, as well as a lounge where customers can connect with the store’s in-house stylists. These, they hope, will showcase the differences between Neiman Marcus and even its sister store, Bergdorf Goodman, which are both owned by the same parent company.

“We will attract customers who are looking for authentic experiences, incredible fashion, and luxury convenience,” said Palermo. “Bergdorf Goodman is a Manhattan retail icon. There are many different product and service offerings that will cater to different types of customers.”

As well, Neiman Marcus and the rest of these new luxury storefronts, might not be able to replicate a decades-long place in New York history, but by putting its first Manhattan location in Hudson Yards, it’s distinguishing itself as something else entirely, particular given all the chatter that’s surrounded Hudson Yards—it’s the biggest private real estate development in U.S. history. Associating itself with such a major project and hopeful destination in the city syncs the potential of Neiman Marcus with that of Hudson Yards.

The city may be pushing hard to see Hudson Yards become a success—it offered substantial tax breaks to make it happen, after all. However, because of this relatively isolated location (there isn’t much around Hudson Yards besides Hudson Yards itself), that prosperity relies on much more than just expecting tourists and locals to wander in.

"[Hudson Yards has] to draw tourists, it's got to draw visitors from other parts of the city. Anytime you try to change shopping patterns in a significant way, that's a hurdle."
Steve Dennis, a former Neiman Marcus executive and the president and founder of SageBerry Consulting.

@dianapearl_ Diana is the deputy brands editor at Adweek and managing editor of Brandweek.