Nordstrom’s plan to attract shoppers: Wine, manicures — but no merchandise

https://www.washingtonpost.com/news/business/wp/2017/09/12/nordstroms-
BYBy Abha Bhattarai
September 12
The first Nordstrom Local is scheduled to open next month in Los Angeles. (Courtesy of Nordstrom)
The first Nordstrom Local is scheduled to open next month in Los Angeles. (Courtesy of Nordstrom)

Nordstrom’s newest store will have personal stylists, manicurists, a tailor and plenty of wine.

But there won’t be any merchandise for sale. No clothing, no shoes, no accessories.

Instead, Nordstrom Local will serve as a gathering ground for customers to chat with employees, pick up online orders and drop off returns. Stylists will be available to put together personalized recommendations — outfits for a Caribbean vacation, say, or a job interview — that customers can view on their mobile phones and buy directly from Nordstrom.com.

The experiment, which begins with a 3,000-square-foot store in Los Angeles next month, comes as retailers around the country look for ways to blur the line between shopping online and in stores. Analysts say it is also a way for Nordstrom to open smaller locations in more urban areas to keep up with changing customer preferences. (A typical Nordstrom store is about 140,000-square-feet — or nearly 50 times the size of the new concept.)

“As retail continues to transform at an unprecedented pace, the one thing we know is that customers value great service, speed and convenience,” Shea Jensen, senior vice president of customer experience for Nordstrom, said in a statement. “Finding new ways to engage with customers on their terms is more important to us now than ever.”

It’s a model others are trying, too. Apple executives on Tuesday said the company’s newest stores have outdoor plazas, boardrooms, forums and workshops, all with one goal in mind: getting people to linger.

“We don’t call them stores anymore, we call them Town Squares,” Angela Ahrendts, head of Apple Retail, said at a company event Tuesday. “They are gathering places.”

It’s a similar idea at Nordstrom, which in 2014 spent $350 million on Trunk Club, the online personal styling service. The company was also an early investor in Bonobos, the men’s e-commerce company that was acquired by Walmart for $310 million earlier this year.

“Nordstrom has never been afraid to try new things, and that’s become especially important in an environment where bricks and mortar is becoming obsolete,” said Ivan Feinseth, an analyst for Tigress Financial Partners. “Most retailers are struggling because they have no identity and can’t connect with customers. Nordstrom is the opposite: It has always been known for a high level of customer service, and now they’re moving further in that direction.”

But some said it’s not immediately clear whether Nordstrom’s new concept will be successful. Among the challenges the company could face: higher shipping costs as it mails more items to customers’ homes, and difficulty winning over shoppers who have become accustomed to shopping from home.

“It’s a mixed bag,” said Milton Pedraza, chief executive of the Luxury Institute, a market research firm. “There are people who like the instant gratification of going to a store, and there are others who like the convenience of ordering from home. This model — well, it kind of gives them neither.”

Nordstrom has been a rare bright spot in the retail industry, as longtime department stores chains like Macy’s, Kohl’s, Sears and J.C. Penney report declining sales and profits, and announce plans to close hundreds of stores. Seattle-based Nordstrom, however, reported that both revenue and same-store sales — a measure of sales at locations open more than a year — were up during the most recent quarter, as more people shopped online and in its stores.

But the company is also facing competition from Amazon.com, which this year is expected to surpass Macy’s as the country’s largest seller of apparel. Amazon has been aggressively building up its clothing and shoes businesses with its own private-label brands and last month completed its $13.7 billion purchase of Whole Foods Market, giving it a network of nearly 500 stores around the country. (Jeffrey P. Bezos, the chief executive and founder of Amazon, owns The Washington Post.)

“That’s the big question on everybody’s minds: How do you create a hybrid between shopping online and in store?” Pedraza said. “Nobody has figured it out just yet, so the stakes are very high.”

“It’s not a slam dunk — it’s not like anybody is saying, ‘Oh my God, what a great idea.’ They should’ve done this years ago,'” Pedraza said. “But it’s an interesting idea. And who knows? Maybe it will work.”

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