Nordstrom brings the department store into the 21st century

2020/01/21 Innoverview Read

The National Retail Federation's Big Show helps the industry take stock of a new year, fresh off the typically grueling holiday quarter. This year, the event also provided an opportunity to check in with one store in particular: Nordstrom's first New York City flagship, which opened in October to great fanfare, and with great expectations.

The store, at seven floors and and 320,000 sqare feet, certainly looks the part of a 21st century department store, with hi-touch services like styling and tailoring, brand expertise plus brand-agnostic guidance in beauty and fashion, opportunities for digital connections (including dressing rooms), and food and beverage. The store has plenty of high-end labels, including items developed in partnership with Burberry exclusive to this location, but also offers price points in all categories for more budget-minded customers, according to Shelley Kohan, professor of fashion business management at the Fashion Institute of Technology, speaking during a recent excursion there.

In addition to multiple restaurants and bars — there's some sort of food concession on every floor, more than any other Nordstrom — customers can order drinks in dressing rooms and footwear areas. That helps sell things, Co-president Erik Nordstrom said during an NRF keynote talk on Tuesday. "I grew up selling shoes. … We think a lot about shoes," he said. "I don’t know why it took us so long to put drinking and shoes together, but it’s a great combination."

For the retailer, New York is more than the flagship, however. As Nordstrom told his NRF audience, the company has constructed a retail ecosystem in the city, which some observers tell Retail Dive is especially suited to the Big Apple. Jane Hali & Associates analyst Jessica Ramirez, speaking to Retail Dive at the NRF event, described the flagship as "well curated," with emerging as well as classic brands, plenty of buy online, pickup in-store opportunities, and strong merchandising in competitive segments like lingerie. 

"It's like a version of the online store, which is appropriate for New York," she said.

Nordstrom has high hopes for that. The wider Tri-State area represents a $700 million-plus market, and the company has enlisted its off-price Rack stores (two in Manhattan), its two new Local stores (both in Manhattan), along with the men's store across the street, also on West 57th Street and Broadway, to tap that market. Nordstrom also says that New York is already its largest e-commerce market.

Not all analysts believe that shoppers frequent both Nordstrom's full-line stores and its off-price Rack stores as Erik Nordstrom claimed again during his NRF talk. But at least some apparently do. On a visit to the company's bustling Upper East Side Local location on 3rd Avenue, a somewhat harried young mother pushed a pram into the store to drop off a return and asked, seemingly without hope, "You don't also take Rack returns do you?"

Indeed, they do; in fact, Nordstrom's Local stores also take other retailers' returns, in a spirit of sharing that extends to its collection of used apparel for Housing Works and gift wrapping services supported by Paper Source, which also runs a store of its own down the street. The stationary company supplies the paper and trains Local staff in optimal wrapping techniques. Local regulars have requested the ability to come in to wrap their own packages, too, and the Nordstrom associates said they're working on that.

The location already seems like a neighborhood fixture. A man and his large, gregarious Goldendoodle, who bounded in to pick up a package, were greeted with cheery familiarity by the staff. Since opening in September, the 3rd Avenue Local has had to expand its shelving to accommodate the large number of order pickups. The store has also improved its signage based on customer feedback, and added a second register. 

(Source: Retail Dive