While other department stores are struggling to adapt to a digital retail space, Nordstrom Local is embracing the concept of “thinking small.” The retailer recently opened two new Local stores in New York City, expanding their influence without the creation of multi-million dollar stores. Nordstrom Local offers a shopping experience with–well–no products!
Two years ago, Nordstrom opened its first Local store in Los Angeles. At the time, the radical idea garnered criticism for exactly the innovation stated above. How can a department store, which has relied on having everything under one roof, open a boutique that exclusively offered services? Soon after its opening, however, it was clear what the micro-retailer could accomplish. The services offered directly complemented the flagship stores, and this concept worked so well that Nordstrom opened two more locations in Los Angeles not long afterward.
The Melrose store, the first location to open, provides the following services:
- Alterations
- Personal stylists
- Gift wrapping
- An in-store nail salon
- Formalwear rentals
- Nordstrom returns
- Online retailer returns
- BOPIS (Buy-online-pickup-in-store)
- Curbside pickup for Nordy Club members
- Dry cleaning
Source: Nordstrom website
When looking at these services, it may seem like an arbitrary list thrown together and less targeted than a typical concept store. Just as its flagship stores provide every product under one roof, though, Nordstrom Local provides every service under one roof. The store acts as a sort of community space, an intersection where customers with various different needs enter into the Nordstrom experience. These smaller stores also target consumers where they are more likely to spend money–in many ways becoming an “accidental” detour for many window shoppers.
The Nordstrom Local concept is transforming the way that shoppers think about department stores. By bringing the “Nordstrom experience,” typically seen as upscale and eventful, down to the local level, these stores invite consumers to see department stores in a new light. The services offered, which served as cornerstones of Nordstrom’s flagships, were previously a perk to making the journey out to a department store. Department stores offered something unique and personal that could not be replicated by online retailers like Amazon. By bringing these perks to smaller, more accessible stores, customers see something both familiar and new.
With the opening of the New York City stores, Nordstrom Local is testing the limits of these supporter stores. In addition to replacing the dry cleaning service with shoe and leather repair, the services at the New York locations are tailored to the area. Curbside pickup is exclusive to the three Southern California stores, where customers are more likely to park their cars. In the Upper East Side store in New York, there is a space for food and beverages as well a clothing donation program. It looks like the Southern California stores served as testing sites for the New York spaces–the nail salon and formalwear rentals did not make the cut for New Yorkers.
In a similar fashion, digital giants like Walmart and Amazon are using concept stores to test future investments. In a recent Gartner report, these two retailers topped the rankings for Digital IQ–a metric determined by the amount and quality of a retailer’s online shopping features. Their success lies in continual investments in omni-channel infrastructure, including large-scale warehouse innovation and building concept stores. Amazon made waves in the convenience store space with its Amazon Go concept, but Walmart has made similar progress in the background. Sam’s Club Now, which opened in Texas last year, became a hub to experiment with new checkout systems and to improve the overall BOPIS service.
Walmart has also started building spaces that serve the same function as Nordstrom Local–focusing on speedy order pickups instead of carrying a huge inventory. In July, the retailer opened a pickup-only grocery store in Lincolnwood (a Chicago-area suburb), marking Walmart’s debut into digital-only physical stores. While the interior of the store is similar to a typical Walmart, customers only interact with employees at the pickup stations outside.
This Pickup Point in Lincolnwood includes a more diverse inventory than most Walmarts to cater to the local community. This includes expanded Mediterranean, Kosher, and Hispanic food offerings. In an interview with the Chicago Tribune, regional ecommerce director Josh Chaney noted, “This gives us an area to see how we meet that customer.”
Adapting inventory to meet local demand (and in some cases, eliminating it entirely) has allowed brick-and-mortar retailers to build more direct relationships with their customer base. Whether the offerings are fresh fruit and produce or a freshly tailored suit, consumers are responding positively to these micro-retail spaces. Apart from serving as testing grounds for new ideas, these spaces also let retailers expand their influence and increase efficiencies in their existing stores. Nordstrom Local, for example, shortens the time between customer purchases and returns–the flagships nearby have a better opportunity to resell these items as a result. Micro-retail is not a replacement for brick-and-mortar, but it does serve as an alternative approach for the industry.
For more information on how retailers are reimagining old standards, you can watch an interview with Marcia Webb, Nielsen Vice President of Specialty Retail, at this year’s GroceryShop conference here. You can also watch an interview with Jon Springer, Executive Editor of Winsight Grocery Business, where he discusses the state of grocery from his vantage point, here.
