In this week’s Glossy+ Briefing, Nordstrom downplays its strategic store design, while American Dream struggles to reach the finish line.
Nordstrom stresses convenience above all else
Jamie Nordstrom, Nordstrom’s president of stores, explained the company’s customer-centric approach for its NYC flagship, which opened Thursday, by contrasting it to a common retailer-centric approach.
“Retailers in the past have worked like grocery stores that always put the milk in the back of the store: They want you to walk through the store, so there’s a better chance you’ll buy more. But we put ourselves in the customer’s shoes.”
Nordstrom has a reputation for offering next-level customer service, thanks to, for example, a return policy that’s essentially anything-goes. (No receipt? No tags? No problem.) Its new store builds on its foundation of premium service, offering in-store an unprecedented number of services for items purchased anywhere, from in-store gift wrapping to clothing alterations and shoe repairs.
Jamie Nordstrom said in-store pickup is the company’s fastest-growing part of the business. In its second-quarter of 2019 earnings report, Erik Nordstrom, the company’s co-president, said customers who use order pickup typically double their overall spending.
Jamie Nordstrom said the store’s layout was driven by what would be most convenient for the customer. Then again, the main floor features merchandise almost exclusively. There’s a charging station and a digital directory, but the focus is impulse-type merchandise including beauty products and accessories, as is typical of a department store.
In the same conversation, Jamie Nordstrom said a great store is ultimately about discovery. “You don’t come into a store with a list, like you do at a grocery store. You may have an idea of what you’re looking for, but you’ll always bump into a handbag you didn’t know you had to have, or you’ll see a pair of jeans you’ve been wanting to try on. The way we merchandise, it’s about showing you something new, something to put a smile on your face — even if you weren’t looking for it.”
Maybe Nordstrom is doing customers a service by serving them up a look at the latest Christian Louboutins. But more accurately: It’s in the business of selling shoes.
In contrast, Don Ghermezian, CEO of Triple Five Group, the developer behind the New Jersey-based American Dream mega-mall set to open on Friday, owned up to the fact that the center was strategically designed so people would have to walk past stores to get to each of the many attractions (water park, ski slopes, ice rink). “We build entertainment concepts in order to push traffic through retail. That’s the whole point,” he said.
Worth noting is that Nordstrom has opened two NYC-based Nordstrom Locals, fully dedicated to its services, since September.
“Nordstrom has recognized that if they don’t give people experiences and places where they want to spend time, rather than put all their resources in the ‘save time’ bucket, they’re going to be dead in the water. It’s the only way they’re going to stay relevant through brick-and-mortar,” said Michelle Fenstermaker, strategy director at brand and retail consultancy Fitch. “Online’s got the frictionless part down, so give me a reason to want to spend time there.”
American Dream struggles to the finish line
Sixteen years after developers first broke ground on the New Jersey Meadowlands-based shopping project, American Dream — formerly known as Xanadu — it’s set to open its doors on Friday. Portions of it, anyway. Maybe.
Despite being taken over in 2011 by Triple Five Group, the developer behind ultra-large-scale and thriving malls Mall of America and West Edmonton Mall, it seems the project’s last leg has been as big a struggle as any.
For starters, it was reported on Wednesday that the complex still has no certificate of occupancy, which would prevent it from opening altogether. Three days prior, it was revealed that the mall’s location of Bergen County means that it must abide by the local blue laws, stating that stores must remain closed on Sundays.
But, at this point, maybe all press is good press. Though only a first phase of openings is set for Friday — the Nickelodeon Universe Theme Park and The Rink at American Dream, an NHL-regulation ice skating rink — overall awareness of the project is low, at least compared to Nordstrom’s opening, hyped by OOH ads throughout Manhattan. At a store opening in the Upper East Side Wednesday night, a fashion and retail writer confessed that he’d never heard of American Dream.
Once all is said and done, the $5 billion, 3.3 million-square-foot project is set to be made up of 55% entertainment via 17 entertainment attractions and 45% retail. Stores won’t open in March 2020, but even the store directory has red flags. Among planned stores is Barneys, which filed for bankruptcy protection in August — its store and accompanying Freds restaurant will open on schedule, according to American Dream. During a hard hat tour of the project in July, Forever 21 was mentioned as an included retailer. It’s since closed a majority of its U.S. stores.
But to Don Ghermezian, CEO of Triple Five Group, it’s a numbers game: American Dream is based five minutes outside of Manhattan, which means 20 million people live within a 50-mile radius of the center, and 70 million tourists will be in the area every year.
“People will come, and they’ll spend three days here, because it’s like nothing else out there,” he said. “We’ve raised the bar to a level that has never been seen.”