Nordstrom is investing in a big New York store in the midst of retail slowdown: NPR
Nordstrom's new flagship store opens Thursday at 57th Street and Broadway in New York City. The store has seven floors of products and services along with restaurants and bars in the store.
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Nordstrom's new flagship store opens Thursday at 57th Street and Broadway in New York City. The store has seven floors of products and services along with restaurants and bars in the store.
Peter Talbot / NPR
In one corner of Nordstrom's new flagship store in New York City, adjacent Burberry logos covered all surfaces. Dramatic string music played. And beyond the items, it seemed that a small cafe assigned in pink just waited for someone to pose for a photo.
"No professional photographs," said a spokesman who led press members through the store. "But social pictures are OK."
The future of retail brings high-end, online brands to the Gen Z kids through Instagram ads, pop-up stores and embellished influencers. But Nordstrom, the traditional luxury retailer, is looking to open a massive store in one of the largest markets as the road ahead.
Nordstrom will open its 320,000-square-foot store Thursday at 57th Street and Broadway. The store is designed to "reflect the spirit of the city," as the company says, and has seven floors of products and services along with restaurants and bars in the store.
"If you want to be known as a top retailer in North America, you pretty much have to be in New York," said Peter Nordstrom, the company's co-president.
People browse the scents of Nordstrom's flagship New York during a preview of the store. Although online stores are getting a lot of attention, one analyst said that physical stores are still a critical part of a retailer's strategy.
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People browse the scents of Nordstrom's flagship in New York while previewing a store. Although online stores are getting a lot of attention, one analyst said that physical stores are still a critical part of a retailer's strategy.
Peter Talbot / NPR
The store is a great investment at an uncertain time for retailers. The luxury department store Barneys closes stores across the country and even puts the iconic Manhattan Madison Avenue location in trouble. Last month Forever filed for bankruptcy 21 and plans to close as many as 178 stores.
Traditional retailers face rapidly changing consumer habits, rising rents and a large number of only businesses online that take sales away from big box stores. But physical stores are not dead.
"Yes, stores are closing and retailers are consolidating the number of stores they have, but it is just a response to changing consumer behavior," said Michael Brown, an analyst at consulting firm AT Kearney .
Physical stores are still a critical part of a retailer's strategy, Brown said. He said 75% of retail is still going on in stores, and 90% of "consumer journeys," the process customers go through before buying, include interacting with a store.
Nordstrom also opened two other stores last month in New York. Called Nordstrom Local, the smaller stores do not make clothes, but offer pickup in the store for items purchased online along with free consultations with stylists. The dealer's increased presence in New York is an attempt to duplicate the success it found in Los Angeles.
Workers put clothes on a mannequin in the store's Nike collaboration. Customers entering this part of the store from the street will see dozens of security cameras pointing to their feet, projecting their shoes on small screens inside.
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Workers put clothes on a mannequin in the store's Nike collaboration. Customers entering this part of the store from the street will see dozens of security cameras pointing their feet and projecting their shoes on the small screens inside.
Peter Talbot / NPR
The company has fine-tuned its Los Angeles strategy this year through Nordstrom Locals by making up to seven times more inventory available for next day pickup. According to Nordstrom's second-quarter report, this contributed to almost triple sales in July for buy-online, pick-up-in-store purchases.
In an August interview with investors, Erik Nordstrom, the company's co-president, said customers spent 2 1/2 times more than the average at Nordstrom Locals in Los Angeles. He said that the company views their stores not only as places to sell products but also to engage customers.
"We really don't care where sales get dissolved," he said.
Brands that are only online are often seen as a scourge of traditional brands that rely on physical stores. But analyst Brown said much of the hype surrounding these companies comes from their high presence and heavy media coverage.
Wolf is one of the Manhattan store's seven restaurants and bars. In addition to food, drink and clothing, Nordstrom's new store offers services such as denim customization, facials and other beauty options, personal stylists and alterations.
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Wolf is one of the Manhattan store's seven restaurants and bars. In addition to food, drink and clothing, Nordstrom's new store offers services such as denim customization, facials and other beauty options, personal stylists and alterations.
Peter Talbot / NPR
And more and more brands born online – such as Warby Parker, Bonobos and Untuckit – have opened their own physical stores. When these businesses open stores, they find that their online sales increase, Brown said.
"It's a big billboard for the business that gets more eyeballs than is needed online through pop-up ads and banner ads and everything else very expensive media," he said.
In addition to marketing, Nordstrom executives also point to the services their stores offer as a strength. They are not new or necessarily aimed at the next generation of consumers, but services such as denim customization, facials, personal stylists and modifications simply cannot be offered online.
In a constantly online world, Nordstrøm still finds value in the real world.
Peter Talbot is an intern at the NPR Business Desk.
