Nordstrom goes mini in high-end locations

Less is becoming more when it comes to your favorite big-box retailers.

That’s what Nordstrom wants its shoppers to experience with the opening of Nordstrom Local on New York City’s Upper East Side which will be followed by a West Village location. It is also a play to attract a wealthier clientele that resides in the lucrative neighborhoods.

Ticker Security Last Change Change %
JWN NORDSTROM INC. 23.82 +0.07 +0.29%

The luxury retail chain announced the debut of its unique service hub this week Tweeting:

The gist? Trade-in the traditional retail strategy for a handful of customized clothing services. This includes online order pick-up, try before you buy, in-store returns, alterations, style consultations, leather repair and a dedicated gift wrapping station with stationery giant Paper Source.

More big retailers are going small scale in select urban areas to capture a niche customer. Target, for example, now has an edge on Walmart using this strategy. More than 17.9 percent of Target customers bring in more than $100,000 per year, according to outpacing Walmart.

Ticker Security Last Change Change %
TGT TARGET CORP. 155.93 +0.92 +0.59%
WMT WALMART INC. 71.03 +1.04 +1.49%

Nordstrom Local’s Upper East Side shop is approximately 1,800 square feet and is designed to be “family-friendly” with regularly scheduled stroller cleanings through baby gear service Tot Squad.

A second New York location is set to open in the West Village on Sept. 27 and will be slightly larger at 2,200 square feet.

Nordstrom Stores President Jamie Nordstrom, left, Shea Jensen, Nordstrom's SVP Customer Experience, center, and Nordstrom Co-President & CEO Erik Nordstrom pose for a photo at the Nordstrom Local store, in New York's Upper East Side. (AP Photo/Ri

The high-end retailer asserted that Nordstrom Local focus will be on a “reimagined” and communal shopping experience. “Both hubs will serve as a community meeting location for networking and family-driven events,” the press release noted. "We hope to make shopping easy by being closer to where our customers live and work" said Jamie Nordstrom, president of Nordstrom stores at the opening.

“Nordstrom Local is about giving customers more access to brands and styles they love, to try on or take home in a fast and convenient way. We hope to make shopping easy by being closer to where our customers live and work."

- Jamie Nordstrom, Nordstrom Stores President 

Before its New York expansion, Nordstrom Local was born in the heart of Los Angeles. The first was opened in the Melrose shopping district on October 2017—offering a 3,000-square-foot location that’s outfitted with nail services, tuxedo rentals and more. A second location opened in Brentwood on September 2018 and a third in Downtown LA in October 2018.

"We've learned a lot from our customers since opening our first Nordstrom Local on Melrose in Los Angeles in Fall of 2017," Shea Jensen, senior vice president of customer experience said, adding, "Customers who visit a Nordstrom Local spend 2.5 times more and account for 30 percent of online order pick-up in Los Angeles..."

"Customers who visit a Nordstrom Local spend 2.5 times more and account for 30 percent of online order pick-up in Los Angeles. We're excited to introduce Nordstrom Local to our customers in New York City as we serve them in our two newest locations."

- Jensen elaborated when talking about the insights gained from Nordstrom Local.

A larger flagship department store is also in the works and will open to the public on Oct. 24—putting a total number of six Nordstrom locations in the New York City market when factoring in its two off-price Nordstrom Racks and Nordstrom Mens Store.

The Nordstrom stores that actually carry merchandise will have to compete with department giants like Macy’s, Saks Fifth Avenue, Barney’s and Neiman Marcus.

Ticker Security Last Change Change %
M MACY'S INC. 16.81 0.00 0.00%
SKS n.a. n.a. n.a. n.a.

The expansion of the Nordstrom Local concept in New York comes at a time when Nordstrom’s sales have taken a hit. According to the retailer’s latest earnings report, “Full-Price net sales decreased 6.5 percent and 5.9 percent for the second quarter and six months ended August 3, 2019, compared with the same periods in 2018.”

Meanwhile, its off-price net sales also saw a decrease of “1.9 percent and 1.3 percent" for the same period.

The Upper East Side and West Village Nordstrom Local locations will give back to the community they serve with a partnership with New York City non-profit Housing Works, which is a collaboration that allows customers to donate their gently-used clothes.

Outside of Nordstrom Local and the upcoming flagship, the Seattle-based retailer boasts 118 full-line stores in the U.S., Canada and Puerto Rico. Additionally, there are 250 Nordstrom Rack locations along with an assortment of other styling services and boutiques.