Nordstrom tries a no-merchandise store

Discussion
Photo: Nordstrom
Sep 12, 2017
George Anderson

Nordstrom announced plans to launch a new inventory-free concept store that it envisions as a neighborhood gathering spot where customers can go for free personal styling consultations, to try on clothes and then have them delivered to the location for pickup.

The concept known as Nordstrom Local, will debut next month in West Hollywood, CA. The 3,000-square-foot store includes eight dressing rooms for customers to try on clothing. Because the store does not carry inventory for sale, on-staff personal stylists will either retrieve clothing that customers wish to purchase from nine Nordstrom stores in the Los Angeles area or order items online. Customers who place orders by 2:00 p.m. will be able to pick them up on the same day.

Other services offered through Nordstrom Local will include curbside pickup, Trunk Club, alterations/tailoring and manicures. Customers can return orders to any Nordstrom location.

“As the retail landscape continues to transform at an unprecedented pace, the one thing we know that remains constant is that customers continue to value great service, speed and convenience,” said Shea Jensen, Nordstrom senior vice president of customer experience who led the Nordstrom Local initiative. “We know there are more and more demands on a customer’s time and we wanted to offer our best services in a convenient location to meet their shopping needs. Finding new ways to engage with customers on their terms is more important to us now than ever.”

The store will feature a central meeting space surrounded by the eight dressing rooms. Customers can sit in the area to enjoy a glass of wine or beer and to talk with their Personal Stylist. Appointments with stylists can be made online, over-the-phone or in-person. Nordstrom Local customers can also just walk in to be served by the store’s sales personnel.

The retailer is introducing a new digital tool called Nordstrom Style Boards that enables sales people and stylists to post personal recommendations for customers. Customers can also use the app to have direct conversations with salespeople and stylists when they are not in the store.

DISCUSSION QUESTIONS: What will determine the success or failure of Nordstrom Local? Do you think the concept will play well with consumers? Will it have appeal beyond LA?

Braintrust
"I love this idea. Putting experience at the heart of retail is the first building block to success."
"Nordstrom should also put in a few immediate pickup, high sell-velocity items that match the style of those using these drop-in centers."
"...it’s going to take a little time for something like this to hit the center of the bell curve. Patience will come in handy..."

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31 Comments on "Nordstrom tries a no-merchandise store"

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Bob Phibbs
BrainTrust

It seems these are more after-purchase services. When I’m in LA next I plan a visit as the entire concept seems odd. Why would someone “pre-buy” a product and wait for its retrieval? Why not just go to the Grove and browse with a personal shopper? How does this scale to make financial sense for the investment in employee time, real estate, etc.? But (like Amazon often does) Nordstrom owns the “retail buzz” for the day which may be worth more than the actual facility.

Phil Chang
BrainTrust

I love this idea. Putting experience at the heart of retail is the first building block to success.

We need more details to see if this is going to work out. Will they have a way for consumers to order right away? How quickly will it get delivered? And will the experience continue to evolve or will it be a canned experience every time?

The simplicity of this concept is exciting.

Art Suriano
BrainTrust

I like this concept a lot and have predicted it myself. The store of the future will be smaller with less take-it-home-now items because of the continuing improvement in same-day delivery. This retail concept will keep costs down such as rent, staff and inventory. The only concern is how much ahead of its time Nordstrom may be. LA is the place to test this, but I feel we’re still a good 10 years away if not longer before the “go to the store to see it and touch but not to get it” concept becomes the norm.

Charles Dimov
BrainTrust

Nordstrom is missing a key point. Innovation is great. Having small-footprint pickup and try-on centers is great. However Nordstrom should also put in a few immediate pickup, high sell-velocity items that match the style of those using these drop-in centers. Part of the value proposition of omnichannel retail is that on an in-store pickup, 58 percent of customers buy more goods. Have a few display mannequins, sellable wall art and additional complementary items that the shopper can add to their purchase. It will increase the basket size and enhance the experience.

Zel Bianco
BrainTrust

I predict it will become a series on Netflix — “Real Shoppers of Nordstrom: LA Edition.” But seriously, I do think it may work as it sounds like a social thing that is fun and will save time. The challenge will be knowing the customer well enough to have the right inventory available to try on in the first place. Right item, right place, right time, etc. It seems like the same logistical problems will make or break this concept.

Bob Amster
BrainTrust

I expect that the concept will only work with an assortment of the highest-priced/highest gross-margin products. I don’t foresee too many of these locations opening.

Roy White
BrainTrust

That Nordstrom is executing this experiment is a highly positive development for brick-and-mortar retailing. Retail stores, especially department stores and grocery stores, need to change. New designs and configurations are necessary, because, after the difficulties of the past couple of years, the stores of the past and present are not performing. This store concept addresses a number of issues, the most pertinent being the online selling aspect. This store may or may not work or be profitable, but it is a refreshing move in the right direction and may lead to something innovative that will work.

Phil Masiello
BrainTrust

I love the concept of a personal stylist. And I applaud the effort to personally connect with customers.

However I am unsure how a lack of inventory will play with the customer. Certainly if you get fitted for clothing, it requires alterations. So I don’t see leaving the store without your purchase as a problem. But if a customer is taking the time to visit the store, I would think they would want to see all of their options.

This probably has selective appeal. I am not certain it has mass appeal.

This concept will be interesting to watch and see how consumers react.

Robert DiPietro
BrainTrust

Drinking and buying. That is an advantage for the retailer. The communal low-key relaxed shopping environment may present some opportunities for Nordstrom to differentiate but the instant satisfaction of walking out with something may be too much to overcome. Time will tell on this one.

Frank Riso
BrainTrust

While this is an interesting idea for Nordstrom, it will be sales that determine its success or failure. I do think the concept would be successful in a few cities, mostly those that have “Housewives of [name your city]” TV shows as a start! However it will not appeal to those who have immediate need for an item. If it lasts a year or more I would be surprised.

Ed Dunn
Guest
11 days 19 hours ago

The concept and model is excellent, the West Hollywood location is horrible. First, it is exciting to see Savile Row bottled as a bespoke shop for men. Offering features from custom consultation is what made Men’s Wearhouse grow so fast so the elements are there. However, like Savile Row, this model can only be sustained in a high-density big city like Hong Kong, Boston, New York, Chicago or Miami — not West Hollywood.

Adrian Weidmann
BrainTrust

Success for this concept, and all the others that come after it, will be measured by purchases. It will be insightful to see if shoppers will shop today and receive products later. We live in a society that expects instant gratification but perhaps shoppers will be delighted twice — once when they make a selection and then again when they unpack the box. It’ll be exciting to see how it unfolds.

Dick Seesel
BrainTrust

I’m skeptical about personal stylists without actual merchandise to sell — unless they retrieve items from a nearby store, causing the customer to make two trips. I like the experiential aspect of the concept, but I think it would work better if integrated into an existing store in a significant way.

Neil Saunders
BrainTrust

Regardless of whether this works or not, kudos to Nordstrom for trying and testing new things. This approach is why it is one of the better performing department stores!

Personally, I think it does stand a chance. It is essentially a click-and-collect hub, but with a range of added value services that Nordstrom shoppers in this type of location would find valuable. It provides brand exposure, will reduce shipping costs and should drive incremental revenue.

My only criticism is that it would be sensible to stock at least some merchandise: essential beauty items, maybe a few key fashion items, etc. would all drive impulse purchasing.

Anne Howe
BrainTrust

Kudos to Nordstrom for putting shoppers and service at the center of the retail model instead of inventory. The use of VR tools to enable shoppers to visualize themselves in various styles would help, as would mannequins of realistic skin tones and proportions. Invite influencers, ramp up the social interaction and keep track of how the word spreads. This could be a very real and viable beginning of something that’s very different but effective!

Lee Peterson
BrainTrust

We tested the idea of showroom stores like this both quantitatively and qualitatively and consumers are more than ready for them. We also know that Bonobos works (Walmart didn’t spend hundreds of millions for nothing) and that Argos in the UK has been doing it successfully for a while. To say nothing of the Apple stores, which are essentially showroom stores. So the time is here. I wish more specialty stores would attempt this idea. If you were Gap and you saw Bonobos working, wouldn’t you try to emulate them? I guess that’s another topic for another day.

Having said all that, it’s going to take a little time for something like this to hit the center of the bell curve. Patience will come in handy, and a little of the old “super associate” experience (ala Bonobos) will be the key to success.

Paul Donovan
BrainTrust

As with the other commentators I applaud Nordstrom for trying new experiences and formats. If they can solve the problem of what jeans fit you better as you age they will have done something good!

Brian Kelly
Guest
11 days 18 hours ago

Nordstrom goes Seinfeld. It is a show about nothing.

No this isn’t a store about nothing; it is a showroom. Some might call it Bonobos. Back in the day it was Service Merchandise. It is a living catalog.

When did “retail experience” become reduced to just “place?” Not fulfilling the transaction at the point of sale is fine for some shopping goals, but not all. What shopper goals these stores will fulfill and how to retain or grow share of wallet needs to be sorted out.
We are in an amazing place. On one hand there are showrooms and on the other there is same-day delivery. We are plumbing the long tail of shopper expectations.

Seems to be more true than ever, “retail ain’t for sissies!”

Bryan AMARAL
Guest

While the concept of a “no merchandise” store seems economically unsustainable, it may make sense when considering the real “problem” Nordstrom is attempting to solve.

There are a great many people that prefer a curated, high-service consultative experience when purchasing their apparel and health and beauty products. For many, buying online and shipping to their home doesn’t address the next step of the process. However, for categories such as tailored clothing, getting expert alterations and assistance with coordinating an outfit is exactly what they want. The local “third-space” aspect may well increase the number of 1:1 relationships between customers and associates and if those associates are doing their clienteling work, it should increase frequency, conversion and average transaction size.

This is not dissimilar to the small high-service custom apparel shops that exist today. These retailers don’t have a stitch of ready-to-wear clothing but often see +$1000 per square foot revenue and an intensely loyal clientele. The future of retail depends on new ideas and formats designed from a customer point of view. Kudos to Nordstrom for exploring this new initiative.

Jerry Gelsomino
BrainTrust

Maybe I’m not understanding this idea, but won’t it make the shopping trip longer than just browsing, trying on, selecting, buying, then taking it home? Going back to the store to pick the item up isn’t a convenience. This concept is best for someone with lots of time on their hands.

Bob Phibbs
BrainTrust

Agreed.

Ken Morris
BrainTrust

Nordstrom Local is a new twist on the trend for smaller store footprints and limited to no inventory. RH Gallery stores have been a success with its showroom approach with no inventory on hand to purchase. Many consumers are beginning to think of stores as showrooms and use them to try on or test products in person and then order online from the comfort of their home or anywhere from their mobile device. This showrooming concept which requires minimal space lends itself well to affluent urban locations where real estate is expensive. If the first Nordstrom Local takes off, look for more location popping up in other major cities. Perhaps Nordstrom will also embrace the high-end catalog approach used by RH Gallery to drive traffic to the “Local” location.

The Nordstrom Local concept seems like a perfect venue for virtual dressing rooms. Since there is no inventory on hand, other than what was pre-ordered from local stores based on the request of the customer, having the ability to see other styles and colors virtually on your body would be a fun way to shop. Consumers love the theater of shopping and Nordstrom certainly understands the customer.

Kevin Merritt
Guest

This as an interesting and valuable experiment, but I remain a skeptic on the long-term viability of such a store concept. I struggle to recall a successful implementation of this. As others have pointed out, it requires multiple trips (unless the customer is OK with home delivery) and there is a lost opportunity for impulse buying.

Also, so much of apparel shopping is about discovery. The size of the store would limit SKUs given that they would need significant inventory just to cover the sizes. Potentially, this could work better for male shoppers (think Men’s Warehouse) who require less clothing diversity.

On the plus side, I think they will learn a great deal about customers’ tolerance for delayed gratification and perceived value around service levels. There are also “stylistically challenged” people like me who will find value here — note the growing trend for “wardrobe in a box” online. I suspect Nordstrom will take valuable insights back to their more traditional stores to see the value at scale.

Larry Negrich
BrainTrust

The shopper can’t immediately get their purchase, shopper has to try on “samples” (yuck), retailer has to supplement the supply chain with stylist visiting local stores to pick up merchandise, etc. What about this concept works for either the shopper or the retailer? Nordstrom already has a great in-store experience to offer shoppers, so I’m not sure why they would want to create a knock-off experience. The savings in real estate and inventory cost don’t balance out the scale.

Liz Crawford
BrainTrust

Fun idea. Won’t work. Why not? Because there is no instant gratification. In a bricks and mortar environment, shoppers walk away with a trophy, an object of conquest. In a digital environment, shoppers get quick dopamine rewards.

This idea — while it has merit — doesn’t seem to deliver the addict’s fix. It’s neither fish nor fowl.

Ricardo Belmar
BrainTrust

The Nordstrom Local concept has definite potential. The key is location, location, location! Depending on how Nordstrom sees this concept expanding and how they intend to execute it, the location of such stores is critical to success. On the one hand, you can see these stores finding their way to upscale urban neighborhoods that otherwise won’t fit a full fledged Nordstrom department store, but that are close enough to a full store to fulfill purchases quickly.

Then again, why not turn these into a true “local” version of Nordstrom in suburban areas that are just far enough away from a mainline store that customers will consider the main store a special trip, but the Local store a convenient in and out location. You can see these stores arranged in a hub and spoke concept to the department stores, with the occasional Rack store thrown in certain neighborhoods.

It will be interesting to watch what happens with this “convenience store” concept transformed into apparel retail. However, it’s not clear to me why they would not have some limited merchandise available on hand in adjacent categories to the apparel customers are shopping for to entice an add-on purchase.

Joel Rubinson
BrainTrust

So someone has to go to the store TWICE to get merchandise? No way! If the merchandise is mailed to the home next day maybe, but even then, this is really weird as we are so conditioned to trying something on and if we like it, buying it. I understand the value of experience, but only in the context of a real retail environment. I predict failure.

Shep Hyken
BrainTrust

I like the idea of the interaction. I’m concerned about hassle factor — making the customer wait or come back. I’m sure there is more to this story. Anything Nordstrom tries is worth watching. This is a new concept that is being rolled out in one market. Smart to try and see how it works. Looking forward to seeing how this works out.

Jeff Sward
Guest

Nordstrom didn’t wake up one day as a bunch of knuckleheads when it comes to customer service. They took a look at Bonobos and said, “Hmmmmm…I wonder….” I give them credit for being a great example of “continuous improvement.” Let’s try this new model and see what we LEARN. They are being pro-active about their evolution in an evolving market. What’s not to like? It’s a test … it’s a prototype. Judge it a year or two from now. If they put a Nordstrom Rack store-in-store like Macy’s opened Backstage inside their own stores, I’d be throwing up. Instead, they are exploring a service and experience centric idea. What’s not to like?

Kenneth Leung
BrainTrust

Have to visit to see how it works in execution; the execution seems similar to the Amazon store concept. The key is how well the recommendations work and how it appeals to shoppers not looking to go to the traditional Nordstrom store that offers similar services.

Manish Chowdhary
BrainTrust
Nordstorm is renowned for their customer service. I’ve experienced it first hand; their culture creates a meaningfully better and different shopping experience. This is especially true for the fashion-challenged. One interesting aspect of the discussion so far is the conjecture about what Nordstrom is seeking to accomplish. Following is some context to consider: $14.5B 2016 revenue $2.5B 2016 ecommerce revenue 123 full-line stores 215 Nordstrom Rack stores Five Trunk Club clubhouses I believe there are 2 different goals in play and an interesting approach: GOAL 1: Differentiate the $2.5B ecommerce business by delivering a new kind of high touch, omnichannel service experience. GOAL 2: Create a model for introducing that experience to new locations where the economics of a full-line or even a Nordstrom Rack store isn’t economically viable. For example, Manhattan’s nearest full-line Nordstrom store is in New Jersey. They’re taking an interesting approach, too. Nordstrom appears to be applying the Lean Startup methodology. This is just one small store in addition to their other 325+ locations — i.e. this is not a big bet, relatively speaking. Nordstrom can use it as a testing sandbox, continuously adjusting the model until they figure out how to make it flourish. Once… Read more »
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Braintrust
"I love this idea. Putting experience at the heart of retail is the first building block to success."
"Nordstrom should also put in a few immediate pickup, high sell-velocity items that match the style of those using these drop-in centers."
"...it’s going to take a little time for something like this to hit the center of the bell curve. Patience will come in handy..."

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