Nordstrom Looks Northward for Expansion Outside U.S.

Discussion
May 25, 2011

Canada is definitely in for American retailers looking to
expand outside U.S. borders. The most recent chain to express an interest in
opening stores in that country is Nordstrom.

Colin Johnson, a spokesperson for
the department store chain, told Dow Jones Newswires, “We already know
we have a lot of Canadian customers.” Canadians
make up the largest percentage of shoppers from foreign countries who shop
at its stores.

Finding the right location to open shop is the biggest stumbling
block so far, said Mr. Johnson. Nordstrom is exploring opportunities for full-size
locations in Canada rather than its Rack format, according to Bloomberg News.

“If we are fortunate enough to find a location and move forward with
a store, we’re really going to be looking to go in strong,” Mr.
Johnson told Bloomberg.

Discussion Questions: Do you think Nordstrom will do well in Canada? What do you see as the challenges and opportunities facing the chain should it expand there?

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13 Comments on "Nordstrom Looks Northward for Expansion Outside U.S."


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Marge Laney
Guest
9 years 11 months ago

Of course Nordstrom will do well in Canada! They know who they are and who their customer is and they remain laser focused on their brand message no matter the channel. Their seamless approach to interacting and engaging their customers and their high level of customer service will serve them well in any market.

Paula Rosenblum
Guest
9 years 11 months ago

Why not?

The brand is famous. Customers are already buying via the web. Finding the right location(s) is key. Montreal, Toronto, Vancouver and other large cities with well-to-do consumers would make a great beachhead. Those cities are also relatively close to the US and I’ll wager some number of residents have bought at US-based stores too.

Max Goldberg
Guest
9 years 11 months ago

While Canada has a number of upscale retailers, Nordstrom, with its consumer-friendly policies should do well. People appreciate great customer service and will pay extra for it. Nordstrom epitomizes customer service and should be a welcome addition to the Canadian market.

Rick Boretsky
Guest
Rick Boretsky
9 years 11 months ago

It will take time for them to adjust to the differences in demographics, customers, and culture, but they should adapt and succeed. Canada is ripe for more upscale department stores.

Bill Emerson
Guest
Bill Emerson
9 years 11 months ago

Canada is a very different retail environment than than the US. Canadians have very different consumption habits. Clearly, Nordstrom has done enough business in Canada to warrant opening there, but, as Mr. Johnson says, location will be critical to success.

Gene Hoffman
Guest
Gene Hoffman
9 years 11 months ago

Nordstrom has a spattering of iconic magic and many Canadians are aware of it. But shopping at Nordstrom is not a cut-rate event. They feature top quality merchandise at high prices in a cultured environment and Canadians with discretionary income will respond and try to experience the perceived lift of being a Nordstrom customer.

But Nordstrom, like all other retailers, has one universal challenge today: they all need more customers whether their stores are in the U.S. or Canada. So we will see if there is a reservoir of unserved Nordtsorm customers in Canada. Let’s hope so.

Doug Stephens
Guest
Doug Stephens
9 years 11 months ago
It’s always a mistake to assume that you’ll be successful in a foreign market (just ask Home Depot China) but in the case of Nordstrom’s chances in the Canadian market, success is probably a safe assumption. Canada is experiencing the same sort of income polarization as the U.S., albeit not to the same extent. Nonetheless, a smaller percentage of the public is responsible for an increasing amount of spending. With this, the market for premium goods is expanding. Secondly, apart from Holt Renfrew, Canada really doesn’t have a department store retailer playing in the upper reaches of the market and for that matter, Holt’s accounts for a small but premium segment. There’s plenty of room for Nordstrom. Lastly, the country’s population continues to grow by virtue of solid and productive immigration, largely from Asia and South Asia. These new Canadians are making a very positive contribution to both the economics and demographics of the country. One caveat however…. While Canada didn’t suffer the recession to the same extent as the U.S. did, the wind may… Read more »
Camille P. Schuster, Ph.D.
Guest
9 years 11 months ago

Applying the same skills toward location selection and service while incorporating adaptation to Canadian consumers’ product choices and purchase habits is a successful strategy for Nordstrom. As in most other things, getting the details right is the most significant hurdle.

Craig Sundstrom
Guest
9 years 11 months ago

“If we are fortunate enough to find a location and move forward with a store, we’re really going to be looking to go in strong,” Mr. Johnson told Bloomberg.

A location? A store? It doesn’t sound like the expansion plans are very big (if they even exist at all). I’m going to be the naysayer here: Canada’s a nice place; it’s much like the U.S. (except they play hockey better…don’t ask); and it’s big in area. But it’s modest in population, and even more so in density. I think only the Toronto, Montreal and Vancouver markets could support multiple stores, with perhaps single or smaller stores in some of the prairie cities (Winnipeg, Calgary, Edmonton). In short, expansion au Nord would be–at best–equivalent to what exists in a larger market like LA or the Bay Area…worthwhile, perhaps, but hardly a game changer.

Carol Spieckerman
Guest
9 years 11 months ago

Nordstrom’s challenges will be the same as those faced by any other retailer entering the Canadian market–picking optimum locations in low density cities and addressing the needs and tickling the fancies of an extremely diverse, multi-cultural consumer base. I definitely see room for a new premium player, though.

Phil Rubin
Guest
9 years 11 months ago

Nordstrom is going to be successful as it expands, whether it is via full-line stores or Rack stores. They are both very deliberate and, relative to competitors, under-stored. Canadian markets, particular Vancouver because of its proximity, and Toronto because of its size and location, would seem to be particularly attractive.

More than anything, Nordstrom is a powerful brand with a powerful customer following and the right strategies and tools (e.g., Fashion Rewards) to exploit these competitive advantages.

My expectation is that Canada, and Canadians, want Nordstrom!

Christopher P. Ramey
Guest
9 years 11 months ago

This is not an automatic win for Nordstrom. Canadians tend to be more fashion-forward.

John McNamara
Guest
9 years 11 months ago

I doubt Canadians are willing to pay a premium for service. So far the most successful foreign retailers have leveraged their scale to offer lower prices (Walmart), a unique and appealing assortment (Costco), or a combination of both (IKEA, H&M, Forever 21).

It will be interesting to see if Canada’s new-found wealth will last. Canadians have tended to shy away from brands in the past. The influx of rich immigrants, primarily from Hong Kong and Taiwan, has been the driving force of the fashion and luxury segments there. They would be key to Nordstrom’s performance north of the border. If anything, the Canadian market has rarely looked as attractive for Nordstrom as it does in 2011.

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