Nordstrom Opening Different Kind of Store in NYC
New Yorkers waiting for Nordstrom to open its first flagship store in the Big Apple will still have to wait. The department store has yet to announce it has found a location within the city. That, however, doesn’t mean there is no news from the department store chain. The company is opening a new store under a different name, Treasure & Bond, this Friday in SoHo.
The Treasure & Bond concept is an experiment for Nordstrom. For one thing, it will be less than one-tenth the size of a typical Nordstrom at just above 11,000 square feet. For another, the store is being operated as a non-profit with proceeds going to charity. The company said it would change charities receiving donations every three months.
According to the Treasure & Bond website, "part gift boutique, part art gallery and part neighborhood gathering place, it’s an exciting new experiment in giving that has, at its core, one simple goal: To help people help people — and to do so with wit, imagination and style."
Last October when RetailWire first reported on Nordstrom’s plan to open the store, most members of the BrainTrust were skeptical the concept would benefit the chain’s eventual move into the city with a flagship store.
Doug Stephens, president of Retail Prophet, was among the dissenters.
"In researching for the book Spend Shift, co-author John Gerzema noted that of all the brand dimensions they studied, the one that had shifted the most in terms of its impact on consumer purchase decisions was ‘kindness’ — not exclusivity, not price leadership or even quality," wrote Mr. Stephens. "Consumers are shifting their dollars and brand allegiance to companies that demonstrate corporate kindness and social conscience. I applaud Nordstrom not only for recognizing but also for so boldly acting on it."
Ken Stumphauzer, an analyst at Sterne Agee, told The New York Times, "They’re probably trying to generate good will before they make themselves present in New York with a full-line store. This will essentially give them some perception or added insight into the New York consumer, and specifically into the more affluent full-priced consumer."
Peter Nordstrom, executive vice president and president of merchandising at Nordstrom, told the Times that the company is viewing Treasure & Bond as a retailing lab.
"It allows us to be way more nimble and to learn," he told the paper. "If we opened something like this, and had it be Nordstrom in some way, it would end up disappointing — people would show up and say, ‘What’s this?’"
Discussion Questions
Discussion Questions: Will the learning from Treasure & Bond help Nordstrom as it moves toward opening a flagship store in Manhattan? Do you see other retailers developing similar concepts?
To thine own self be true, Nordstrom. Your greatness rests in being exactly what you now are: Nordstrom. While you will undoubtedly learn some things from your Treasure & Bond lab, me thinks you already know what your flagship store should be in New York.
We are in an age where the new technical sciences are providing new and important specific consumer data. That’s good and essential…but over reliance on such science appears to be crowding out the fine art that’s inherent – perhaps necessary – in consumer retailing.
Perhaps Nordstom should stick with the small format, not just as a lab but as their NYC operating format. The trend for department stores has pretty much been downward over the long term with fewer stores and sales. It may be a format whose time has passed.
If a department store company is going to grow, it is going to have to be outside of the department store model. Nordstrom recently made a significant effort into online, as they should. Among their initiatives was purchasing HauteLook.
While this effort is billed as a one-up venture, if it is successful, be sure that there will be more ROI in rolling this concept out (cross channel) than building another department store.
With regard to the charity aspect, it is a nice touch, but if the store concept works, it will be dropped.
The key quote in the article is “It allows us to be nimble”
What Nordstrom is doing is very admirable and should be applauded. I’m not sure exactly what they hope to learn relative to opening a full-line store, but they will no doubt garner a lot of goodwill and recognition among the target customer group.
I believe the remarks by Stumphauzer and Peter Nordstrom. Having spent 20 years in NYC and its environs, I know it’s a tricky and quirky market. Hands-on experience in a limited, lab-like unit such as this seems prudent. If it succeeds, I see other major upscale retailers copying the parts of it that they believe would work for them.
I like the idea of a retail lab, and agree the classic department store model may be past its prime. I think Nordstrom will not only learn the NY shopper mindset, it will test various models other than art gallery, gift boutique and neighborhood gathering place, and then cull what resonates into a new type of Nordstrom flagship store.
Make no mistake, Nordstrom is moving toward something that will surprise and delight shoppers. They understand the essence of their brand very well, and will not disrupt it, but strive to enhance it for the future.
“Shatter the routine!”
Good for Nordstrom.
At the risk of questioning my “betters,” as it were, I think those who talk about the “department store model” being passe are missing the point: the model was as much about price as actual (physical) format, and N is squarely in the demographic–upscale–that is doing well; indeed, they take pains to NOT call themselves a department store.
But enough for now about semantics. Do I think this will be a learning experience? It’s hard to say, since it’s not clear exactly what they hope to accomplish. What this really reminds me of is Wanamaker’s establishment of its downtown “Liberty St. Shops” in the ’40s (and its thwarted efforts to establish similar shops in midtown); the experiment, of course, ultimately proved unsuccessful–as evidenced by the absence of the Wanamaker name in New York today (or anywhere else for that matter); and that was a store that already had an established presence in Manhattan…it seems timid may not work very well in the Big Apple.
Nordstrom will learn from this because they will treat it as a lab, a learning experience and of course, the profits going to charity will not hurt them in any way. The charity piece may throw it off kilter a little as people will be drawn there because of that and not so much the product lines.