Why Nordstrom Local is Big News

Today, Nordstrom announced the Nordstrom Local concept and an opening of a 3,000 square foot location in West Hollywood. This is a big deal.

Real Estate and Inventory have always been potential albatrosses in shoe & apparel retail. But with Local, Nordstrom can eliminate inventory as a risk and can use real estate as an advantage.

Revenue Growth is a challenge for Nordstrom. There are only so many great malls in the country. Arguably, Nordstrom is in most of them. Similarly, Nordstrom Rack’s store fleet numbers 225+. How many more locations are there? The company has always focused on ecommerce, so that isn’t a missing hole where they can grow revenue faster than the rate of the market (or Amazon.)

But Nordstrom Local can focus on high-streets, in high-end shopping areas, with low inventory risk. A great example – Highland Park, Texas. Highland Park Village is home to Chanel, Theory, St. John, Jimmy Choo, a movie theater, and a high-end grocer. There are great reasons to shop there. But a trip to Highland Park Village, in all likelihood, would not be in addition to a trip to North Park Mall. Nordstrom would have lost out on a target customer’s shopping occasion. Now, open a Nordstrom Local there. Throw in the BOPIS, a nail-salon, and a personal stylist, and now the customer receives additional services from Nordstrom at a convenient location.

And your inventory risk isn’t increasing substantially. Personal Stylists could follow a guide-shop model, at least in-part. Nordstrom has been a leader in BOPIS. Its new drive-by pick up is a great experiment too. And although Trunk Club probably isn’t a revenue driver, it’s presence – along with refreshments – will make it easier for a boyfriend to stomach an hour-long shopping experience, and not just a fifteen-minute experience.

Nordstrom continues to experiment and innovate. This is great to see.