NEW YORK — For Nordstrom’s big women’s flagship opening on Broadway and 57th Street here next week, here’s the playbook…
The 320,000-square-foot, seven-level Nordstrom will be a “differentiator” in an already packed New York City retail market, seeking to capture business primarily from West Side residents, tourists, and commuters from the tri-state area. And it will not only be by virtue of Nordstrom’s renowned service and breadth of assortment, or the lineup of exclusives and unique brand experiences and collaborations with Nike, Everlane, Burberry, Madewell and others.
[This is the second in a series of articles leading up to the Nordstrom women’s flagship opening in Manhattan.]
“There is some stuff here you would not find everywhere else but I don’t want to overplay that,” Pete Nordstrom, Nordstrom Inc.’s co-president, told WWD. “I don’t think that’s the differentiator. The differentiator is the way we serve our customers — how we bring the online and physical together, like buy online and pick up in store. That’s not unique to Nordstrom but we think we can execute it better than most because it wasn’t an afterthought.
“A significant majority of people that have an online purchase to return want to bring it to a physical store. We know we are going to get a lot of returns. They can return anywhere through the store,” at checkouts and designated return areas.
“Part of what gives us an advantage is just having a newer building and everything that goes with that. With any of our competitors, aside from Neiman’s (in Hudson Yards), their buildings are old and things have changed over the years quite a bit, not the least are the data, technology and digital aspects,” he said. “They impact the physical shopping experience. That has all been considered here. We are not in a reactive mode or playing catch up. We considered all those elements and embedded them into the store. Something as simple as no matter where I am in the store, I’ve got great cell reception or I’ve got Wi-Fi. You can walk around in some of these other buildings in New York and get into places where you’re not connected at all.”
In creating the flagship, said Nordstrom, “We have considered how a person lives today. How things like cell phones are completely integral to how people live their lives.”
Inside the fitting rooms, he added, “You have the ability to communicate with a salesperson and get what you need by using technology. Technology is the single greatest enabler of customer service that exists. And our whole differentiator is about customer service. So we embrace technology to elevate service.”
It’s Wednesday morning and Nordstrom, dressed casually chic in a Boglioli jacket, Zegna pants and Dries van Noten shoes, was relaxed, despite the rising anticipation of the long-awaited Oct. 24 opening, as he discussed the Nordstrom offering and what the women’s flagship means to the $15.5 billion chain.
“We hope to appeal to a broad range of people, because we have different price points, like on the fifth floor in women’s with Topshop and what happens in our BP and Savvy departments. That’s the entry point.
“Then you come to women’s designer apparel. There is no limit to where that goes. But both work together. I think that’s how a modern customer wants to shop. We can be the solution for customers more broadly.”
Compared to typical Nordstrom locations, luxury, as a percentage of the 57th Street store’s offer, is “relatively big for us,” Nordstrom observed. “Let’s call it 35 percent of our offering. Downtown Seattle, Vancouver — those are places that are disproportionately luxury.” On 57th Street, “two of the seven floors are exclusively luxury.”
Among the key designer brands on display: Chloé, Dries Van Noten, Fendi, Givenchy, Saint Laurent, Erdem, Giambattista Valli, Isabel Marant, Stella McCartney, Partow, Cecilie Bahnsen, Bode, Eckhaus Latta, Jacquemus, Molly Goddard and Simone Rocha.
“With Burberry and Nike, we have completely bespoke, one-off, specific concepts for this store, different from anything you have seen before,” said Nordstrom. “No one else has Topshop. The only place you can get Topshop in the U.S. is at Nordstrom.”
Everlane, the brand that’s transparent on the costs of manufacturing its fashions and utilizing ethical factories, gets a spotlighted moment in Nordstrom’s innovative “pop-in” format showcasing new merchandise themes and labels on a monthly or so basis. “Everlane does have their own stores and web site but you can’t buy Everlane at any other department store except Nordstrom. That’s cool,” said Nordstrom.
He emphasized the more seasonal character of the merchandising on 57th Street, citing cold weather coats, gloves and scarves as prominent. In the Nordstrom men’s store, which is also on Broadway directly across from the women’s flagship, “Last year, we did a really good job of having a lot of newness in cold weather merchandise,” deeper in the winter season. “We purposely brought in new cold weather offerings in January and February and it was successful. Typically, it all comes in and gets cleared out through the Christmas season, and the coldest months here are January and February and stores don’t have the goods.”
The retailer, as expected, is coming in with impactful footwear and beauty floors. With beauty on the main floor, “We want [shoppers] to know we’ve got a robust beauty department. With shoes, too, we are trying to be obvious that shoes are big and important to us.”
Key beauty lines include Charlotte Tilbury, Tom Ford, MAC, La Prairie, Sisley and Kate Sommerville.
Designer shoe brands include Chloé, Fendi, Givenchy, Saint Laurent, Prada, Malone Souliers, Celine and Gucci, while contemporary shoes include Steve Madden, Cole Haan, Birkenstock, UGG, Sam Edelman and Veja.
Handbags include Coach, Tory Burch, APC and Clare V., and jewelry includes Monica Vinader, Alexis Bittar, Kendra Scott and Maria Tash.
Nationally, women’s apparel overall has been a softer part of Nordstrom’s business, which executives attribute to changing buying patterns and “self-inflicted” mistakes. Women’s, Nordstrom said, has been impacted by “style compression,” meaning, “Mothers and daughters wore different types of clothes. That’s really changed. You’ve got 15-year-olds shopping with 50-year-olds. They may not buy the exact same thing but style-wise, it’s become very similar. A teenager, a working woman, a mother, a retired person — that all has fallen on top of each other. We used to have these different segments to serve distinctly. Now we do less business.”
The casualization of America, Nordstrom added, has led to less occasion dressing and consumers having one wardrobe instead of two or possibly three. That’s also meant less business in apparel, according to Nordstrom. However, the accessories, beauty and shoes businesses have been growing. “We’ve rolled with it,” he said.
Sneakers are a standout. “If you go to the shoe department, it’s got to be 40 percent of the business. When I was a shoe buyer it was 5 to 10 percent of the business.”
Asked what he expects the New York flagship to sell most of, Nordstrom replied: “The best stuff is kind of the best stuff everywhere and I think that is probably going to be true here as well. The biggest thing for us are the editing considerations, because you can’t fit everything in here. We think we have done a good job here but I assure you we will be in reaction mode based on what we’ve learned in the first couple of months about what performs and what doesn’t.”
Initially, the Nordstrom team wanted to include men’s wear in the 57th Street flagship. With that, “Everything felt like it would become compromised,” Nordstrom said. “Coming to New York, we felt we had to deliver the best of Nordstrom. We had discussions about maybe we shouldn’t have kids, or maybe we shouldn’t have restaurants. Those were just not good ideas. We have kids. We have restaurants. [Actually, seven food and beverage destinations.] So we had to put men’s across the street, which wasn’t our preference. It was the reality of what we had to do.”
It took years and years before Nordstrom selected a site for its Manhattan flagship, which was revealed back in 2012. “It was always on our mind as something we were open to. We were mostly on the receiving end,” with developers approaching Nordstrom with potential Manhattan sites, he said.
“In the Hudson Yards case, the developer reached out to us and we did come close. We also considered alternatives and [57th Street] just happened to be one at the same time.”
Hudson Yards would have provided plenty of space, Nordstrom said. “It would have been more efficient space because it’s a box. This is not a box. It’s not as efficient as Hudson Yards, which is a good project and we were really interested. But for us, this is better. Our orientation toward the West Side gives us an opportunity to build a foundational, consistent business with people that live here. And then when you layer on top of it the great tourist opportunity and the tri-state worker/commuter, all that traffic that’s created, those three elements make it work.
“Make no mistake — we are going to be successful here if we are relevant and compelling to people that live in this general area.”
The store forms the base of what will become the world’s tallest residential building, called Central Park Tower, which is expected to be completed in 2020 and should add to the customer traffic.
With the opening — it’s Nordstrom’s first department store in New York City — the retailer is in every major city in the U.S., becoming truly national.
“The fact is, we have been a very successful company without being here,” Nordstrom said. “It was never like we had to be here. The reason to go here is because the store would actually be accretive. It would be a good business decision, not just a marketing decision. So the bar was set pretty high. That is why is was difficult for us to get here. It had to work on all different levels. It came down to a bottom-line decision.”
Early reports placed the costs of creating the store at $500 million, but the number has gone up. “We bought our entire space, and then there is the construction. Those are two different numbers,” Nordstrom explained. “When you put the whole thing together, buying the whole space, designing, building it, furnishing it, the number is bigger than what you’ve said. It’s a bigger number.”
He declined to specify the cost, or the volume goal, other than saying, “It will be our number-one volume store. It needs to be. If it’s not, we’ve got work to do. I am not going to tell you the number. The store needs to be more productive than any other store we have.”
Asked about past industry estimates forecasting around $300 million in sales, Nordstrom responded that based on sales per square foot across the chain, and expectations that the store will be the retailer’s biggest volume generator, “You get north of the numbers you are talking about,” Nordstrom said.
Reaching its goals depends on getting shoppers to ascend and descend all of the selling levels. With seven, including two below ground, the flagship is Nordstrom’s most vertical store.
“There are some idiosyncratic moments here; it’s got a different shape,” Nordstrom acknowledged. “It’s got its own issues, but I actually think that’s what makes it cool. It’s not a plain box. There is a lot of discovery.”
New Yorkers, the executive added, are accustomed to shopping vertical retail. “That’s the nature of the city, everything has become vertical because it’s so dense,” Nordstrom said. “But our job is to have interesting things on every floor. So it’s purposeful that we have a big restaurant on the top floor. It creates a destination. There’s a reason we put that up there. There is a reason we have restaurants on the bottom floor, too. Those are usually good traffic drivers. But then we can’t merchandise the fifth floor or L-2 as afterthoughts. There has got to be something happening there. We think there is. For example, we have this Pop-In program Olivia Kim has done. We purposely put it on the fifth floor because it’s cool to discover. Everything is going to perform better on the main floor but we can’t cram everything on the main floor. We’ve got to extend it. We’ll see. We’ll learn.”
Nordstrom already operates two Rack off-price stores, its men’s store, as well as two Nordstrom Local service hubs in Manhattan. Yet the women’s flagship is really the pivotal moment.
“It’s hard to imagine being the most highly regarded national retailer if you are not in the number-one market in the country,” Nordstrom observed. “Even though we do a lot of business in this area — we do a big online business — the fact that we didn’t have a Manhattan store was always an opportunity for us. Now that we’re here, the way everyone thinks about it is now we are competing on a much more international level. People are going to see our company in a different light. Maybe even discover a Nordstrom that they have not seen before. People know who we are but many don’t have much experience with us or they had an experience that’s a one-off in some random location. Maybe they haven’t seen the best of what we have to offer. To be able to do something that is absolutely our best foot forward, that represents the most modern, complete iteration of what we are trying to do — that feels great.
“All the things that have happened along this journey and in the store, it’s all been thoughtfully planned and executed,” Nordstrom said. “Nothing is by accident. There are all these different touch points everywhere. I’m very proud that it’s all coming to life.”