Source: http://www4.columbian.com/news/2014/feb/05/nordstrom-close-vancouver-mall-lloyd-center/
A couple days ago, the professors assigned a pre-reading about the Nordstrom expansion, and soon after, we had a debate in class over whether Nordstrom should expand into Canada. Throughout the debate, I heard many interesting insights for both the pros and cons of this expansion, but after doing a little more research myself, my opinion is that Nordstrom should not expand into Canada.
First off, Nordstrom already has a strong brand image in the United States, and their brand reputation, along with the loyalty of their strong customer base are some of the main driving points for revenue. That may not be the case in Canada. In Canada, Nordstrom will face competition from companies such as Holt Renfrew, which sells products in the same category and is already established as the go-to place for luxury shopping.
Second, operations and supply chain management will become much more difficult in Canada than in the U.S. The company already has to overstock their shelves just to accommodate for the time it will take for more products to arrive. This is a gamble that if sales do not go through, can result in excess inventory.
Lastly, as I mentioned in my last blog post about luxury department stores closing down in Hong Kong, and among other places, what customers seek nowadays is variety, not luxury. If a successful brand like Coach had to close down in Hong Kong, one of the busiest shopping cities in the world, then what are the chances that Nordstrom will last long in Canada? As an extension of this point, I definitely agree with Professor Paul Cubbon’s prediction that these large department stores will eventually all close, or change into something else. Therefore for the time being, I believe Nordstrom should stick with where they already have the reputation and customers, and avoid venturing into an unknown and unpredictable competitive market.