When the retail giant, Nordstrom, comes to mind, one may picture a sprawling, extensive store full of high end merchandise. In contrast, Nordstrom Local, Nordstrom’s newly conceived concept store, will have no merchandise within its 3,000- square- foot premises. The Washington Post article entitled- Nordstrom’s plan to attract shoppers: Wine, manicures — but no merchandise-describes how the new concept will work. Nordstrom Local offers free consultations with personal stylists, manicures, and returns/pickups services for their customers. After their consultation, customers can place an online order with the selections from their personal stylists and try them on in store when their order arrives. By having both an in store and online element to the new store, this new concept merges Nordstrom’s two primary revenue streams.
The layout of the Nordstrom Local store in Los Angeles intends to be “a neighborhood hub,” a model which other companies such as Apple are experimenting with. An NPR article states, “Customers will enter the store and find personal stylists in a “central meeting space,” where they can chat, get fashion advice and have a glass of beer or wine, cold-pressed juice or espresso.That area is surrounded by eight dressing rooms where they can try on merchandise.The store will have on-site tailoring and alterations.” The entire store is revolved around creating a convenient, efficient and hospitable environment for the customer, which differentiates Nordstrom from its competitors. I find that this new concept capitalizes on Nordstrom’s value proposition, which is their strong customer service.
By evolving and implementing their value proposition, Nordstrom has been able to stay relevant while other department stores have been downsizing and declining in value. In the NPR article, Shea Jensen, Nordstrom’s senior vice president of customer experience said, “As retail continues to transform at an unprecedented pace, the one thing we know is that customers value great service, speed and convenience.” By placing a value on the customer-employee relationship, Nordstrom has established an identity, unlike its struggling competitors. As shown in Figure 1, Nordstrom outranks its competitors in customer loyalty with a score of 66 percent.
Figure 1: Nordstrom ranks highest in customer satisfaction in a survey by Market Force
Nordstrom has done an incredible job of maintaining relevance in the digital age, and adapting their business model to succeed in a shifting industry. This concept store is promoting their website further, which is already experiencing positive growth. Figure 2 compares the positive growth that online sales are experiencing in each quarter from 2015 to 2016. Nordstrom owes its success to their recognition of the simplistic, efficient pace of life that society is moving towards and is adapting their business model to fulfill this.
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