Nordstrom waited many years to develop in Manhattan, however now it’s making up for misplaced time. It launched its males’s retailer final yr and is opening a seven-story flagship retailer this fall.
And the upscale department-store chain has extra up its cuffed sleeves. In September, it’ll open two small Nordstrom outposts in New York, in the West Village and on the Upper East Side, as a part of its new Nordstrom Local chain, the retailer introduced Wednesday.
The two smaller shops is not going to carry merchandise. Rather, they are going to be hubs for on-line pickups and returns, in addition to providers like tailoring and private styling. Unlike the Nordstroms in American malls and the colossus the corporate is erecting in the center of the town, the scale of the brand new outlets might be comparable to a Lululemon or a Dunkin’ Donuts.
The firm’s analysis confirmed that many Manhattanites don’t significantly need to go away their neighborhoods in the event that they may help it, a vital purpose for including the hubs.
“What we’ve heard from customers is that by and large, outside of getting to work, they do like to stay in their neighborhoods and it’s tough to get around,” Shea Jensen, Nordstrom’s senior vice chairman of buyer expertise, stated. “We want to use this as a way to complement our footprint, not double down, where we know we have customers.”
The new areas add to the ambitious push that the Seattle-based Nordstrom has been making in New York after decades of contemplation. The city is the retailer’s biggest market for online sales, but its physical presence has largely been limited to its Nordstrom Rack discount chain. By the end of 2019, there will be six Nordstrom locations in Manhattan: the flagship, which will include women’s merchandise; the men’s store; two Nordstrom Racks; and the two Local hubs.
Of course, with the Local chain, shoppers will have to get used to the idea of walking into a Nordstrom that doesn’t sell anything.
The retailer introduced Nordstrom Local in 2017 in Los Angeles, where it now operates three shops. Some offer individual services, like manicures or shoe repair, based on their location. But their biggest appeal seems to be the convenience they provide for online orders and alterations. The company said customers who visited a Local spent on average two and a half times what other Nordstrom shoppers did and made returns earlier, which allows the retailer to turn its inventory faster.
Building Local hubs in New York and Los Angeles makes sense, said Oliver Chen, a retail analyst at Cowen, because the locations are so important. Nordstrom’s top 10 markets account for more than 60 percent of its business. The New York and Los Angeles markets in particular are expected to make up more than 25 percent of Nordstrom’s sales of full-price merchandise in the future, the company said last year.
“It’s really just about convenience and Nordstrom trying to be where customers are, and also doing it economically,” Mr. Chen said. “Clearly, a flagship is a big commitment, so spreading out within the same market is an interesting idea.”
Nordstrom considered data about its current and potential customers when selecting its new locations, along with neighborhood density and demographics, but would not disclose the length of its leases. The West Village hub will be on Seventh Avenue near 12th Street while the Upper East Side location will be on Third Avenue close to 73rd Street.
The retailer is still deciding what services it may offer at the shops based on residents in the area. For example, Ms. Jensen said that the amount of families on the Upper East Side might lead the company to offer services like shoe-tying classes in that location.
“What the data showed us in L.A. is this really activates customers,” Ken Worzel, chief digital officer of Nordstrom, said of the Local chain. Their presence can prompt customers to make more online orders, like shipping numerous shoes to the hub, knowing that they can easily return those they don’t want, or have clothing altered. The locations, which will have fitting rooms, will accept returns of both Nordstrom and Nordstrom Rack merchandise.
Visitors to the Local stores in Los Angeles have been younger than the chain’s average consumers, Mr. Worzel said, adding that was in line with demands for convenience from young people around a variety of services, like ride-sharing and food delivery.
Nordstrom is trying to cater to New York customers in a variety of ways. It’s not the only newcomer in town — Neiman Marcus, which hails from Dallas, just opened in Hudson Yards. But it also wasn’t long ago that Henri Bendel closed its flagship store in New York and Lord & Taylor gave way to WeWork, the office-sharing start-up.
“It’s the fashion capital of our country and the retail capital,” Mr. Worzel said. “There’s lots of options and lots of established brands and it’s really incumbent upon us to help people understand what it is about Nordstrom that’s different and how we can fit into their lives.”