• Retail Dive

Nordstrom plots 2 more merchandise-free stores

Dive Brief:
  • After the successful launch of its merchandise-free concept store in Los Angeles' West Hollywood neighborhood in October 2017, Nordstrom is planning to add two more such stores in the LA market, Co-president Blake Nordstrom said during the company's annual shareholder meeting last week, according to a transcript.

  • "Nordstrom Local is something that you're going to hear more about, and we think we have the underpinnings of something very special there," he said. A Nordstrom spokeswoman confirmed to Retail Dive that the company is planning two new locations in LA, and that depending on its success, the concept may expand to other metropolitan areas like Manhattan. She could not share further details.

  • The new stores would likely be similar to the current concept shop, which is focused squarely on services like buy online, pickup in store in addition to tailoring, stylist consulting and even nail services.

Dive Insight:

The industry has been bubbling about Nordstrom's "merchandise-free" store since before it opened. While technically, there is often apparel hanging on racks inside of the 3,000 square foot store, it's for appointments only. And that part of the concept has had many in the apparel world wondering: How does that work?

Until now, Nordstrom hasn't said much about whether it was, in fact, boosting sales, but committing to several more locations is an indication that the store is showing positive signs. At the Shoptalk conference in March, Shea Jensen, SVP of customer experience at Nordstrom, took the stage to talk up the high customer engagement she had been seeing with the store early on. The concept is all about customer acquisition at the neighborhood level, as well as building brand loyalty and eventually — hopefully — sales.

The merchandise-free concept is a bit of an anomaly in such a margin- and transaction-driven industry. But the store isn’t meant to replace Nordstrom’s full-line stores or the off-price Rack locations. Its purpose is to complement stores by building up the company’s lifestyle branding — one of Nordstrom’s key differentiators amid fierce competition. The store is also a test bed, one that emulates the growing showroom trend touted by nimble e-commerce darlings such as Warby Parker and Bonobos. On the conference call last week, co-president Eric Nordstrom said that the local model has been performing well. "By having a store that's all about services, it's been easier to communicate to customers what we can do, and engagement with all those services has been terrific," he said. "So, we're seeing nice growth in what we call our digitally enabled sales, and we'll continue to do that."

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