Brand Innovation Drives New Retail Strategy

Chris WrenSeptember 14, 20174 min

It’s not easy to be a retail brand these days. Every few weeks it seems there is yet another story about some major retailer either abandoning or downsizing multiple locations. Online shopping has fundamentally changed the way consumers buy as well as the ways brands sell. It’s hard to show an industry that has been as fundamentally disrupted.

In a report from the (US) National Retail Federation, Ray Gaul, vice president of research and analytics with Kantar Retail says, “We are witnessing a transformation in which the physical environment now needs to serve three shopper missions rather than one. The old one was a full shopper mission where the consumer discovers products, selects the products and then transports the products home. The two additional missions are buy online, pickup at store and showrooms and product information, these will require two things … store remodels and store closings, or both, and a new economic model to cover costs and deliver profits. Companies that have embraced this new way of shopping have begun to deliver better profit per square foot than companies that have not.”

The transformation that’s happening right now isn’t always pretty or painless. But as with all times of rapid change, there is massive opportunity for those that have embraced this new era of retailing, and have the resources (and organizational will) to drive fundamental change.

Nordstrom is one such brand.

In a few weeks, they will launch a clothing store with no clothes for sale. Called Nordstrom Local, it will be very small, just 3,000 Sq Ft instead of the normal 140,000. Instead, customers can seek out personal stylists who will bring merchandise to the small store same-day, they can pick up items bought on-line, also same-day. An on-site tailor will handle all alteration needs, a feature for which the brand is renown, and will offer beer, wine and espresso (of course).

While it may seem that a clothing store with no inventory would be an inefficient way to shop, Nordstrom believes it will streamline the experience for customers who are already pressed for time. “Shopping today may not always mean going to a store and looking at a vast amount of inventory,” Shea Jensen, Nordstrom’s senior vice president of customer experience, told the Wall Street Journal. “It can mean trusting an expert to pick out a selection of items.”

As a brand, Nordstrom has always differentiated itself on devout attention to customer service, and the Nordstrom Local concept store seems to be built around this principle, rather than a gimmick or add-on intended simply to get people in the door. And this concept is the latest in a line of recent innovations the brand has deployed that work around the idea of phenomenal customer attentiveness.

While Nordstrom provides plenty of innovations that keep the competition on their toes, their culture which drives this impressive activity should be an example for all brands. Here’s some of what Nordstrom demonstrates:

  • Revisit existing definitions and challenge your brand’s status quo often. Nordstrom seems to ask the question “What does it mean to shop,” continuously. By challenging conventional definitions, they’ve rolled out digital and physical improvements that make it easy for the customer to interact with the brand, on the customer’s terms.
  • Always be thinking about how to create a valuable experience. Nordstrom’s store without inventory seems to meet a need their customers (at least those near West Hollywood) have. It’s definitely on-trend. And while the concept store is something Nordstrom hopes will be permanent, even short-term experiences like Cheeto’s Pop-Up Restaurant or Nike’s “Off-Campus” experience offer ways that customers can interact with brands in new and unexpected venues.
  • Get serious about business transformation. A pivotal key to what Nordstrom has been doing involves leveraging technology to enhance operations internally and regarding the customer experience. While nearly everyone says they want to help their business transform, too many throw technology at the problem without unpacking the organizational blockers or legacy business processes that technology can improve. Transformation is culture-driven and assisted by the technology, not the other way around.

Bringing a concept to life is always exciting for a brand. Time will tell if, indeed, the Nordstrom Local concept store will play a valuable role in the modern definition of shopping, either way we can learn from their efforts to evolve.

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