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Smartphones Are Pushing Nordstrom to Reconfigure Stores

Customer service has long been the name of Nordstrom’s game. Now, the retail company is doubling down on service to win with customers and pave the way for sustained success.

How the company plans to do that was the subject of a discussion by Jamie Nordstrom, president of stores, at the WWD Apparel + Retail CEO Summit on Wednesday.

To court the customer seeking a constant supply of newness as well as the thrill of discovery, Nordstrom has been incubating millennial-friendly brands like Everlane and Reformation with the understanding that offering desirable product is only half the equation for the service-oriented shoppers.

At the WWD Apparel + Retail CEO Summit on Wednesday, president of stores Jamie Nordstrom shared his belief that enhanced, high-touch service will form the basis for many stores in the not-so-distant future. Already, 30 percent of Nordstrom’s customer base are mobile-first shoppers, and the stores president believes that will swell to 50 percent over time.

Given that so many customers are choosing to engage with the department store company through their smartphones, many doors in its current store base either “may need to be configured differently or we may need to move them around town differently,” he noted.

Change, in that sense, is a necessity for the retailer. “If our stores five years from now look like they do right now, we would fail…. It’s expensive to reallocate space in a store, but it’s absolutely necessary,” the stores president said, explaining that better use of a store’s square footage doesn’t necessarily translate to shuffling product around.

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Perhaps stores should have some kind of service option or food or beverage experience to create an environment that we’re not yet used to seeing, he explained.

For now, Nordstrom is betting big on its local market strategy.

The retailer opened its first women’s flagship in Manhattan last month, completing a local service hub that includes a men’s store across the street and two small-footprint local market locations that complement two Nordstrom Rack doors and a Trunk Club personal shopping site. Nordstrom previously rolled out a local strategy in Los Angeles.

Local markets help Nordstrom leverage “existing assets” and meet customers where they conduct their daily lives, while attacking the “points of friction” plaguing those critical metro markets. But the stores president also emphasized that the analysis shirks a one-size-fits-all approach.

A strategy that works for one market will likely require a different “recipe” for another location, Nordstrom said.

Whereas most New Yorkers don’t drive, Chicago is home to 17 suburban Rack stores with great parking and proximity to a Whole Foods supermarket, said Nordstrom, suggesting that these midwestern off-price locations could be pick-up and drop-off hubs where customers can also have clothing altered.

“We’d be more convenient for a lot of customers,” he said, adding that a significant number of apparel purchases require alterations, such as the “unfinished pants that get delivered to a lot of people’s doorsteps.” It doesn’t hurt that Nordstrom also happens to be the largest employer of tailors.

Nordstrom’s ship-to-store option, which launched 18 months ago, “doesn’t seem like a creative thing to do,” the stores president said, noting the company’s surprise when customers in Dallas became the strongest adopters of the service, even though most occupy mansions with large driveways and probably don’t have much difficulty receiving packages at home.

Although he didn’t provide any specifics,” Nordstrom hinted at new options for gifting. “There are a lot of customers who can be better serviced during [the peak holiday] time, mid-November all the way through Christmas.

“There are some simple things we can do,” he added. “It’s about gifts at the right price point. It’s about gift-wrapping services….We’re going to go big on gifting in a way we haven’t done before.”