Hearts first, wallets second: Nordstrom tiptoes into New York City

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Nordstrom is a Seattle-based high-end retailer that has long been lauded for its outstanding customer service. Today, Nordstrom has 116 locations throughout the U.S. and is a specialty retailer that aims to offer its customers, “the best possible service, selection, quality and value.”

In fact, the stories about what lengths Nordstrom associates will go to deliver superior customer service have become something of lore in the retail industry. This includes the most oft-repeatedtale about a man returning tires to a Nordstrom in Alaska, which didn’t even sell tires; or the associate who ran out to the highway to retrieve a car part lost by a customer. Confirmed or unconfirmed, these stories of amazing service aren’t surprising when you know that for years Nordstrom had only one rule for its associates—use your best judgment in all situations.1

Today, Nordstrom doesn’t have a New York City location (there is a Nordstrom Rack in Union Square, which is the off-price division) but many west coast transplants, like me, have been wondering when this blessed event might occur. We may now have a hint.

In anticipation of a full-service store, Nordstrom has taken an interesting approach to building a reputation in and gathering market data about our community before it “officially” arrives in New York City. The company has opened a non-profit specialty shop where all proceeds will go to local charities, the roster of which will change every three months. It built the shop out of recycled and repurposed materials taken from other Nordstrom locations. Dubbed “Treasure & Bond,” the Nordstrom name does not even appear in the store.

Most new retailers announce their arrival in New York with billboard announcements, in-store specials and balloons. It’s generally a take it or leave it proposition for the customer; the retailer sees how it goes in the first few months and adjusts accordingly. Nordstrom’s unofficial entrée into the New York market is clever for three reasons. First, management will figure out how specialized the store needs to be for the New York market without taking a huge financial risk. Stocking a small shop with limited edition or handcrafted items is less expensive than stocking a 250,000 sq. ft. space. Second, it will assess quickly and precisely what New Yorkers want. Having Nordstrom associates collect live data to build their own customer profiles will be more precise than a general consumer study. Finally, Nordstrom will build good will and trust within the community before it ever opens a store—New Yorkers will certainly figure out who is behind this venture as they are a curious and chatty bunch.

Building a reputation and goodwill ahead of one’s arrival is a clever strategy—market testing in your own little store is wise financial risk avoidance. When Nordstrom brings its great service and curated wares to the city, it will be welcomed like an old friend coming home, having already endeared itself to the hearts, aesthetics (and wallets) of New York.

1 Spector, Robert and McCarthy, Patrick; The Nordstrom Way, Wiley 1996

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