Erik Nordstrom being interviewed by Courtney Reagan, CNBC
Two of retail’s biggest traditional players — Nordstrom and Macy’s — opened Shoptalk 2019 by revealing how they will take on 2019, fresh off a holiday season that didn’t quite reach expectations. Erik Nordstrom, Co-President of Nordstrom, noted during his keynote that despite challenges during the holiday season, during which same-store sales decreased 1.6% in Nordstrom full-price stores, he is undeterred about investing heavily in the brick-and-mortar channel for the foreseeable future.
“Our stores are long-term investments,” Nordstrom said. “We don’t get concerned with short-term trends.”
While the retailer continues to evolve to match changing consumer shopping habits, Erik Nordstrom also appears to want to change the perception of how the business is labeled. “We don’t think of ourselves as a department store”; we prefer the term “specialty fashion retailer.”
Nordstrom discussed different metrics showing how the retailer is meeting shoppers across all channels, including:
- 50% of in-store visits start with an online session;
- 35% of online sessions start with in-store visit;
- For just under 50% of store purchases, the customer used a mobile phone to support their journey;
- Contribution margin from e-Commerce sales is the same as in-store sales; and
- Online sales represented 30% of Nordstrom’s $15.5 billion revenue in 2018.
Today’s retail stores no longer exist just to display merchandise, Nordstrom said. They should be a place for engagement, faster returns, pickups and alterations. All of these characteristics have already been put to the test in Nordstrom’s recently opened first-ever men’s store in New York City, and they will be major drivers of the retailer’s 320,000-square-foot full-line store, set to open across the street from the men’s store in fall 2019. Nordstrom referred to this upcoming store opening as the biggest investment in the company’s history.
Despite these continued investments and an overall blurring of the lines between brick-and-mortar and digital, Nordstrom admitted that his company still needs to improve its ability to adapt to retail’s continued changes. “We think we’ve been too slow,” Nordstrom said. “We need to move faster, public or private it’s the same.”
Two Macy’s Sessions Take On Store Roles, Mobile Growth
Macy’s took the spotlight in two separate keynote sessions. The first, with CFO Paula Price, included insight regarding the retailer’s changing retail formats. The second involved reinvigorating the department store’s customer experiences, with Chief Digital Officer Jill Ramsey and Brand Experience Officer Rachel Shechtman.
Price noted that Macy’s divides stores into three segments: flagships (stores that host the company’s iconic events and are designed to excite customers); magnets (shopping destinations); and neighborhood stores (driven mostly by convenience and routine purchases, as well as fulfillment centers for returns/BOPIS).
Although Macy’s has closed nearly 100 stores since August 2016, with eight of those closures coming in 2019, the retailer certainly understands the overall value that a physical presence brings. Price noted that when Macy’s closes a store, online sales in that market decline.
During the second session, Ramsey noted the company’s increased emphasis on mobile as a way to integrate both in-store and online channels, stating that nearly 66% of online traffic and more than 50% of online sales come from mobile. “We’re famous for our front windows, but Macys.com is our front window now,” Ramsey said. “This smartphone is our front window now. Our app customer is our most loyal customer.”
Shechtman, who also is the Founder of the recently acquired STORY, gave some insight into the next step of the Macy’s/STORY era. As part of STORY’s exclusive collaborations with the Peanuts Global Artist Collective, Macy’s will launch unexpected collaborations with Peanuts at 100 Macy’s stores in Q1 2019, offering shoppers limited-edition Peanuts-related merchandise.