Nordstrom's New Inventory-Free Concept Is Risky--But Just May Work

On Monday, The Wall Street Journal reported that upscale department store chain Nordstrom (NYSE:JWN) is readying a new concept that is much different than its other retail ventures: a store that doesn’t even sell clothes.

Called Nordstrom Local, which opens October 3 in West Hollywood, California, this new store concept will focus on personal styling and consultations, and prospective customers will be able to make appointments "online, over the phone or in-person," said Nordstrom in a statement.

When customers enter Nordstrom Local, they’ll likely notice it’s much smaller than a typical Nordstrom location. The concept is only 3,000 square feet, measuring just a fraction of the size of the company’s mall-anchored flagships. But that’s the point: Local was designed in mind to be convenient, a time-saving option for shoppers on the go.

“As the retail landscape continues to transform at an unprecedented pace, the one thing we know that remains constant is that customers continue to value great service, speed and convenience,” said Shea Jensen, Nordstrom senior vice president of customer experience.

“We know there are more and more demands on a customer's time and we wanted to offer our best services in a convenient location to meet their shopping needs. Finding new ways to engage with customers on their terms is more important to us now than ever,” Jensen continued.

Another deviation from a typical Nordstrom department store, and your regular retailer, is that Nordstrom Local won’t have any clothes in stock. Instead, there will be eight dressing rooms where customers can try on certain items of clothing, and if you find something that works, the personal stylists will then “retrieve goods from nine Nordstrom locations in Los Angeles, or through its website,” writes the WSJ.

Additionally, any orders placed on Nordstrom.com by 2 p.m. can be picked up at Nordstrom Local, and the store will also be able to accept returns of items bought online of from other Nordstrom locations.

More than anything, Nordstrom Local is service-oriented, and in addition to styling services, customers have access to the retailer’s other amenities like Trunk Club styling, Buy Online, Pick-Up In-Store, onsite alterations and tailoring, same-day delivery, and curbside delivery. Local will also offer manicures and a bar that offers coffee, pressed juices, and wine or beer.

Nordstrom isn’t the only retailer experimenting with smaller format stores. Target (NYSE:TGT) , in particular, has been notably expanding this kind of concept in urban areas, while fellow department stores Kohl’s (NYSE:KSS) and Sears (NASDAQ:SHLD) have been shrinking a good number of its existing locations.

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