The art of retail selling
Nordstrom embraces high design to create buzz and woo shoppers
The Nordstrom store at Yorkdale mall opening Friday has a curated art collection — in fact, from some angles it looks like a museum — and is designed to light up like a paper lantern at night.
And what does that have to do with selling apparel and accessories?
While design isn’t everything when it comes to sales, increasingly, retailers are investing heavily in what stores look like in order to create buzz, drive traffic and boost their bottom lines.
“We’re fond of saying that sales are the truth,” said Pete Nordstrom, co-president of the Seattle-based retail empire.
“There’s a lot of ways of trying to evaluate our success, but ultimately when you’re talking about a store, if customers like it, it results in more business.”
More business is something department stores in Canada need.
The sector has declined over the past five years to 2016, according to an October report by the market research firm IbisWorld Canada.
IbisWorld forecasts that over the next five years, the sector will contract by about 1.1 per cent a year, due to external competition from supercentres and e-commerce sites.
Meanwhile, the department store market is saturated nationally, and lowering prices and offering loyalty programs to attract shoppers has eaten into profit margins.
However, IbisWorld estimates that per capita disposable income will increase at an annualized rate of 0.7 per cent, which will encourage shoppers to splurge on high-end goods, and retailers like Nordstrom, Hudson’s Bay and Saks Fifth Avenue are likely to benefit.
At 200,000 square feet, the three-storey Nordstrom is the largest tenant in the new 300,000 square foot Yorkdale wing.
The store was built from the ground up in a space once occupied by a parking garage. “It took us six months to remove all the dirt – 45,000 truckloads of dirt,” said general manager Claire Santamaria.
The Yorkdale expansion is the largest of its kind in the GTA this year, and numerous mall tenants agreed to expand and renovate as part of the project, which has also attracted new retailers, including the first Canada Goose stand-alone store and the first Sandro and Maje, from France.
Both stores sell fashion and accessories, but in different environments.
Sandro offers a more androgynous look, whereas Maje is more distinctly feminine. “Our number one communication tool is our store,” said Paul Griffen, president and CEO, of SMCP North America.
“Visual presentation is absolutely critical to building brand awareness.”
In part because of increasingly small urban living spaces, millennials want to be out and they’re looking for a third place — not home or work — that reflects them personally, said Susan Carter, a Calgary-based principal at Dialog, which works with Canada’s largest mall operators, designing and renovating malls.
“They are very globally focused and part of that is to be out and with other people.”
“We are into an experience economy,” said Alain Giguère from CROP research, which conducts annual surveys measuring, among other things, consumerism levels among Canadians, which are on the rise. CROP’s latest research found that 58 per cent of Canadians agree that buying is one of the greatest pleasures in life — but they are also interested in experiences.
“That is the challenge or the opportunity for the retail business — to be able to create a unique experience while they are shopping,” Giguère said.
Social media is another force driving retailer interest in design, said Olga Haliuk, interior designer at Dialog in Toronto.
Retailers don’t want to show up cast in a bad light on Instagram or Facebook or Twitter because their store looks dumpy or dated.
“Social media is great at spreading good news, but it’s even better at spreading bad news,” said Haliuk, who was part of the team behind the first Shoes.com store in Toronto. “If you have bad design you will hear about it in a heartbeat.”
The Vancouver Nordstrom, built under the direction of architect and designer Dawn Clark, vice-president of store design, has been a huge success for the company, according to Pete Nordstrom.
“We’ve really ushered in a new era of store design over the last two years,” he said.
“We used to really — as everyone did, turn the store into a fortress — there weren’t really windows to the outside, we didn’t really have natural light, it was a much more controlled environment, but I think most people would agree it’s really nice to feel connected to the outside world and to have natural light is just a more pleasant experience and frankly, it really helps with the shopping decisions — you can get a much more accurate read on the way clothes look in real light.”
Clark said the store model has been turned inside-out at the new Nordstrom at Yorkdale: many of the services located at the perimeters of a store — including the elevators, have been set back to allow the store to be wrapped, as much as possible, in glass.
Asoaring atrium at the centre, with clerestory windows, allows more natural light into the space on all three floor levels.
“There is a lot of psychological research about what happens when you’re in a space that has high ceil- ings and openness to it; it allows you to be more creative, it allows you to be more explorative,” Clark said.
The chain employs an art curator, who selected the works on display in the store.
Exquisite store design is no assurance of success: Target spent an estimated $10 million renovating each of the Zeller’s stores it took over from Hudson’s Bay Company, only to retreat in defeat a year after landing in Canada.
Uneven earnings figures from Nordstrom in past months have analysts concerned that after steering clear of the woes afflicting competitors like Macy’s, closing100 stores in the U.S. this year, Nordstrom’s success no longer seems as assured as it once did.
“Although historically JWN (Nordstrom) was viewed as in an enviable position compared to department store peers . . . deteriorating top-line trends of the past few quarters started to put its immunity to secular headwinds into question,” wrote RBC Capital Markets analyst Brian Tunick, in a note to investors in September.