I can remember the day that Nordstrom opened at International Mall, in September, 2001. It was a nasty, stormy day and my girls and I braved the weather to explore the new store. It goes without saying that we found lots of merchandise to get excited about, and enjoyed the high level of service. We also loved the in-store Bistro, with delectable lunch items in a chic setting. Nordstrom’s quickly became our go-to store!
Nordstrom awards frequent shoppers with some nice perks: free shipping, free alterations, advanced notice of sales, early shopping days for the sales and Nordstrom notes. These notes, redeemable in the store, are doled out in $20 increments, $20 per thousand spent. We had a boatload of those notes! Our family was classified at Level 2, out of 4, so a modestly pleasing designation for the Phaneuf family. Recently, I was demoted to Level 1.
I recovered from the shock and realized that Level 1 was not a bad level, nor a reflection of my social status in the community. Rather, it was a reflection of how little shopping I am doing in the store or at Nordstrom’s at all. True, my girls are not shopping on my account any more, much. So that accounts for some of the drop in spending. Yet really, the reduction is a sign of the times, that in-store retail faces an uphill battle against online shopping.
Last month the Real Estate Investment Council (REIC Tampa) hosted a dinner where the topic was: Is Industrial the New Retail? The speaker compared the loss of retail outlets with the growing demand for warehouse space. Consider the demise of many of my past haunts: Borders, Sports Authority, The Limited, hhgregg, Circuit City, BCBG; to name a few. Many chain stores are closing a large percentage of their brick and mortar stores in favor of online shopping. All of this merchandise will be stored in large warehouses around the country and either shipped or delivered to your door. Hence, the demand for Industrial warehouse space and the reduction in demand for retail outlets. Who needs to go to the Mall anymore?
The Sunday prior to this REIC dinner, I read an article in the NY Times Sunday Business section (4/16/17) titled: Is Retail at a Historic Tipping Point? The author makes this point: “E-commerce players, led by the industry giant Amazon, have made it so easy and fast for people to shop online that traditional retailers, shackled by fading real estate and a culture of selling in stores, are struggling to compete.” He goes on to say that this loss of retail commerce has had a profound ripple effect on the labor force, most of whom have been obsoleted, permanently, by online shopping.
I am a subscriber of Stitch Fix. It has replaced my trips to Nordstrom! Stitch Fix has an extensive questionnaire that allows the shopper to communicate her tastes. From this profile, a personal shopper is assigned to fulfilling a box of 5 items from which I choose which or all to keep. Hint: if you keep all 5 pieces, they offer a 25% discount on ALL of the items. This is powerful motivation to keep them all.
Fortunately, a shopper can also select the frequency of receiving these tempting cartons and I selected every other month. I also have a “one in one out” policy so my closet is not overflowing. As I reflect on my newly acquired habits, I see very clearly how and why on line retail is doing so well. I embrace the ease of shopping, shipping and nearly immediate delivery. If the experience was not so streamlined, I would be back at the Mall, for sure!