As I was scrolling through my social media news feed, I saw a post with an image that drew my attention, “Nordstrom’s new concept: A store that doesn’t stock clothes.” As a designer, both the exterior building design and the words “new concept” caught my eye. For some reason, a tiny Nordstrom got the best of my curiosity to read more.
Nordstrom is testing a new concept in Hollywood, CA that is focusing on three different retail strategies that can apply and lend well to financial institutions, as well as other retail brands.
Providing customers with an experience. The concept includes meeting spaces where customers can chat and get advice while enjoying a glass of wine, cold-pressed juice or espresso. Rather than having a large expansive department store that has in-stock sizes, why not provide that same service while offering more personalized experience. This concept can relate to many different sectors of retail, even including financial retail branches. Who wouldn’t want a glass of wine to discuss finances in a casual and comfortable atmosphere? I would gladly entertain some free advice on a topic that is most likely over my head and needs to be brought down to an understandable level.
Competing with online technology. This Nordstrom concept is targeted to compete with online stores due to the inability for customers to physically try clothes on. Many exclusively online retailers emphasize the savings of going without the overhead of brick and mortar buildings. Not only does online shopping set you up for disappointment of the final product, but it does not provide customers to opportunity to easily change their mind without the hassle of returns. As with retail, financial banking has struggled with finding the right mix of “bricks vs. clicks” or brick and mortar versus technology. Many banks and credit unions have already upped their websites to include remote capture, money transfer etc. But in today’s world, financial branches are willing to go outside the box to get you to come inside, have an experience and possibly consider taking out a car or home loan with them in the future. Brick and mortar branches may change in size and services offered, but the physical branches aren’t going anywhere anytime soon.
Neighborhood Hub. The idea of having a Nordstrom store in more walkable areas is an interesting concept. The massive department stores in the suburban malls seem to be out of reach of the target market. This concept would allow the size of the store to go from 140,000 square feet, down to 3,000 square feet. I see families are starting to move to areas where parents and kids can walk to a restaurant, store or bank. In this concept, Nordstrom is stepping outside the box and expanding their location options to include neighborhoods and urban options where they are more accessible. There is a demand on customer’s time and Nordstrom is reacting to this by trying to provide those services in more convenient locations. As with department stores, I see the size and scale of financial branches changing but in a different way. I see financial branches starting to limit the square footage of space devoted to teller transactions and lessening the wide-open lobby space for waiting. On the flip side, I see the meeting spaces, technology centers and touch down centers growing to draw that customer base into the branches by offering short seminars or hosting casual events.
All in all, we know the world of retail is constantly changing. I applaud Nordstrom in their efforts to rethink the world of retail. I also invite financial institutions to look at their branch networks to see how they can improve to fit today’s world of technology and innovation.