In a time where traditional brick-and-mortar retailers are shutting down at a frantic pace, two retail stalwarts are showing the power of evolution. As retail continues to shift and be disrupted, including a record 9,300 physical stores closed in 2019, it’s the brands that are willing to evolve that will survive. Macy’s and Nordstrom are each taking a unique approach by evolving to stay relevant and set themselves up for long-term success.
Nordstrom Expands Into Secondhand Items
Nordstrom is known for its wide selection of brand-name items. But now, some of those items come with steep discounts just because they’ve been slightly worn. Nordstrom recently opened a secondhand boutique at its flagship New York City store and online. Called See You Tomorrow, the shop features discounted items handpicked from Nordstrom’s customer returns. The items are exactly what customers would expect to find at Nordstrom except for the fact that they were previously owned.
The sustainable, secondhand market is a huge growth opportunity for Nordstrom. The resale market is already worth $7 billion and is expected to triple by 2023. An estimated 56 million women purchased secondhand items in 2018, up from 44 million in 2017. Customers want sustainable fashion and to breathe fresh life into previously worn items. Nordstrom’s approach is a win for customers and the brand: customers can score great deals while also contributing to sustainable fashion, and Nordstrom can lower its carbon footprint in the notoriously environmentally un-friendly fashion world and work through its backlog of returned items. The evolution opens the store to a new wave of customers looking to score great items at discounted prices and has the potential to scale quickly to other locations and further growth online.
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Macy’s Shuts Down Stores To Incite Future Growth
On the other end of the spectrum is Macy’s evolving retail strategy. Although dramatically different from Nordstrom’s, it has the potential to be just as successful in the long run. Macy’s announced it will close 125 of its stores over the next three years, mostly those in weaker-performing shopping malls. The company will also move its headquarters to New York and streamline many of its internal departments and processes. The long-term shift is to create smaller stores outside of traditional shopping malls and be closer to where customers live and work. By creating a more efficient internal structure, Macy’s hopes to save money that it can invest into the new store strategy.
Macy’s evolution reflects changes in how consumers shop. Customers used to travel to department stores to find everything they needed for their homes and wardrobes in one place, but that shopping philosophy has been replaced by the convenience of online shopping and specialty stores. Macy’s hopes that by restructuring its stores to be where customers already are and offer products they already need, it can connect with a new generation of customers and push past the mall days.
Retailers Must Evolve Or Close
Over and over again, we’ve seen that the retail stores that close have failed to evolve with the times. Changing technology, trends and customer preferences have forever shifted the retail space. But brick-and-mortar isn’t dead; it’s simply evolving. Macy’s and Nordstrom show that there isn’t a one-size-fits-all approach to surviving these turbulent times. The key is for brands to understand their customers and evolve in ways that best meet their needs. Instead of sticking with the status quo or giving in to what many retail brands view as the inevitable, retailers need to evolve or run the very real risk of shutting down.
More than price or product, experience is a brand’s biggest competitive advantage. Building strong relationships with customers, understanding their needs and building an innovative experience to meet those needs is what turns retail stores into thriving businesses instead of just another statistic about closed stores. In the retail world, it’s evolve or be closed.