I'm commenting on Nordstrom's latest strategic moves: their brick-and-mortar localization and online positioning, the "Closer to You" program and their concession strategy. However, before I do, I want to put these strategic moves into the proper context. They all emanate from a philosophy embedded in the Nordstrom's DNA from day one. And you know what it is. Nonetheless, I will repeat it just to connect the dots from where they started to the evolution of their current strategies. What a Quaint Philosophy: The Customer First How many times …
Experience
Let Them Eat Cake: Luxury Spend Is Up Among Next-Gens
Next-gens may fear economic uncertainty, but that’s not stopping them from making high ticket purchases. HighSnobiety reports that, by 2026, millennials and Gen Z will make up more than 60 percent of luxury spend. Chinese next-gens are leading the way. The average Chinese luxury consumer is a mere 28 years old –– that’s ten years younger than the global average. McKinsey reports that China’s luxury market will double by 2025, comprising a staggering 65 percent of global growth between 2018 and 2025. But here’s the biggie: 70 percent …
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RH Builds Out its Horizons
Remember when Restoration Hardware was the quirky DIY-fixer’s catalog for people restoring Victorian houses? It’s come a long way from its home-spun roots back in 1979 when Stephen Gordon founded it. Progressive CEO In his most recent shareholders letter, Gary Friedman, the company’s current chairman and CEO, updates RH’s progress since joining the company in 2011: “The first two decades saw us evolve from a nearly bankrupt business with a $20 million market cap and a box of Oxydol laundry detergent on the cover of its catalog, to the leading …
Welcome to the Era of Conscientious Luxury
The seemingly insulated luxury market has never experienced a year like 2020 when personal luxury goods sales dropped $78 billion from 2019 – a 23 percent decrease year-over-year – to a total $266 billion in 2020. With the pandemic threatening both consumers’ health and finances, the industry’s decline was more than double the 9 percent drop experienced over two years during the 2008-2009 recession, according to Bain & Company. It is not expected to recover to 2019 levels until the end of 2022 or early 2023. Luxury Through the Ages Bain …
Amazon’s Superpower
Unintended consequences of Covid-19 are that it’s easier to find a captive audience and we now regularly spend time waiting in lines. In the spirit of making lemonade out of Coronavirus lemons, I decided to conduct a quick, socially distanced, unscientific poll outside a Brooklyn Trader Joe’s where my husband was queued up. My question was, “What kind of a business is Amazon.com?” Of the 11 people who took out their earbuds and talked to me, nine of them said basically “online retail.” Another said, “A company that should be broken up because …
Establishing Credibility with Next-Gen Consumers
Trust is paramount when selling to a generation that lists “shared values” above all other brand attributes but price. However, establishing trust with next-gens is no longer a simple proposition. A strong “About Us” page and mission statement won’t cut it anymore. Not when next-gens monitor every aspect of a retail business –– from a product’s source materials, to the warehouse in which it was made, to how employees are compensated on the front end. Establishing trust with young consumers isn’t an impossible feat, it just takes a lot more …
The Winter of Our Discontent
Sometimes it helps to stand back and look for the big truths hiding in plain sight amidst massive mounds of little insights, false positives, mistaken assumptions and, well yes, wishful thinking. Such a truth revealed itself as I took my regular Fitbit-inspired walk around Manhattan today. I started on the Upper East Side in the 90s and headed 35 or so blocks south, before heading back up: my roughly10,000-step daily requirement and all logged before 9:00 AM. Invigorating, right? Well, not quite. An Urban Wasteland Typically, I walk down …
Gift Yourself
It’s the little things in life. Would you rather get a $38 tube of lipstick in a utilitarian brown cardboard box … or in a beautiful white Chanel-branded mini shopping bag filled with samples wrapped in a silky pouch, all packed in a white Chanel-branded shipping box – delivered by FedEx for no additional fee? And Amazon thinks it has a prayer in delivering luxury? And while we’re at it, what other companies take the time and make the investment in the high touches that transform an online purchase into a brand relationship? Apple, for one. …