Nordstrom is bringing exciting retail experiences and products to consumers through its new flagship store in New York City, which is designed to “reflect the spirit of the city,” according to the company. The much-anticipated women's department store officially opened on October 24, 18 months after Nordstrom debuted its first-ever standalone men’s shop in Manhattan. The new 320,000-square-foot, seven-floor retail space on West 57th Street is another strategic tactic in the company’s reinvention of physical retail. A Renewed Emphasis on Destination Retail Major multibrand retailers such as Nordstrom, Target and Walmart are freshening physical retail with refurbished environments and new in-store technology, and we are seeing a new wave of investment into physical stores as key factor in retail reinvention. We predicted at the beginning of the year that a major trend for 2019 would be retailers introducing a new generation of flagship stores that offer “spectacular retail” (see our report on the top 10 retail trends for 2019 here). The launch of Nordstrom NYC exemplifies an industry-wide emphasis on destination retail. This aligns with our proprietary BEST framework, which is designed to help retailers strategize physical retail around four themes (see Figure 1): Brand Building, Experiences, Service and Technology Integration. [caption id="attachment_99115" align="aligncenter" width="700"] Source: Coresight Research[/caption]   Below, we have applied the Coresight Research BEST framework to the new Nordstrom NYC flagship store. Brand Building: Nordstrom collaborations open limited-edition store pop-ups In order to enhance its brand positioning and attract new consumers, Nordstrom has collaborated with various iconic brands to open limited-time specialty stores at Nordstrom NYC:

• From October 4 to November 17, clothing retailer Everlane is offering exclusive styles in its pop-up shop, known as “Pop-In@Nordstrom Everlane.”
• Christian Louboutin’s exclusive capsule collection is featured on the first floor (in addition to its permanent store on the third floor).
• Burberry has team with Nordstrom to open a pop-up that is centered around the designer’s Past, Present & Future curated collection.
• Limited-edition sneakers and a curated Nike collection are available at the hyper-modern “Nordstrom x Nike” boutique.

[caption id="attachment_99114" align="aligncenter" width="700"] Left: Nordstrom x Nike boutique; Right: Christian Louboutin’s pop-up store
Source: Coresight Research [/caption]   Experiences: Nordstrom is deepening customer engagement through unique food experiences The company opened six restaurants and bars at Nordstrom NYC to offer shoppers a unique dining experience. Nordstrom has partnered with two Seattle-based chefs—Ethan Stowell (a 2008 Food & Wine Best New Chef) and James Beard Award-winning Tom Douglas—to create innovative cuisines for its customers. The company operates a total of 259 restaurants across its 120 “full-line stores,” according to its 2019 annual report. [caption id="attachment_99116" align="aligncenter" width="700"] Wolf, one of the restaurants at Nordstrom NYC, offers “Italian-inspired small plates” and dishes that highlight the bounty of the Pacific Northwest.
Source: Coresight Research/Eater [/caption]   Services: Nordstrom NYC encourages charitable giving and offers new, express customer services Customer service has always been a point of differentiation for Nordstrom, and its new flagship continues this practice by incorporating new service concepts. Nordstrom NYC offers a donation program that makes it easy for contributors to give used clothing and accessories a second life, whilst also supporting local nonprofit organizations. Proceeds from the sale of the donated items go toward supporting community programs such as job training, education and access to healthcare. The donation depot combines charitable giving with sustainability, two values that appeal to young, millennial shoppers. [caption id="attachment_99117" align="aligncenter" width="700"] Nordstrom NYC is now accepting clothing donations.
Source: Coresight Research [/caption]   The flagship store also offers an array of new services and amenities, including in-store pick-up, 24/7 express services, three-hour same-day delivery and express return kiosks. Personal stylists assist with beauty needs at the Nordstrom Beauty Haven, where style boards provide inspiration. There are onsite tailoring and express alterations services, as well as a shoe and handbag repair station. On-site cell phone charging, free Wi-Fi, complimentary gift boxes and Nordstrom gift cards round out the current service offerings. [caption id="attachment_99118" align="aligncenter" width="700"] Left: The return kiosks at Nordstrom NYC’s first floor allow customers to scan and drop off returns items. Right: The Express Services on the lower level offers quick check-out and returns of apparel and footwear products.
Source: Coresight Research [/caption]   Technology Integration: Nordstrom looks to eliminate friction from brick-and-mortar retail by introducing augmented reality technologies Nordstrom uses in-store technologies to make the shopping experience easier to navigate and to eliminate shoppers’ pain points, while providing a unique experience. In beauty, MAC’s virtual try-on mirror with augmented reality provides shoppers with lip color recommendations. Through a touch screen and camera system, shoppers are able to browse lipstick color options and select one to be imposed on screen on their face. This means that consumers can easily try on multiple shades in seconds without changing their current makeup look. [caption id="attachment_99119" align="aligncenter" width="700"] The MAC virtual try-on mirror with augmented reality provides lip color recommendations.
Source: Coresight Research [/caption]   Another interesting technology featured in Nordstrom NYC is the fragrance finder machine, through which consumers are able to tap a touch screen to choose a fragrance to smell, which is dispersed through a ventilator. This offers a unique and fun way for shoppers to discover new scents. [caption id="attachment_99120" align="aligncenter" width="700"] The flagship store now features a fragrance finder that allows shoppers to easily discover new brands and scents.
Source: Coresight Research [/caption]   Key Insights into Nordstrom NYC Using our BEST Framework for Physical Retail. Shoppers are increasingly expecting to receive a higher level of experience from retailers, which is driving the destination retail trend. Having evaluated Nordstrom NYC against our BEST framework above, we assess whether the store addresses each of the four themes (indicated by a red star, as opposed to a black star for missing elements):

• Brand Building: B★ By housing pop-ups of iconic coveted brands, Nordstrom has curated an assortment that strengthens its position as a fashion retailer, spanning markets from luxury to street and sport.
• Experiences: E★ A unique shopping experience spanning products, services, advanced technologies and cuisine combine to differentiate Nordstrom NYC from other best-of-class destination retailers in New York City and beyond.
• Service: S★ A donation depot allowing for charity and sustainability is a next-generation service that could appeal particularly to millennials. Customer service seems to be Nordstrom’s main differentiator and competitive advantage. While most services are easily copied, the totality of customer service at Nordstrom continues to set it in a league of their own.
• Technology Integration: T★ New customer-facing technologies enhance the shopping experience and add a frictionless and playful element to product discovery.

[caption id="attachment_99121" align="aligncenter" width="700"] Source: Coresight Research[/caption]