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Nordstrom (JWN) Local Retail Store Model to Drive Revenues

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Nordstrom, Inc. (JWN - Free Report) is on an expansion spree with its Nordstrom Local Concept — the company’s first modern retailing store that does not stock merchandise. Notably, this is quite different from the traditional retail approach and is a neighborhood store, which should cater to the needs of the customers in a better way as it is centrally located. These neighborhood hubs form part of the company’s local market strategy, which offer a seamless customer experience with exclusive services and design aesthetics.

Recently, the company introduced Nordstrom Local in Brentwood in Los Angeles, which is a roughly 1,200-square-foot store and mainly focuses on styling and alterations. Management plans to open one more of this conceptual store in Downtown, LA, on Oct 12. Spanning across 2,200-square-feet, the Downtown store is expected to provide on-site concierge and barber facilities in partnership with Baxter of California. Also, the store will offer repairing services for shoe, handbag and luggage along with a local cobbler. Consumers can also buy, grab and go food at the Downtown location.

While Brentwood store reflects a feminine atmosphere, the Downtown location replicates the city's unique vibes with an industrial decor. Customers at these locations will be able to consult personal stylists, enjoy Buy Online & Pick-up in Store facilities, curbside pickup, easy returns from Nordstrom.com and its other online sites, Trunk Club services, among others.

Notably, these hubs will also have Urban Outfitters’ (URBN - Free Report) Anthropologie Home collection. Earlier this year, Nordstrom and Anthropologie entered into a partnership, following which more than 200 items from Anthropologie Home were made available at the company’s select full-line stores and on Nordstrom.com. The Anthropologie Home collection offers categories such as kitchen, dining and entertaining, bed and bath textiles, room decor and more.

Simultaneously, Nordstrom launched a new feature — "Get It Fast" — on its website and mobile app in zip codes across the city. This feature has a real-time vision of inventory available no later than the following day. Impressively, customers can pick up their order or opt for free shipping to the Los Angeles address via their selected locations through this feature.

In October 2017, Nordstrom introduced its first Nordstrom Local store at Melrose Place in West Hollywood, CA. The company has received favorable response from customers for this location. The launch of Nordstrom Local in Los Angeles — one of the company’s most profitable markets — is likely to boost its revenues.

 

Nordstrom’s solid omni-channel capabilities and efforts to keep pace with evolving retail trends also bode well. This apart, the company’s significant progress on customer-based strategy is commendable. These factors are acting as propellants, with this Zacks Rank #3 (Hold) company's shares surging 28.8% year to date, significantly outperforming the industry’s 6.9% rally.

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