Nordstrom recently opened its first store in Canada in Calgary’s Chinook Centre. While the store is well stocked, bright and clean, it seems that they have learned little from other US retailers who have tried to crack the Canadian market. Here is our evaluation of where Nordstrom Canada was a hit versus a miss.
Excellent customer service.
The store was swarming with curious Calgarians. Customer service was not compromised because it was well staffed with friendly, trained associates ready to answer questions. The contrast was particularly apparent when we visited the Holt Renfrew store which was empty, and yet their associates seemed more interested in paperwork than the few customers in the store.
Nordstrom has been known to deliver legendary customer service, embodying many of the brand and loyalty building qualities that larger retailers sometimes lack, and it did not disappoint with this first Canadian location.
Comparable prices to the US.
Target Canada was harshly criticized for not having prices comparable to their US stores. Surprisingly, some of Nordstrom prices were in line with those found in their US stores. We compared across a few items and found prices were within 0.5% of the same items in the US. With all the outrage surrounding the prices of other US merchants who have come to Canada with huge markups, this is a hit for consumers.
This flagship was not unique.
Many Canadians have shopped in a Nordstrom store in the US. The launch of the first store in Canada raised expectations. Whether it was with an exciting new look or new technology and offers, Nordstrom had to deliver a uniquely Canadian experience. However, there was nothing special about the store.
Successful customer experiences are built on over-delivering on customer expectations and offering great personalized service. When we interviewed consumers in store, we heard sentiments like, ‘It is the same as the US but, more expensive.’ and ‘There is no reason the switch from The Bay.’
No demonstrated knowledge of the local consumer.
A new store is not an overnight affair; time to market means time to learn about the local consumers who you are trying to attract. Proper market and consumer research leads to a store format and/or product that are tailored to the market.
The Whole Foods Store in Brooklyn is a great example of using market research to meet customer needs. Their shelves are full of specialty and gourmet products to satisfy their customer’s appetite for locally sourced foods. Unfortunately, it didn’t seem that Nordstrom invested in learning about the local consumers.
Like so many US merchants who open their doors in Canada, Nordstrom simply brought their US assortment to Canada, with the exception of the Calgary Flames jerseys in the children’s department. Here again, consumers quickly realized that they had not done their homework. We heard comments like, ‘The store is full of evening dresses. Who has much of a need for that?’ There was an incredible opportunity to partner with Canadian designers, but this was clearly not a tactic for Nordstrom Canada.
Efforts at loyalty building should improve.
Loyalty is derived from a combination of intrinsic (pleasure derived from the action) and extrinsic (a reward from another for a job well done) actions. Nordstrom has developed a Canadian loyalty program that rewards with 1 point for each dollar spent. After spending $2,000, you receive a $20 reward. While a $20 reward may be significant for someone making $25,000/year, it has a low value to the consumer Nordstrom is targeting; a high income earner. So, did they balance this out with great intrinsic rewards? No!
A common acronym for rewards within loyalty programs is SAPS: Status, Access, Power and Stuff. “Stuff” is clearly an extrinsic reward and it is what most loyalty programs offer in abundance. Status, access and power are intrinsic rewards and are what can build a true emotional connection with a brand. Where are intrinsic rewards more apparent than in the personal shopping suites offered by many luxury merchants?
This kind of offering delivers the “S” and “A” of SAPS: status and access. The more status the reward provides, the higher the stickiness of the consumer to your brand.
Status and Access are so important that at the Yorkdale Mall in Toronto, Holt Renfrew built a personal shopping apartment to reward and encourage their best customers. This was lost on Nordstrom, who offer personal shopping in the Calgary store, but there are no suites. You can book a stylist who will consult with you and pull some items for try-on. But this is done in a regular change room: nothing special to make the consumer feel like they have any status or special access.
Overall, Nordstrom’s arrival in Canada could have been better. There was nothing exciting to capture our imagination. Only time will tell if Calgarians are happy to have a piece of the US transplanted as is.