A new trend popping up in the retail industry is seemingly counterintuitive: brick-and-mortar stores that don’t actually stock and sell goods. Both Nordstrom and Zachys, a premier New York wine retailer, have recently announced concepts that focus more on the customer experience versus shopping for items.
Experiential retail has been a hot buzzword this year, as retailers seek to generate more foot traffic and keep up with customer demands for more personalized experiences. As 66% of U.S. consumers still note the importance of feeling and sensing a product while they shop, these new non-shopping concepts can help educate and empower consumers.
While these non-merchandise stores certainly won’t replace your typical brick-and-mortar location, there is room for both in the landscape. “For customers, the main benefit is convenience. Being able to quickly get to a small store to pick up products ordered online or to try on goods is helpful,” said Neil Saunders, Managing Director and Retail Analyst at GlobalData Retail in an interview with Retail TouchPoints. “The no-merchandise store does not necessarily replace the necessity of visiting a larger store, but it does give the consumer more choices.”
Nordstrom’s version, called Nordstrom Local, will launch in West Hollywood, Calif. on Oct. 3. It will take up only 3,000 square feet of space — much more compact than a typical Nordstrom store, which averages 140,000 square feet. While there may not be any product to push in the small space, it is likely that Nordstrom is saving on costs, according to experts.
“Product-less stores, of course, benefit the retailer in the sense of not having to carry inventory,” said Ed King, Co-founder of High Street, a retail experience consultancy, in an interview with Retail TouchPoints. “This means they save on shipping costs — products can be shipped to the consumer directly from the warehouse. Additionally, retailers enjoy lower rent as the store is more or less a front-of-the-house-only space.”
Reaching More Customers At A Lower Cost
Saunders added that the perks of non-merchandise stores also include access to markets and locations that may not be able to support a full-size store. This essentially gives retailers access to more consumers in a cost-effective way.
While there will be clothing inside for customers to try on, there won’t be any inventory to purchase at Nordstrom Local. Instead, consumers can come in, enjoy wine, beer and espresso, and collaborate with on-site stylists to create personalized wardrobes that they can order virtually and have delivered to the store that same day.
“Shopping today may not always mean going to a store and looking at a vast amount of inventory,” said Shea Jensen, who led the Nordstrom Local initiative as SVP of Customer Experience, in an interview with the Wall Street Journal. “It can mean trusting an expert to pick out a selection of items.”
Additional features of Nordstrom Local include:
- Buy online, pick up in-store/curbside pickup;
- On-site alterations and tailoring;
- Same-day delivery; and
- Manicure services.
“As the retail landscape continues to transform at an unprecedented pace, the one thing we know that remains constant is that customers continue to value great service, speed and convenience,” said Jensen in a statement. “We know there are more and more demands on a customer’s time and we wanted to offer our best services in a convenient location to meet their shopping needs. Finding new ways to engage with customers on their terms is more important to us now than ever.”
Zachys Store Doubles As Education, Event Space
On a similar note, Zachys, based in Scarsdale, N.Y., introduced a new location in Washington, D.C. after noticing an influx of online and phone traffic from the area. The company’s president Jeff Zacharia said this showed the company that “there is a demand for a premium wine retailer and auction house in the market.”
Yet, this is no traditional wine store. Part of the space is dedicated to private storage areas for clients’ wine collections, while the other part features offices and an event room for tasting events, classes and corporate meetings. Customers can also pre-order wines that they can pick up at the 17,000-square-foot refrigerated warehouse.
Whether or not this new concept is a fit for all retailers, it is still a unique idea for those looking to be at the forefront of experiential retail. It will be interesting to see which retailers follow in Nordstrom’s and Zachys’ footprints.
“Product-less stores have a better chance of succeeding in segments where inventory is bulky or costly, where experiencing the product is key to purchase, and immediate possession isn’t critical to enjoyment,” said High Street’s King. “Motorcycles come to mind, as do appliances, furniture and art galleries.”