Nordstrom

[artyboy123]

Another US chain that couldn't understand the Canadian market (it doesn't help that it is in a mode of retail that is - for the lack of a better word - moribund).

AoD

Simply put it...Canadian are too cheap and don't like to spend tons of money on fashion! Or another reason is our climate given its vastly majority winter and "raincouver" Canadian rather spend money on practical attire rather trendy and fashionable.

 

[artyboy123]

Setting aside my past critiques of how they chose to design the TEC space; I would note, one of the problems they ran into here was that many of the brands they retail in the U.S. already had (sometimes exclusive) concession deals w/Holts; and/or HBC.

It's a different market, and they were never going to be able to replicate the exact same brand offer as in the U.S.; but what they needed to do was find the right substitutions. They also needed to be a bit more aggresssive in poaching from Holts or HBC; but they had a problem, which is that they had nowhere near the reach of either in Canada. (they were getting close to Holts, but with no Montreal presence.....)



I think it's again important to point out a different retail operating environment, including one with higher rents per ft2, and higher labour costs than many of their U.S. outposts.

A market with a bit less extreme economic disparity, and a bit lower disposable income in the median space, particularly after housing costs also changes equations.

That's not to let Nordstrom off the hook; its why you need to hire some management with experience in Canadian retail for your Canadian operations, so you understand how big the market is for you and where you can honour what customers who know you love; but also adapt your offer to fit the market.



That was bad.



This is an interesting statement. I am told that the Vancouver store was, at one point, the highest performing store in the entire chain.

It did fall off a bit; but was surely a money maker.

So I think it's important to ask why success in Vancouver, but not Toronto?

I would posit a few answers.

1) Much higher brand recognition in Vancouver. Nordstrom is based in Seattle, which had its flagship location as well. The proportion of Vancouverites familiar w/the brand would be higher than was the case in Toronto. No full-line Nordstrom in Buffalo, NY could be consequential.

2) The Vancouver market is more demographically similar to Seattle, as opposed to Toronto/Ottawa or Calgary.

3) They did a better job on the Vancouver store, relative to TEC.

4) Promixity to HQ allowed for greater direct intervention/resources/problem-awareness

5) Unique appeal of Vancouver to high end Asian nationals who made up a material portion of that market. Which did not apply in Toronto. (by nationals, I meaning citizens/residents of Asian countries flying into to Vancouver to shop)

the words from the wise!​

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[AlvinofDiaspar]

Simply put it...Canadian are too cheap and don't like to spend tons of money on fashion! Or another reason is our climate given its vastly majority winter and "raincouver" Canadian rather spend money on practical attire rather trendy and fashionable.

A more diplomatic way to put it is that we like "value" (just like we do in our architecture).

AoD

 

[artyboy123]

https://twitter.com/x/status/1631717505357029384

Gosh please Toronto needs to stop with another "food hall/chef hall market concept". I was quite disappointed with many of the food hall concepts across the city as I thought it be a nicer alternative to traditional brick and motor restaurants and a cheaper food selection.

Y'all know last time I was at Eaton centre food court and my bill comes out the equivalent of any stand-alone restaurant and the food quality is "meh" or "unfairly underwhelming".

 

[Northern Light]

Simply put it...Canadian are too cheap and don't like to spend tons of money on fashion! Or another reason is our climate given its vastly majority winter and "raincouver" Canadian rather spend money on practical attire rather trendy and fashionable.

A more diplomatic way to put it is that we like "value" (just like we do in our architecture).

AoD

There is truth in the above.

But again, I think we need to note, there are lots of Canadians shopping at Holts.

The thing is, Holts is 'HQ'd' here. They know the market, they're established; and if they misread something, they can turn quickly. Nordstrom didn't even open a Canadian head office at all.
They simply didn't get a good handle on the market; and when they misfired, the local store manager's didn't have the flexibility to fix things.

Sure, the luxury market is smaller in Canada, in both absolute and relative terms. But there is a market for more than just Holts.
But you have to know how large, where, and what they expect. You also have to be nimble, when problems arise.

I think a single Nordstrom in TEC; done properly, with experience Canadian oversight would have performed quite well, if you combine the total sales in their Toronto stores, they add up.
They just added too much square footage, too quickly, w/o doing their homework or putting in place the management team that could address challenges.

Not ever the mess than Target was; but still, many overtones of the same arrogance.
It's just 'America North"; if we do roughly the same thing we do here (in the States) and just skip over the bits we can't do (because Holts has exclusive rights in Canada to brand 'x') we'll do fine.

Uh, not so much.

 

[AlvinofDiaspar]

Gosh please Toronto needs to stop with another "food hall/chef hall market concept". I was quite disappointed with many of the food hall concepts across the city as I thought it be a nicer alternative to traditional brick and motor restaurants and a cheaper food selection.

Y'all know last time I was at Eaton centre food court and my bill comes out the equivalent of any stand-alone restaurant and the food quality is "meh" or "unfairly underwhelming".

Fast food quality for restaurant prices. They think they can charge extra just because there is salvaged wood, white furniture, exposed bricks and black-painted ceilings with mechanicals?

AoD

 

[artyboy123]

Fast food quality for restaurant prices. They think they can charge extra just because there is salvaged wood, white furniture, exposed bricks and black-painted ceilings with mechanicals?

AoD

Gentrification at it's best!

 

[AlvinofDiaspar]

Gentrification at it's best!

I guess it's all very experiential, in a you've just been had kind of way.

AoD

 

[Northern Light]

The single best article I have seen looking at the reasons for Nordstrom's fail in Canada, and more generalized take on American retail failures in Canada come from Retail-Insider:

Why So Many American Retailers have Failed in Canada [Feature/Expert Interviews]

Following the announcement of Nordstrom's exit from Canada, Retail Insider interviewed a panel of experts about why various retailers from the US have struggled here.

retail-insider.com

In the article, multiple retail consultants/experts are interviewed and offer their insights.

You will see many of the same arguments I have already made above and a few extra for good measure.

100% read-worthy!

****

I think the biggest takeaways were

1) No Canadian head office equals trouble

2) Insufficient due diligence before entering the market.

3) Bringing 'The Rack' stores here was a mistake

4) They opened too many mainline stores, with the general take being similar to my own, that Ottawa, Calgary and at one least one Toronto store were excessive (ie. less would have been more)

Also noted, however, were changes in currency value; and the fact that department stores in the U.S. continue to struggle as a market segment, even moreso at the high end; it's not as if the U.S.- based stores, taken in the aggregate are doing stellar trade. The feeling is that w/no Canadian high-level management it's just an 'easy' retrench to exit Canada which will attract less negative publicity in the home market than say exiting an entire region of the U.S. that under performs.

 

[DSC]

We could REALLY do with a Time Out Market here and this space might really suit it! They have one in Montreal https://www.timeoutmarket.com/montreal/en/ (I have not been there yet) and the Lisbon one is fantastic. Properly curated food etc.

 

[AlvinofDiaspar]

The single best article I have seen looking at the reasons for Nordstrom's fail in Canada, and more generalized take on American retail failures in Canada come from Retail-Insider:

Why So Many American Retailers have Failed in Canada [Feature/Expert Interviews]

Following the announcement of Nordstrom's exit from Canada, Retail Insider interviewed a panel of experts about why various retailers from the US have struggled here.

retail-insider.com

In the article, multiple retail consultants/experts are interviewed and offer their insights.

You will see many of the same arguments I have already made above and a few extra for good measure.

100% read-worthy!

****

I think the biggest takeaways were

1) No Canadian head office equals trouble

2) Insufficient due diligence before entering the market.

3) Bringing 'The Rack' stores here was a mistake

4) They opened too many mainline stores, with the general take being similar to my own, that Ottawa, Calgary and at one least one Toronto store were excessive (ie. less would have been more)

Also noted, however, were changes in currency value; and the fact that department stores in the U.S. continue to struggle as a market segment, even moreso at the high end; its not as if the U.S.- based stores, taken in the aggregate are doing stellar trade. The feeling is that w/no Canadian high-level management its just an 'easy' retrench to exit Canada which will attract less negative publicity in the home market than say exiting an entire region of the U.S. that under performs.

Quote from the article: When foreign retailers ask me about Canada I tell them to visit Canadian Tire.

Third degree burn.

AoD

 

[Northern Light]

Quote from the article: When foreign retailers ask me about Canada I tell them to visit Canadian Tire.

Third degree burn.

AoD

LOL.

It's actually a good suggestion. Not because CT are an amazing retailer, but because they are almost unique globally in their particular assortment and to some degree, in the way they merchandise same.

They were also one of the originators of loyalty programs at scale with CT money and now 'Triangle Points'

It's simply a good way to make an American who thinks 'This market is just like our market' go "What the"

The point of which is not to emulate CT, but rather to encourage market research and to realize that consumer preferences and your competition will likely be different than what you experience back home.

 

[AlvinofDiaspar]

LOL.

It's actually a good suggestion. Not because CT are an amazing retailer, but because they are almost unique globally in their particular assortment and to some degree, in the way they merchandise same.

They were also one of the originators of loyalty programs at scale with CT money and now 'Triangle Points'

It's simply a good way to making an American who thinks 'This market is just like our market' go "What the"

The point of which is not to emulate CT, but rather to encourage market research and to realize that consumer preferences and your competition will likely be different than what you experience back home.

Not say it is a wrong suggestion, but it simply speaks to the degree we Canadians will put up with retailers that only masochists would love. What's service? It's like they are doing us a favour.

AoD

 

[Northern Light]

Not say it is a wrong suggestion, but it simply speaks to the degree we Canadians will put up with retailers that only masochists would love.

AoD

When I think of the U.S. and McDonalds and Walmart; inedible product, low quality product, poorly paid staff and locations with little to no ambiance and that are often rather auto-centric......I get the same vibe.

(of course we have those two in Canada, but I could list others)

Funnily enough though, I could say the same of several European retailers. For some it's not their fault (government regulation); while others have aspects of their business plan that would send most Canadians apoplectic.

Everything from odd-ball and short hours, to officious and surly staff to a layout that seems made to drive someone to madness; to a lack of complimentary products in some cases.

CT is just our particular version of succeeding as much by momentum as anything else.

 

[AlvinofDiaspar]

When I think of the U.S. and McDonalds and Walmart; inedible product, low quality product, poorly paid staff and locations with little to no ambiance and that are often rather auto-centric......I get the same vibe.

(of course we have those two in Canada, but I could list others)

Funnily enough though, I could say the same of several European retailers. For some it's not their fault (government regulation); while others have aspects of their business plan that would send most Canadians apoplectic.

Everything from odd-ball and short hours, to officious and surly staff to a layout that seems made to drive someone to madness; to a lack of complimentary products in some cases.

CT is just our particular version of succeeding as much by momentum as anything else.

I think we almost see it as a sport to have stores with utterly disorganized merchandise posing as an opportunity for discovery and deals. I didn't grew up in this particular retail culture and find the sheer inability to find what I wanted with a minimum of fuss (so that I can get out ASAP) exasperating. Online shopping is a godsend.

I have also noticed that - because of our small market - it is super easy for existing retails to suck out all the oxygen from potential competitors.

AoD