Retail

Why Online Retailers Go To Nordstrom To Try On Physical Retail

While this early part of 2016 has been some tough sledding for Nordstrom on the sales and revenue front, The Street in many corners continues to look favorably on the high-end retailer.

Why?

Well Nordstrom, before it was cool, invested big in its eCommerce infrastructure — a move that has seemingly paid off since 21 percent of their sales now come via digital.

It also helps that a lot of very hip up and comers in the online commerce place Bonobos, Shoes of Prey, Baublebar and Trunk Club, to name a few that have exclusive distribution deals with the retailer. Through a reasonable long game, Nordstrom has positioned itself as the department store du jour for hot young brands in real world commerce.

At Nordstrom, those brands are getting a good chance at exposure, since new research indicates that Nordstrom has a statistically higher percentage of locations in the “good malls” of America. Some 62 percent of Nordstrom’s 120-plus stores are in elite malls like Roosevelt Field in Long Island, Short Hills in New Jersey or The Galleria in Houston.

That’s much better than No. 2 on the list, Bloomingdale’s, which has such real estate for 50 percent of its stores at such locations. Macy’s (the bronze medalist here) has just 11 percent of its stores in such malls.

“We think that Nordstrom’s high exposure to ‘MVP’ malls makes it the most attractive wholesale distribution partner for both emerging traditional and online-born brands that wish to expand their distribution to new markets,” Credit Suisse analyst Michael Exstein wrote in the note, according to Fortune.

Plus, Nordstrom is committed to expanding their relationship with their emerging retail partners beyond real estate alone. Nordstrom bought into Shoes of Prey last year, and bought out Trunk Club entirely in 2014.

So Nordstrom’s secret sauce in a sentence: Location (location, location) + the cool kid’s brands official seal of approval. Let’s see if that recipe continues to bake up some increased sales figures.

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