You know the expression \”Go Big…or Go Home?\” Well, for Nordstrom, it\’s more like \”Go Home…and Go Big.\”
As the upscale department store faces the severest challenge in its history, ramping up its home furnishings department and offering a full-blown assortment of housewares, textiles and home décor could generate as much as $500 million in additional sales every year. No other initiative it might be considering has the potential to be as impactful as does doubling down in home. With traffic in its prime shopping center locations severely diminished, consumers increasingly gravitating to value-driven retailers like Walmart, Target and off-pricers and areas for growth at a minimum, home represents Nordstrom\’s best bet.
Home Crowded but not Like Fashion
Not that the retail landscape for home furnishings is any less competitive than it is for apparel, jewelry or cosmetics, the core of the company\’s business. But the home sector has a distinct profile that plays to Nordstrom\’ strengths. That\’s because unlike better, higher-end fashion, home furnishings are underrepresented in the department store channel. Bloomingdale\’s is the only national player in the space that has a fully developed home business, spanning from home textiles and housewares to furniture.
[callout]Could home furnishings be the most important place for Nordstrom to be moving into right now? Name a better one.[/callout]
The other main competitors have little if any home. Saks Fifth Avenue and Neiman Marcus each has a smattering of giftable offerings like candles, vases and perhaps a decorative pillow or two but that\’s basically it. None of the mainstream department stores like Macy\’s, Dillard\’s or Belk truly play in the better home space, instead focused more on mid-price and even promotional goods.
Hard numbers for Bloomie\’s home business are difficult to estimate. Home Textiles Today, the business publication, estimates the store did about $150 million in retail sales last year in that category. Housewares would be comparable in size and when you add in furniture, rugs, mattresses (a bigger category than most people think), kitchen and tabletop, the total home business the store does approaches the half a billion-dollar mark.
How to Get to Half a Billion
Nordstrom has more than three times as many stores as Bloomingdale\’s, so it\’s easy to see how it could match that revenue total in a relatively short period of time. And the retailer wouldn\’t be starting from scratch. For years, it has featured a \”Nordstrom at Home\” alcove in most of its stores, measuring between 1,000- and 5,000-square-feet. The department typically focuses on giftable products, including the now-ubiquitous candle assortment, as well as glassware, paper and stationery, seasonal foods and home textiles products ranging from decorative pillows and throws to bed and bath items.
And over the years, Nordstrom has gone further into home from time to time. When Westin Hotels first started selling its Heavenly Bed mattress collection featured at its properties, Nordstrom was the exclusive retailer selling the line. And just this month, the retailer signed a deal with Casper to begin selling the direct-to-consumer brand\’s mattresses and accessories in 31 of its stores.
Online Nordstrom\’s home assortment is even broader with complete textiles, tabletop and housewares offerings. The only classification not fully represented is furniture; there are some accent pieces available but not core upholstered, living room, bedroom or dining room products.
Making Room for Rooms
So, while Nordstrom has a toe or two in the home business, adding a full department to the Nordstrom physical footprint would be no easy task. Clearly some other departments would need to be cut back to accommodate the 20,000- to 30,000-square-feet (at a minimum) needed for full textiles, housewares and tabletop departments. Furniture, mattresses and rugs would require an additional similar amount of space. With its typical 200,000-plus-square-feet footprints, that\’s a sizeable task. Yet many retailers will admit their current stores are too big for the way people shop today so trimming apparel, beauty and fashion accessories areas might not be so difficult. In fact, it might be the solution to the oversized stores most of physical retailing is grappling with today.
So, it is doable and, again, if Nordstrom is to grow its business, there aren\’t a lot of other product line options. Even Nordstrom realizes this. In announcing the Casper deal, Olivia Kim, Nordstrom vice president of creative projects and home, said, \”Now more than ever, our homes are the most important places in our lives.\”
Could home furnishings be the most important place for Nordstrom to be moving into right now? Name a better one.