Tag Archives: Nordstrom

March 28, 2023 · 01:55

Ways to skin a cat

Yes, it is an old expression, yet anytime I use it, the Cheshire Cat gets a little upset with me. Well thats all fine I say, he disagrees. To start this off, I need to take you back to the 21st of March when I wrote ‘The unplanned story’. The story (at https://lawlordtobe.com/2023/03/21/the-unplanned-story/) gives rise to new IP I had, but it is not about the IP. It is about the quote “The image is based on identity and interaction. You see, that need is not effort, it is engagement. Market Research (at least a few of them) have seen that engagement is the metric that really matters and Augmented reality is the core of that and that is what is missing in malls.” Yes, I saw that it was about Augmented Reality, or so I personally belief. Yet CBC (at https://www.cbc.ca/news/canada/edmonton/edmonton-mall-cashes-in-on-alternative-tenants-to-fight-canada-wide-slump-1.6787534) gives us ‘Edmonton mall cashes in on alternative tenants to fight Canada-wide slump’ and that is what I love. Someone found another way and that is great. With their “The Bonnie Doon Shopping Centre is reinventing itself with unconventional vendors and local clubs” I love it, they are creating a new way of engagement. It does not matter, I am firm in my believe that my IP will be a solution. What I love is that someone found another way it is great (and it gives rise to my train of thought). Local communities are often forgotten and now we get “Radio Control Racers Edmonton took over a storefront in the building last month. President Randy Van said the first few weeks have been a massive success for both the club and the mall” this opens up so many options, it does not hurt my IP (which is a little bit on my mind), it merely gives the rise to engagement (not the ring). Engaging with your audience is the solution, it always way. As I have no idea how Eaton Mall will use the 220,000 square foot to create engagement, but it shows what was missing. Even now whilst Eaton Mall is getting back on its feet, it is still well over 20% short of what was (a seeming impression made by the videos I watched).

In the end there are many ways to skin a cat (sorry Cheshire Cat). It merely requires us to look at that equation differently and the Bonnie Doon Shopping centre in Edmonton (where the oilers are from) has done a decently remarkable thing and that also requires recognition. They took the equation in a different direction and yay to them, they pulled it off.

This is he kind of ingenuity I applaud, because we see too little of it anywhere. So enjoy the day and consider what the mall in your area is missing. Perhaps they need to change the greed driven formula of dollars per square foot into the future of calling in people per square foot, because people per mall is what decides the success of such one place, not the amount of empty walking space (sorry Nordstrom).

What business plan?

The very first thought when I saw a Nordstrom video less than an hour ago. In light of the closure of Nordstrom someone made a 4K walkthrough of the Nordstrom shop in the Eaton Mall in Toronto, which is their flagship. The shop is about 220,000 square foot and the first thought out of my mind was ‘Are you flipping kidding me?’ And I suddenly understood why Nordstrom never made a profit. I cannot understand why the people there did not see this right off the bat. In the first the shop looks pretty amazing, but overly spacious and not in a good way. The shop has about 70,000 square foot of unused space, that is a third and mall space is expensive. So to be wasting space to the likes of 70,000 square foot. I found one source with a price (not verified) of $1,450 per square foot, implying that Nordstrom was wasting $101,500,000 EVERY YEAR on empty space. So what kind of business plan is that? And the video (at https://youtu.be/6IQMgV_7uqE) clearly shows the waste of space. You could setup the entire shop in half the space and when you reduce the cost of one shop by $51,000,000 it amounts to a large sum of money. I do not care what the vision of these people were, when you optionally have 13 stores in the same setup, you are wasting hundreds of millions a year. Now, we know that the others are smaller, but it still implies that the stores were wasting close to half a billion every year. So what gives?

When I wrote ‘The unplanned story’ (at https://lawlordtobe.com/2023/03/21/the-unplanned-story/) on the 21st of March, I did make mention of “there is a weakness in your business model, but I do not think it was enough”, in this malls tend to be the same and I did not give it the consideration I optionally could have. I never expected that Nordstrom wasted space to the degree they did. There is more, it seems to be some elite store and Canadians aren’t too elite based (well over 40% of the male population loves their hockey jersey). A shop like this fits Los Angeles, optionally Rodeo Drive, but even then this flagship there would become a money pit soon thereafter, especially when you waste 70,000 square foot of space.

I keep on coming back to the thought, who were these people wasting money to this degree? You see, covid or not, I expect that covid had a massive impact, but the clear waste of space is boggling my mind. Malls are expensive and that keeps on badgering my mind. It also reminded me of a place called Meddens in Rotterdam. A fashion store with exactly the same setup in a place called ‘Lijnbaan’, there is however a difference. The people behind it were brilliant and they bought the entire block. They became an eccentric and exquisite shop, but as they owned the block, their $100K gamble became a multi million euro win and it funded expansion after expansion and after 180 years (in 2010) the 6 shops stopped. I reckon 180 years is a good run. A shop like Nordstrom that stated to CBC last month “Despite our best efforts, we do not see a realistic path to profitability for the Canadian business.” Well, when you waste that kind of space I am not entirely surprised. And it will not take long for places like Holt Renfrew, Hudson’s Bay, and Simons to gobble up the clients. Personally I hope that the staff members will find space in these places as well. They tend to be victims of a business plan, not the instigators of it. It took the parent company less than 10 years to see wisdom and with an earlier quote (I think it was CBC) that they never had a profitable year I actually wonder why it took this long.

The more I saw of this video the more questions came to me and I have no idea what these board people were thinking (if they were thinking). I might seem happy, but I am not. I do not relish anyone’s downfall (Microsoft being the exception) and this shop was managed floor by floor by people who loved their job and their space. You can see that with EVERY display in that shop and there are many of them and we would want to give them a pass for covid, but the shop was not doing well years before that point and that partially angers me, waste tends to do that. A weird start to Sunday for me, but when I see the evidence I am not really overly surprised on the outcome, merely on some people not seeing this clearly years before me.

The unplanned story

That happens to us all and there are any number of reasons. I thought I was done with the subject for now, that is until CB gave me ‘Nordstrom Canada will launch sales at its closing stores starting Tuesday’ (at https://www.cbc.ca/news/business/nordstrom-canada-liquidating-stores-1.6784540) about 11 hours ago. There was no surprise. I covered this in part in ‘It as one keyword’ (at https://lawlordtobe.com/2023/03/04/it-was-one-keyword/) and that story links to a few others. I casually captured the folly of Nordstrom but I left a few things out. You see, we can all agree if you have been working from a place of loss from day one, there is a weakness in your business model, but I do not think it was enough. Covid was too unexpected and the world reeled on it, but it was already to late as I saw it and even if my IP was accepted by the right people, for Nordstrom it was already too late, it would have merely given them a little more time, time they could not hand them a better result. Their business model and their prediction model was off by too much.

You see, to see this we need to look at a picture. The picture is below.

As you see here, we see a mall and this time around it is not the Toronto Eaton Centre, this is the Hyat Mall in Riyadh and it show the same weakness, which is the problem for malls. Yet as I see it, the problem is a lot bigger for western malls (USA, UK, EU) they have the same touch, the tough of non identity. You can scream the name all you like, but these malls are all the same. Go to a mall anywhere in the US and you could not tell where you were from walking there. It was a formula that malls were based on and between 1990-2015 that made sense, but after Covid the world changed and that is where the problems starts for these malls, all 116,000 of them. Yet there is a solution and both Gucci and Tiffany is already tapping into that, but I reckon they are missing part of it and that is where Google, Samsung and Apple come in. I wonder if these two players figure out what I saw over 6 months ago and it is a juicy one. Optionally Elon Musk could use it to give more needs to his Pi Phone but in itself it is still an android solution. The image is based on identity and interaction. You see, that need is not effort, it is engagement. Market Research (at least a few of them) have seen that engagement is the metric that really matters and Augmented reality is the core of that and that is what is missing in malls. Lets be clear, for Nordstrom it is too late, the question becomes will malls change into retail graveyard places over the next 5-10 years or are they given a new lease on life and that matters. How much real estate is in 116,000 malls? When they die the local places will light up and I personally am a firm believer in ‘Support your local hooker’ which was an expression we used in the 70’s.

So am I right because Gucci and Tiffany are tapping into that idea? No, I believe I am right because the nature of the beast (the consumer) has changed and is still changing. They are catching on that a new prerogative is required and AR gets them there. So when they are done with ageism and other forms of consumer categorisation, they will figure out that their predictive model is wrong on a few levels and that is where we see the larger stage change. I merely wonder if some of them will wake up in time. If not, I watch it all go to hell and when it does I can point to my previous articles and tell them “Told you so” and whatever excuse they have will not hold up, because I wrote it months ago and I wrote it in several stories over a span of about a year (perhaps a little longer). So when they wake up, I wonder if it is to the board directors who are fed up with the colour rd in their books, or the conveyancer trying to measure up the place for new usage. I can’t be to the smell of coffee, because it is too late for that and it will not be to me as Amazon, Apple and Google all decided they never needed me. Fine, whatever.

So when we complete the consideration of “In approving Dacks’ liquidation request, Chief Justice Geoffrey Morawetz agreed, saying Nordstrom is facing a “difficult time, but this process is unfolding in a very co-operative manner.””

At least I kept it out of the hands of Microsoft, not a bad stage to consider. Yet consider two final things. The first is Nordstroms liquidation actual liquidation or euthanasia? The second is, is Nordstrom alone? How many other places are on the brink of really bad times in the next 5 years?

Have a great day.

2 Comments

Filed under Finance, Media, Science

Tagged as Amazon, Apple, AR, Augmented Reality, Canada, CBC, Eaton Centre, Elon Musk, Geoffrey Morawetz, google, Gucci, Hyat Mall, Market research, Nordstrom, Pi Phone, Riyadh, Saudi Arabia, Tiffany, Toronto

March 4, 2023 · 10:23

It was one keyword

Yes, that is at times the short and sweet of anything, but let that not be some alert to the easiness of any endeavour. You see, my opposition to the CBC article (at https://www.cbc.ca/news/business/nordstrom-canada-1.6766073) is not that simple. The headline ‘Nordstrom closing down in Canada, shuttering all 13 stores’ sounds nice and it is a reality, but it is another line, one giving us “It was not Canadian enough”, that is the one that is plain wrong. You see, from all information we could go with the setting that the business mission was wrong all along, especially with any business painting the books in red since 2014 is another matter, one that matters, but the larger stage is not that (for Nordstrom it might be), malls are at present done for in its current setting. You see when Covid hit, it did a lot more. The timeline 2020-2023 changed people. People were forced to sit at home and mull things over. The short gratitude setting of going shopping in the weekend suddenly got hit by the cold light of day and it did not hold up. People started to think over what on earth they were doing and that becomes a whole lot more.

You see, it started before June 6th 2022 when I wrote (at https://lawlordtobe.com/2022/06/06/presentation-and-awareness-creation/) ‘Presentation and Awareness creation’. This is based in simple settings. You see, all the marketeers are in some silly exercise of direct marketing. It is direct, simple and cheap and the ROI of it is seemingly immense. But any intelligent marketing boffin will tell you that the actual gems are found in engagement. Engagement is key to get traction with the people, especially the people who woke up after covid. I saw the setting in the Eaton Centre Mall (Toronto), yet I saw this application in places like Harrods too (Harrods has way to much traction at the moment, as such they need not worry), but there are well over 115,000 malls that need to wake up. They need to create traction and that was where my IP came in. It wasn’t hard, parts already existed, but for some reason Amazon and Google (the most likely winners in that race) decided not to wake up and that is where everyone decided to snooze a little longer. But there was a stage that was fast and vastly evolving and players like Omnichannel were already aware. They knew that the race was around the creation of engagement, they merely did not take it far enough. I did and suddenly had created a stage where bookshops and jewellers were a lot more important than ever before. OK, I am a guy so I created the stage for Victoria Secrets as well, they have well over 1,000 stores in the US alone and that is merely the beginning. There was a stage of intensified engagements from Alberta to Monaco and from Monaco to Zurich. An enlarging stage and the one keyword everyone forgot about was ‘Effort’, it is not part of direct marketing as such a lot of people forgot about it, but it matters and it matters a lot. Nordstrom is merely the beginning. Unless malls do not change their approach too many of them will become ghost buildings. The people are awake and these malls are largely done for. Seek any of my articles from June 6th 2022 involving ‘Eaton Centre Mall’ and you might catch on. It was all out in the open and marketing people forgot about the essential approach involving effort.

What I never figured out is that I am not the super intelligent type, Google and Amazon should have been thee long before I did and they were not, now that they are all about chasing revenue, I wonder who gets there first, that player will have a much larger revenue stream for a long time to come and it is not an adjusted revenue stream, it is a new one with global implications. That is my view on the matter. How the keyword ‘effort’ changes everything.

3 Comments

Filed under Finance, IT, Science

Tagged as Alberta, Amazon, Augmented Reality, Canada, CBC, Covid, Eaton Centre Mall, google, Harrods, Monaco, Nordstrom, Omnichannel, Toronto, UK