opinionNordstrom’s sorry exit from Canada raises the query: What was all of it for?Jessica JohnsonMarch 3, 2023
Jessica Johnson is the previous editor-in-chief of The Walrus and the previous copy director of Hudson’s Bay.
In retail information, Nordstrom’s announcement this previous week that it could “wind down” Canadian operations got here throughout like a goodbye from a visitor you’d already forgotten was on the get together.
When the corporate opened its first Canadian location, in Calgary in 2014, it was among the many first of a brand new sequence of upmarket retailers to put money into Canada. Different shops quickly adopted in Ottawa, Vancouver and Toronto. On the time I used to be working at Hudson’s Bay and, like a few of my colleagues, interpreted the shop’s emphasis on up to date designers and cocktail receptions as affirmation of a brand new sort of middle-class Canadian client – unselfconsciously aspirational. The sort of one who purchased $200 sun shades. Nordstrom wasn’t the one retailer banking on a brand new sort of shopper in cities reminiscent of Toronto. Saks Fifth Avenue opened its first retailer in 2016.
Now, it’s laborious not to have a look at the dramatic highs and lows of the final decade in retail and ask: What was all of it for? After the high-profile failure of Goal in 2015, quite a few U.S. chains arrange store and since retracted or left (Brooks Brothers, Mattress Bathtub & Past). Within the meantime, Canadian corporations have made room for brand new arrivals – in no less than one case, actually, when the Bay’s most profitable location, Queen Road, was subdivided to accommodate Saks. We had been informed that these had been all good tendencies, adjustments that might improve progress. However the promised revolution by no means arrived. It’s as if everybody – Canadian- and American-owned companies and buyers themselves – is left with much less.
From Kmart to Nordstrom: A listing of U.S. retailers which have closed down in Canada
The problem issued by Nordstrom and Saks was a transparent name to Canadian retailers: Up your sport. No extra outdated décor and detached customer support. The brand new Nordstrom areas featured boutique-hotel lighting and associates who had been attentive however not chummy, like better-connected pals. Its loyalty program, Nordy Membership, supplied straightforward redemptions and a persistence despised by some members; I’ve by no means discovered a approach to unsubscribe from Nordy Membership, however its e-mails undeniably saved the model entrance and centre.
However the period of the brand new high-end retailer was by no means actually matched by massive gross sales. In Nordstrom’s March 2 earnings report, CEO Erik Nordstrom emphasised that the corporate noticed no “path to profitability” in Canada. (The Washington Submit reported that courtroom filings reveal the corporate had by no means made cash in Canada.)
It’s true that massive division retailer chains have been in retraction for years. We are able to blame the pandemic for a lot of that recently. The departure of Nordstrom’s, although, and so many others, belies the parable that U.S. corporations know higher about working in Canada, or that there’s something magical about American retail.
I don’t know precisely why U.S. retailers come to Canada to die, however I believe it’s as a result of the U.S. market and the Canadian market are completely different – completely different sufficient, no less than, that the identical methods in numerous markets can subtly backfire. As I realized after I labored in advertising and marketing at HBC, which then owned Lord & Taylor and Saks, U.S. buyers are extra accustomed to buying on sale. “If a Canadian sees that one thing is launching on sale,” a extra skilled colleague as soon as informed me, “they suppose there’s most likely one thing unsuitable with it.” Individuals had been quicker to undertake and extra prolific with on-line buying. (I believe it is because our geography and mail system make it extra cumbersome to course of returns).
And the Canadian market is a lot smaller. Retail is a notoriously tight business to earn a living in. It’s simpler to take dangers and add up minor successes when you’ve gotten a inhabitants 10 occasions the dimensions. If you wish to develop right here, change should be incremental and proportionate – and respectful of what the client needs.
My very own downside with Nordstrom wasn’t its presence in Canada or Toronto’s Eaton Centre, the place it took up the flagship place lengthy held by Eaton’s, the historic Canadian division retailer that was changed when it died by U.S.-owned Sears (additionally gone).
There was nothing to purchase there. Earlier than an occasion, I did a trawl via the key Toronto shops, together with The Bay and Holt Renfrew, in search of a costume. Nordstrom’s surprisingly restricted providing was a rack of mass-market designers in what’s kindly referred to in retail as a “traditional” model. I did discover a timeless, Breakfast at Tiffany’s-model robe for a wet day – Sung is a nice Canadian designer, if closely licensed now. However the model is so run-of-the-mill there was no purpose to carry it out both. A number of years later, it’s nonetheless hanging in my closet with the $167.98 tag connected, down from $280, unworn.