Department stores may not be as important as they once were, but they still reliably take center stage at one point in the year: The Christmas shopping season.
They conjure memories of visits to Santa, ornate window displays and Mariah Carey melodically describing all she wants for Christmas. Steep discounts also mark the season for deal-seeking shoppers.
This year has been particularly challenging for the retail industry, with tariffs and inflation hitting consumer confidence. Promoting the holiday spirit, and prompting more sales during a make-or-break period for retailers, has become even more crucial for leaders of department stores looking to end a tough year on a high.
“Nobody has to spend money, right?” said André Maeder, the chief executive of Selfridges, the London-based department store group. “You only spend the money when the sentiment and the atmosphere is ripe to it.”
On the other side of the Atlantic, Pete Nordstrom, who runs the eponymous retail chain as co-chief executive with his brother Erik, also emphasizes getting the right “energy” in stores.
Mr. Nordstrom, 63, is the great-grandson of the founder of the company, which opened its first store in 1901 in Seattle. Mr. Maeder, 66, led various retailers in Europe before joining Selfridges, whose flagship London store opened in 1909.
The industry veterans represent their countries on a council of department store chiefs and regularly trade notes and study one another’s strategies, customizing them for their target shoppers, who have a wide array of choices beyond the traditional department store.
This joint interview, conducted virtually with Mr. Nordstrom in Seattle and Mr. Maeder in London, has been edited and condensed.
The holiday shopping season is often associated with department stores. How is what you are doing in your stores right now connected to the state of the economy?
Nordstrom: Everything is tied to customer sentiment, which is largely informed by the economy. If you’re buying for seven, eight, nine people, you’ve got to figure out how to do that.
That creates a lot of stress for customers. We’re trying to take that stress out, make it fun for people. You could come to Nordstrom for something that feels charming and interesting and that’s not just phoning it in. But it doesn’t have to be expensive.
Maeder: I just want to mention Jellycat. It’s one of hottest gifts in the world. And everything in Jellycat is under 100 pounds or dollars.
Nordstrom: We get asked all the time about the differences of what sells regionally. Jellycat is a hot item for us, too. Whether you’re in the U.K. or the U.S., the best items are really the best items.
Maeder: I was in the store an hour ago, where a few people were waiting in the queue for Jellycats for 45 minutes.
Let’s talk more about the state of the consumer. What are you seeing?
Maeder: We are living in a very turbulent time. I’m sure everything that’s happening in the world is impacting the consumer’s spend. It’s impacting their sentiment.
I also believe we’ve seen a slight light in the tunnel in the last few months. It was quite difficult in the middle of the year. With the start of the autumn trade, we’ve seen slightly different behavior.
However, consumers are spending less by average ticket.
What are shoppers pulling back on?
Maeder: The category still struggling the most is luxury accessories. But glasses and sunglasses are doing extremely well. I believe this is a substitute category for buying a luxury brand. You still have something from Chanel or Dior or another important brand, rather than a very expensive purchase.
Pete, what are you seeing?
Nordstrom: It has been healthy all year for us.
Sometimes that flies in the face of what you might think is happening because, to André’s point, it’s a turbulent economy. The macro factors that we don’t have control over are not always great.
How are tariffs affecting your companies?
Nordstrom: It puts a lot of pressure on everyone because those costs are real and they get passed along. This idea that someone just absorbs those costs and they don’t become a thing and prices don’t go up, it’s just not true. Not in our industry, the margins are too thin.
Maeder: Same for us.
Nordstrom: I applaud our vendor partners. They’ve been thoughtful about it. But at the end of the day, those costs get passed along and that has an impact on demand. No doubt about it.
So how did you approach pricing this year? Are you nervous that people will balk at higher prices?
Nordstrom: Yes, of course. Price is a key factor in any purchasing decision.
We are not agile enough to change everything in a week or two or a month’s notice around pricing. If we’re sourcing things from a certain country and then all of a sudden that tariff goes up, we can’t just respond in two weeks and buy it from somewhere else. Our suppliers can’t move that fast.
Maeder: This is the business of our merchant teams to make sure we have a curated situation, not only in color and style and fashion, but also in price.
Tourists can be big business for high-end department stores. What are you seeing there? Are you getting fewer tourists from, say, China?
Maeder: It started quite tough with international sales. It was much better the last three months.
By far our number-one increase is from the United States. We are around a 20 percent increase in that customer.
China is still tough. We see a little bit of recovery over the last eight weeks, but it’s not the figures we had before the pandemic. Very similar for the Middle East.
How do you explain the increase of American shoppers at Selfridges?
Maeder: It’s a mix. I think Europe is sexy, London is sexy.
I’m not sure everybody’s doing as well with Americans as Selfridges. I believe it’s the attraction of our store.
So, Pete, is he stealing your customers?
Nordstrom: Particularly in places like New York, customers have a ton of choices. They’re sophisticated, they travel, they can buy things online.
But the large majority of the business is with people that live near the stores.
You both clearly love retail. What were your first jobs in the industry?
Nordstrom: I started in the stock room because I wasn’t old enough to sell. Then, when I was old enough sell, I sold women’s shoes.
Maeder: I was 16 years old and started my retail career in an apprenticeship in Bern, the capital of Switzerland. Since then — I’m 66 now — I have spend 50 years in retail, and most of the time on the shop floor.
What did your time in the shoe department teach you, Pete?
Nordstrom: It was a lesson in humility because it’s a hard job.
I’ve never worn these shoes. I am not a woman. I had to have some level of authority and knowledge at a time in your life when you don’t have a lot of confidence and authority. You learn a lot of lessons that you carry with you forever.
Maeder: Everybody who is in top management of a retail or department store should have been at least in some function on the shop floor, otherwise you never understand retail.
In Nordstrom’s New York store, you just remodeled “The Corner” pop-up section for gifting. Was that inspired by Selfridges’ “Corner Shop” concept?
Nordstrom: Yes. Not just them, but yes.
Maeder: Great. Brilliant.
Nordstrom: Right before we opened in New York, one of the things that my brothers and I did is we spent a lot of time looking for the best stores in the world, and Selfridges is the very top of that list.
Maeder: We would be out of business if we didn’t learn every day. Nordstrom is number-one in services. You do a lot of things very well, but you are world famous for how you treat customers. That’s one thing everybody can learn from Nordstrom.
It’s time for the lightning round. What is your favorite stocking stuffer?
Maeder: This one. [Holds up the Selfridges-branded Jellycat]
Nordstrom: I have two women in my house, and so oftentimes it comes from the beauty department. Something small that is new and interesting.
If you’re dressing up for a holiday party, what’s your favorite article of clothing or accessory?
Maeder: I’m famous for two things: a colored handkerchief and colored socks. They don’t have to match, but they need to be in color.
Nordstrom: A jacket or a coat or something like that is probably the thing I put the most thought into.
Would your stores ever accept cryptocurrencies?
Maeder: We don’t do it today, but you never know what’s coming in the future, right?
Nordstrom: We’ve got to meet customers where they are. If that’s how they want to pay, and it’s a legitimate form of payment, we’re going figure out how to take it. We’re not there right now, but I would never say never on that, either.
When you walk into one of your stores, what’s the first thing you notice?
Maeder: For me, it’s atmosphere. It’s a smile from the staff. The smell in the air. I feel in a second if the store is successful or not.
Nordstrom: Because we’ve got this heritage in shoes, you can really tell by how a shoe department is going. If that’s working well, it’s such a barometer of service.
Jordyn Holman is a Times business reporter covering management and writing the Corner Office column.
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