Nordstrom is the latest retail tenant to fall out with its landlords. According to reports, the upscale department store chain has informed the owners of its off-price Rack and namesake stores that it will only pay half of its remaining 2020 rent costs. On Friday, President of Stores Jamie Nordstrom wrote to landlords stating that comps would be used to determine whether the company will make its rent payments. According to the report, Nordstrom would make a full reconciliation if 2020 sales exceed 90 percent in this location in 2019.
Total Retail’s View: Nordstrom has taken the latest steps to reduce costs and maintain cash flow. The department store announced last month a significant reduction in its workforce (The Seattle Times reported 6,000 job cuts) and plans to close 16 full-line stores. However, it is unlikely that the landlords will agree to a lower rent payment without much effort. Brookfield Property Partners and Simon Property Group, the largest mall owner in the US, have filed suit against Gap Inc. for late rent payments. This precedent shows that mall landlords will not renegotiate terms. Nordstrom will likely face similar problems with its payment plan, according to my expectations.
What’s next: Post-COVID Strategy For Retailers
Retailers are being faced with many challenges as more states and cities move towards a post-COVID future. There was so much that changed during quarantine. It is most likely that how people shop has been at the top. Online and brick-and mortar retailers need to redesign their customer experience to ensure that customers feel connected to their brand.
One of the biggest changes that we all witnessed was the need to shop online. This was a new experience for some, while others simply noticed a shift in the products they could purchase online. It’s quick, simple, and people can avoid crowds and sickness. The fact that shoppers have changed their shopping habits is something retailers can’t ignore.
Similar story: Will we witness a shift in consumer shopping behavior post-COVID-19
Accept the fact that things have changed
What are the biggest changes retailers will need to make after COVID? Many people prefer shopping online. This is directly related to the shift in work from home requirements. Many companies now realize the advantages of allowing employees stay at home. This will likely be the norm for many positions. This will allow for continued online shopping. Online retailers might want to think about how to digitize their stores in order to take advantage of the online shopping boom.
- Magento Pos
- Shopify Pos
- Bigcommerce Pos
- Woocommerce Pos
- Netsuite pos
- Bigcommerce automation
- Shopify automation
Take into account consumer behavior
People who have been in strict quarantine for several days should not be underestimated when it comes to shopping. A article by Deloitte states that people are less likely than ever to browse, and they are more likely to get out, interact with others, or touch unnecessary products. Retailers should be careful about product placement and simplify the shopping experience. If the layout is complicated or everyday items are farther back, people are more likely not to shop in that store.
We’ve never been this far as a society. Retailers must be open to change and adapt their market strategies. Consumers will feel confident knowing that the latest product information is available to them in real-time. This will allow consumers to regain trust when shopping with your brand.
Technology is a critical factor
Some stores might be able survive, but it is essential to develop a digital strategy. According to Supermarket news, retailers need to listen to customers. While restrictions have eased, many are still reluctant to shop in-store and some simply don’t like it. Retailers need to think about their long-term digital strategy and how they will attract and keep online shoppers to survive the post COVID era. It might take some time for people to shop the way they used to. It may not be a good idea to keep what you have, but to move on and change.
Read more :
Although some retailers might be anxious about the transition to the new “normal”, the main focus should be on consumers. Think about their changing mindset, how they shop, and what is most important to them right now.
While we don’t know what COVID will do to consumer preferences in the long-term, we do know that online shopping is preferred by many. If retailers want their websites and doors to continue functioning, they must be aware of this.