What Lord & Taylor Must Do to Stay Relevant
It's difficult to stay on the cutting edge when you've spent 184 years as a retailer. So what's the management of Lord & Taylor to do to regain market position and lure a new set of customers? The department store chain is looking at expansion in key markets. But it's going to take a much more comprehensive strategy to stay in the game with the likes of Nordstrom (JWN) pulling ahead of the pack.
Lord & Taylor is scoping a location in New York's Westchester county, home of its number two performer. On the surface, this is a good move. Residents of the New York City suburbs are well-heeled and don't mind paying premium prices for the luxury of not having to schlep down to the chain's flagship on Fifth Avenue. Likewise, brand recognition is high here, as the Scarsdale branch has been catering to the doyennes of the outer 'burbs for half a century.
Farther afield, the Lord & Taylor cachet has failed to capture the imagination (and the credit cards) of shoppers. Its last foray back in 2000 pitted L&T against local luxury darling Neiman Marcus on the competitor's home turf of Dallas. L&T shuttered that outlet two years later. Currently the NRDC Private Equity-owned chain operates 45 smallish (think 150,000 square feet) stores mostly in the northeast and prides itself on personal shopping and haute customer service.
To really expand its reach and establish some name recognition, Lord & Taylor needs to embrace the potential for e-commerce. Right now, L&T's Web site is a static affair that looks more suited to a discount chain than a quality department store. Sure there's an L&T Twitter stream, a Facebook fan page, and a dedicated satellite site, "In the Know," that cops all the "editorial" trends that have made other retailers a go-to for fashionistas. But among the devotees, there's a contingent of, ahem, older ladies who are dedicated to classic style and don't know the first thing about mobile apps and RSS feeds.
Nordstrom, on the other hand, has always cultivated a more youthful, fashion forward consumer alongside its more mature, service-conscious clientele. And for the past two years, the Seattle-based retailer has been consistently delivering to both markets by serving up stylish apparel at reasonable prices while developing an innovative e-tail strategy. By merging the inventory in its stores with stock from its Web warehouse, and adding location-based functionality to its shopping site, Nordstrom's pulled in handsome sales gains while its competitors struggle.
Lord & Taylor would do well to explore a similar inventory integration strategy as it attempts to re-position itself as a relevant retailer. Saying it plans to target professional women between 35 and 55 years old (a group that's converting to social media in droves) is not enough. It has to prove it can be a contender amid a retail landscape that's filled to bursting with outlets peddling affordable chic -- especially if it chooses to stay the course on the classic cuts and timeless styles that appeal to its core consumer.
For every sensible pump and sheath dress on Lord & Taylor's racks (real or virtual) you can bet there's a similar option at Nordstrom's or Bloomingdales (M). And let's not forget that there's likely a revamped Talbot's (TLB) in the neighborhood, just waiting to lure women through the (formerly red) doors, too.
Image via Lord & Taylor
Related: