The Future Of Resale Is Taking Shape At Nordstrom Now

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"Nordstrom"

The new Nordstrom See You Tomorrow store.

Photo credit Nordstrom

This morning at Nordstrom’s new store in New York, a shop-in-shop is opening that is unlike anything ever in a department store before. Called See You Tomorrow, everything in the new shop has been bought before by consumers who’ve returned or resold the products back. Now, Nordstrom has selected out vintage products that fit its product mix and assembled an entire shop to offer it to consumers. What’s different about this shop from a traditional vintage store is that it presents the same products you’d see in a department store and they’ve all been refurbished. The shop looks spanking new and the products don’t look different from what’s on offer in the rest of the store; they’re high-end, first class products but the prices are much lower. Almost everything looks good as new and the store is fun to shop in. It’s a treasure hunt experience at a major department store level.

The Bigger Picture

What’s happening in the new Nordstrom shop-in-shop is the next step in the evolution of the resale business. The Nordstrom shop does in the physical world what online resellers like The RealReal and ThredUp have done in the virtual world: bring the resale business out of the local, gritty, neighborhood-only market and taken it mainstream.

There Are Still Issues

Even as much as resale needs to go big-time, there are still problems with authentication of what’s coming into the resale channel. The high value of certain products being resold has proven to be an opportunity for fraudsters. There are factories around the world that are built to make fake products that look just like the real thing and are distinguishable only by experts. (Here’s an article about a Christian Dior bag I bought on The RealReal for $3,600 that was fake.) More needs to be done to make sure that consumers aren’t defrauded. Without greater investment in authenticity, the resale market is jeopardizing its own future. As the resale business goes more mainstream, there will be more pressure on authentication and resellers will have to deal with it.

Where This Has To Go Next

At this time, most major brands believe that the resale market is a threat and not an opportunity. They believe that used goods prevent customers from buying their new products. They’re wrong about their reluctance for a few reasons:

  • Especially for very high-priced luxury products, resale presents an opportunity to introduce their brand to consumers who aspire to have it but can’t afford it. Those consumers, once engaged with the brand, can move up to being full-price customers over time. Brands feel now that they don’t want to cheapen their brand by having it be seen on consumers that don’t fit their existing demographic.
  • The prevention of fraudulent products on the market requires brands to participate in the authentication process and lend their expertise. The more fraudulent products on the market, the more consumers who think they’ve bought something real and don’t know they have a fake will think the brand quality is poor when their fake starts to fall apart. That hurts big brands’ value in the long run.
  • This market is happening. Brands can’t afford to be left behind, they have to get in front of it. In the long run, avoiding this market is avoiding where the consumer is going. You can never win with that strategy.

What Comes Next

The new Nordstrom shop is the next iteration in resale and whether it needs to be tweaked or not will be determined. But once this works, it will be copied and go into more stores. More department stores will adopt this as part of their strategy and more brands will come on board. When they do, their businesses will grow and they will be more relevant to what consumers want now. The resale business has some issues but it is where consumers want to go and brands can’t avoid it.

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This morning at Nordstrom’s new store in New York, a shop-in-shop is opening that is unlike anything ever in a department store before. Called See You Tomorrow, everything in the new shop has been bought before by consumers who’ve returned or resold the products back. Now, Nordstrom has selected out vintage products that fit its product mix and assembled an entire shop to offer it to consumers. What’s different about this shop from a traditional vintage store is that it presents the same products you’d see in a department store and they’ve all been refurbished. The shop looks spanking new and the products don’t look different from what’s on offer in the rest of the store; they’re high-end, first class products but the prices are much lower. Almost everything looks good as new and the store is fun to shop in. It’s a treasure hunt experience at a major department store level.

The Bigger Picture

What’s happening in the new Nordstrom shop-in-shop is the next step in the evolution of the resale business. The Nordstrom shop does in the physical world what online resellers like The RealReal and ThredUp have done in the virtual world: bring the resale business out of the local, gritty, neighborhood-only market and taken it mainstream.

There Are Still Issues

Even as much as resale needs to go big-time, there are still problems with authentication of what’s coming into the resale channel. The high value of certain products being resold has proven to be an opportunity for fraudsters. There are factories around the world that are built to make fake products that look just like the real thing and are distinguishable only by experts. (Here’s an article about a Christian Dior bag I bought on The RealReal for $3,600 that was fake.) More needs to be done to make sure that consumers aren’t defrauded. Without greater investment in authenticity, the resale market is jeopardizing its own future. As the resale business goes more mainstream, there will be more pressure on authentication and resellers will have to deal with it.

Where This Has To Go Next

At this time, most major brands believe that the resale market is a threat and not an opportunity. They believe that used goods prevent customers from buying their new products. They’re wrong about their reluctance for a few reasons:

  • Especially for very high-priced luxury products, resale presents an opportunity to introduce their brand to consumers who aspire to have it but can’t afford it. Those consumers, once engaged with the brand, can move up to being full-price customers over time. Brands feel now that they don’t want to cheapen their brand by having it be seen on consumers that don’t fit their existing demographic.
  • The prevention of fraudulent products on the market requires brands to participate in the authentication process and lend their expertise. The more fraudulent products on the market, the more consumers who think they’ve bought something real and don’t know they have a fake will think the brand quality is poor when their fake starts to fall apart. That hurts big brands’ value in the long run.
  • This market is happening. Brands can’t afford to be left behind, they have to get in front of it. In the long run, avoiding this market is avoiding where the consumer is going. You can never win with that strategy.

What Comes Next

The new Nordstrom shop is the next iteration in resale and whether it needs to be tweaked or not will be determined. But once this works, it will be copied and go into more stores. More department stores will adopt this as part of their strategy and more brands will come on board. When they do, their businesses will grow and they will be more relevant to what consumers want now. The resale business has some issues but it is where consumers want to go and brands can’t avoid it.