Jessica Johnson is the former editor-in-chief of The Walrus and the former copy director of Hudson’s Bay.
In retail news, Nordstrom’s announcement this past week that it would “wind down” Canadian operations came across like a goodbye from a guest you’d already forgotten was at the party.
When the company opened its first Canadian location, in Calgary in 2014, it was among the first of a new series of upmarket retailers to invest in Canada. Other stores soon followed in Ottawa, Vancouver and Toronto. At the time I was working at Hudson’s Bay and, like some of my colleagues, interpreted the store’s emphasis on contemporary designers and cocktail receptions as confirmation of a new kind of middle-class Canadian consumer – unselfconsciously aspirational. The kind of person who bought $200 sunglasses. Nordstrom wasn’t the only retailer banking on a new kind of shopper in cities such as Toronto. Saks Fifth Avenue opened its first store in 2016.
Now, it’s hard not to look at the dramatic highs and lows of the last decade in retail and ask: What was it all for? After the high-profile failure of Target in 2015, a number of U.S. chains set up shop and since retracted or left (Brooks Brothers, Bed Bath & Beyond). In the meantime, Canadian companies have made room for new arrivals – in at least one case, literally, when the Bay’s most successful location, Queen Street, was subdivided to accommodate Saks. We were told that these were all good trends, changes that would enhance growth. But the promised revolution never arrived. It’s as if everyone – Canadian- and American-owned businesses and shoppers themselves – is left with less.
From Kmart to Nordstrom: A list of U.S. retailers that have closed down in Canada
The challenge issued by Nordstrom and Saks was a clear call to Canadian retailers: Up your game. No more outdated décor and indifferent customer service. The new Nordstrom locations featured boutique-hotel lighting and associates who were attentive but not chummy, like better-connected friends. Its loyalty program, Nordy Club, offered easy redemptions and a persistence despised by some members; I’ve never found a way to unsubscribe from Nordy Club, but its e-mails undeniably kept the brand front and centre.
But the era of the new high-end retailer was never really matched by big sales. In Nordstrom’s March 2 earnings report, CEO Erik Nordstrom emphasized that the company saw no “path to profitability” in Canada. (The Washington Post reported that court filings reveal the company had never made money in Canada.)
It’s true that big department store chains have been in retraction for years. We can blame the pandemic for much of that lately. The departure of Nordstrom’s, though, and so many others, belies the myth that U.S. companies know better about operating in Canada, or that there is something magical about American retail.
I don’t know exactly why U.S. retailers come to Canada to die, but I suspect it’s because the U.S. market and the Canadian market are different – different enough, at least, that the same strategies in different markets can subtly backfire. As I learned when I worked in marketing at HBC, which then owned Lord & Taylor and Saks, U.S. shoppers are more accustomed to shopping on sale. “If a Canadian sees that something is launching on sale,” a more experienced colleague once told me, “they think there’s probably something wrong with it.” Americans were faster to adopt and more prolific with online shopping. (I suspect this is because our geography and mail system make it more cumbersome to process returns).
And the Canadian market is so much smaller. Retail is a notoriously tight industry to make money in. It’s easier to take risks and add up minor successes when you have a population 10 times the size. If you want to grow here, change must be incremental and proportionate – and respectful of what the customer wants.
My own problem with Nordstrom wasn’t its presence in Canada or Toronto’s Eaton Centre, where it took up the flagship position long held by Eaton’s, the historic Canadian department store that was replaced when it died by U.S.-owned Sears (also gone).
There was nothing to buy there. Before an event, I did a trawl through the major Toronto department stores, including The Bay and Holt Renfrew, looking for a dress. Nordstrom’s surprisingly limited offering was a rack of mass-market designers in what is kindly referred to in retail as a “classic” style. I did find a timeless, Breakfast at Tiffany’s-style gown for a rainy day – Sung is a fine Canadian designer, if heavily licensed now. But the style is so run-of-the-mill there has been no reason to bring it out either. A few years later, it’s still hanging in my closet with the $167.98 tag attached, down from $280, unworn.