Saturday, August 27, 2011
Sunday, August 21, 2011
Yesterday, Nordstrom, the highly respected specialty department store entered into the New York marketplace with the opening of a new "concept" store known as "Treasure&Bond", located in Soho, the neighborhood in which I live and work. It is part "product testing", part "focus group" and a marketing investment to shake hands with New York shoppers, announcing their arrival. One of their major messages is that 100% of the "profits" will be donated to several well deserved charities, a direct tie-in to social giving. It is a bold promise, and one which should be clarified. What exactly does the word "profit" mean today. One is lead to believe that the word profit is the "net profit" after the store pays its rent, salaries, marketing and operating expenses. Does that mean that if the revenues of the store are below what it takes to cover its expenses, then no profit will be generated meaning no funds will be donated? The shopper who makes a purchase is likely to assume with certainty that Nordstrom knows how to make a profit. However, this concept store is an experiment, and a risky one. I think Nordstrom means well, but this exciting "promise" illustrates how important it is for brands to think through the consequence of their marketing strategies, before making promises to its shoppers. We are living in a demanding age where transparency and clarity is most valued by the consumer. Better to donate 10% of sales than 100% of profits. As a shopper, I would then know that definitively a portion of the sale is going to the social beneficiaries. No audits of the P&L are necessary. What do you think?