University at Buffalo School of Management

14 Buffalo Business Spring 2018 In Los Angeles, the company recently opened a test concept called Nordstrom Local. With a smaller footprint than a Nordstrom store, Nordstrom Local offers customers a convenient, central location to ac- cess Nordstrom's services such as personal stylists, alterations, tailoring, and the option to buy online and pick up in-store. Turner Gutmann, MBA '12, is program manag- er in marketing analytics at Nordstrom. He says the company sees their online presence as an extension of the physical stores — and so do their customers. "Customer service and experience are corner- stones of the Nordstrom brand and at the center of everything we do," says Gutmann. "You can see evi- dence of this in every customer-facing physical and digital space we offer. Nordstrom pays very close at- tention to both and they really work together, reflect- ing the way customers want to shop. "While brick-and-mortar stores provide cus- tomers the opportunity to touch and feel fashion and experience personalized services, the digital experi- ence offers customers more selection and flexibility to browse on their own time. We find customers real- ly want and use both." On the other side, online retail companies like Amazon and Warby Parker are recognizing the benefits of brick-and-mortar locations. Amazon has opened pop-up shops on the East Coast and has a gro- cery store in Seattle. Warby Parker is taking its in- expensive eyeglasses offline and into more than 50 retail shops. "Do you have my shopping mall?" retail legend Mickey Drexler, BS '66, asks his assistant. She hands Drexler his iPhone. "This is the shopping mall today — you carry it around and can check any price in the world on any product you want." During his 40-year retail career, Drexler has turned around three major fashion brands and helped launch several others, including Old Navy, GapKids and Madewell. After revitalizing Ann Taylor in the 1980s, Drexler was named CEO of the Gap and, over the next 18 years, transformed the business — and the way Amer- icans dress. He slashed its product lines down to a single Gap brand, redesigned stores, focused on quality and chic styles, and took the company from $480 million in annual revenue to nearly $14 billion. In 2003, Drexler joined J. Crew as CEO and grew the company into a global brand famously worn by First Lady Michelle Obama and other trendsetters. Drexler stepped down as CEO last year, but remains chairman with 10 percent company ownership. He also serves as chairman of activewear brand Outdoor Voices and invests in companies he loves through his firm, Drexler Ventures. All of his experiences were fair game last fall during a wide-ranging conversation with Drexler and members of the School of Management Dean's Advisory Council. Retail today: "The apparel industry — and the world of retail — is on its side right now. The business will never be the same again. And it's not just Amazon — it's the whole environment. Discounting is rampant, online shopping has created enormous diffi- culty in the industry, and I don't think people care as much about clothes anymore — they care about value." The future of retail: "I don't think it's going in a good direction. There are so many signals that tell you that — empty stores in every city in America. The commodity business is going to be a delivered-to-your-doorstep business. Someone said recently in a meeting, 'In five years, they say the online business will be 30 percent [of retail sales]; right now, it's 15 percent.' To me, it's going to be 50 percent. Whether it's two years or five years, I don't think any of us know, but the fact of the matter is, it's going that way." How brands can stay relevant: "Creativity is not just knowing how to design a garment. It's being creative in finance and technology. In any business, it's about being innovative and creative, following the consumer where he or she is going, figuring out where the puck is going and seeing around corners. That's critical." For more from our conversation with Drexler — including his thoughts on hiring, emotional intelligence and managing his team — visit mgt.buffalo.edu/drexler. x — Matthew Biddle The Merchant Prince Drexler with Paul Tesluk, dean of the School of Management. Photo: Matthew Biddle Photo: Joel Ramirez a conversation with J. crew chairman Mickey drexler

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