Nordstrom's New Flagship And The American Dream Mall: The End Of Something Old Or The Start Of Something New?

When it comes to the obvious, you really can't get any better than this: This week, two long-planned legacy retailing entities open, practically within sight of each other. What they say about the state of the American retailing industry is subject to both debate and speculation.

This week sees the grand opening of the long-awaited New York City outpost of Nordstrom, the upscale department store that has had a limited presence in the city for years with its Rack off-price division and more recently with a men's store and two outposts of its Local non-store store. This giant new department store-over 300,000 square feet spread out over seven floors-will focus on women's fashion and accessories, as well as beauty and an assortment of restaurants and service areas.

Barely nine miles away-albeit across a river, state lines and perhaps a retailing time warp-the even-longer-awaited American Dream shopping and entertainment complex will also open its doors. While the facility will have a mix of shopping and non-shopping tenants, we will have to wait to see what the stores look like as only part of the entertainment component will be up and running this week.

Both Nordstrom and American Dream are a long time coming and were essentially initiated a decade or more ago before the dynamics of the retailing business were forever changed by Amazon and the explosion of e-commerce, not to mention the generational change that has seen today's shoppers with very different priorities than those that came before.

The Nordstrom family has talked about having a New York City presence for more than ten years and announced initial plans for the store in 2012. Rather than go into the Hudson Yards complex, as fellow premium retailer Neiman Marcus chose, or into a more established retail neighborhood like Herald Square or Soho, it selected West 57th Street at the base of a mega-residential complex just off Columbus Circle.

American Dream has had an even longer gestation period, having been through numerous changes in ownership, name, architectural style and format. With more than 3 million square feet of space in the New Jersey Meadowlands, adjacent to the sports stadium that is home to the New York Giants and Jets, it is now configured to have a majority of non-store space, emphasizing amusements, entertainment, restaurants and family attractions.

But let's not confuse the issue here-these are both businesses that will live and die on whether enough people visit and spend money. And even if the restaurants, ski slopes and rides are big parts of the picture, they are each about retailing. And ultimately, they will succeed or fail based on their ability to get shoppers to buy stuff.

So it is a fair question to ask: Do Nordstrom NYC and American Dream represent the future of the retailing business or are they the last outposts of a dying business model? Will the focus on entertainment and dining be enough to compensate for the declining in-store purchasing share of market? Dinosaurs or new DNA hybrids?

The answer, obviously, is not something we're going to find out immediately. Nordstrom will be as much about taking market share away from Bloomingdales, Macy's and Saks as it will be about growing the upscale retail business in Manhattan. As such it could take years to truly understand whether it is a success or not. American Dream's stores and many of its entertainment pieces won't even open until sometime next year and there's no way to know at this time whether they ever will have the critical mass they have talked about so far only in the abstract.

Nobody - at least nobody who really understands retail - is saying the in-store shopping piece of the business is going to disappear. It won't. But these two bold projects could represent a high water mark for the way things have been rather than the start of a new curve on the retail chart for the way things will be.

Frankly, students of retailing couldn't have asked for a better scenario from which to see the future of the business.