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MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year

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Nordstrom, BaubleBar partnership targets younger shoppers

By
Caroline Fairchild
Caroline Fairchild
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By
Caroline Fairchild
Caroline Fairchild
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March 31, 2014, 1:00 PM ET
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FORTUNE — Nordstrom is bringing low-price fashion jewelry into its luxury department store chain with the hope that younger shoppers will follow suit.

On Monday, the company will begin selling jewelry from BaubleBar, a popular online retailer. BaubleBar launched its website three years ago with the hopes of making fashion jewelry more accessible to the average shopper. With online traffic now at more than 1 million visitors per month, the founders have decided to expand the company’s presence into traditional retail spaces too.

“Nordstrom has been on the forefront of the shopping move to online,” says Amy Noblin, a consumer equity researcher at William Blair. “The partnership isn’t so much a play to the core Nordstrom customer as it is to appeal to the younger shopper.”

While Nordstrom (JWN) carries jewelry with prices approaching as high as $2,000, BaubleBar’s line will feature pieces tagged as low as $24. Customers can buy a gold-plated necklace made with coral-colored stones for $48 in lieu of, say, a similar gold-plated design by Kate Spade for $128. The line will first be available in 35 stores across the country as well as on Nordstrom’s website.

MORE: Nordstrom’s service with a style

The partnership is part of a series of recent Nordstrom initiatives to expand its customer base outside of the traditional luxury shopper. In 2011, Nordstrom struck a deal with the Internet fashion brand Bonobos to sell the company’s $88 men’s pants in nearly 70 stores. The following year, Nordstrom announced that it would begin selling clothes from popular teen British fashion brand Topshop in brick-and-mortar stores and online.

Suffering from disappointing same-store sales, Nordstrom is bringing in more cost-conscious items into its stores to get Americans shopping again, Deutsche Bank vice president Paul Trussell says. While same-store sales increased 6.1% this time last year, the company reported in February that sales at its full-line stores rose only 2.2% in the fourth quarter. The company views its strategic partnership with Bonobos, Topshop, and others as integral to the moderate growth it expects to see in its full-line stores in the near future.

Nordstrom is looking to attract younger shoppers outside of its luxury chain as well. In 2011, the department store chain acquired Hautelook, a flash-sale online retailer offering discounts on high-end brands for a limited time. In the last three years, HauteLook’s membership has tripled to 15 million customers. The retailer is also expanding its off-price outlet, Nordstrom Rack, by opening nearly 100 more stores during the next two years. In total, the department store chain will invest $3.9 billion over the next five years largely to appeal to a more digitally dependent and price-savvy customer.

MORE: The tech that keeps fashion week ticking

The Nordstrom deal is also a potential boon for BaubleBar. The average customer spends about three times more on BaubleBar products in stores as opposed to online, co-founder Amy Jain says. Though the company saw an online presence as the fastest way to get product to customers in the beginning, Jain says there is a certain “touch and feel” aspect of jewelry buying that can only happen in stores.

The e-retailer flirted with the idea of opening its open brick-and-mortar stores last year by opening up stores for a limited time in New York City. The company also has a partnership with fashion retailer Anthropologie to design jewelry specifically for the company’s apparel lines. Offline sales contributed to about 10% of total sales last year, and that number has now doubled, Jain says.

“We needed an offline component to our business, and we needed to do it fast,” she says. “We are trying to help women shop for jewelry better, and with Nordstrom we can service our customers across the country.”

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