BUSINESS
21BWTalks ErikNordstrom
Afterdecadesofplanning,NordstromInc.
openeda 320,000-square-footstore—set
tobeitshighest-grossing—inManhattan
onOct.24.It’sbettinga focusoncustomer
experiencewillhelpit standoutin New
York’scrowdedmarket.—CarolMassar○Fourth-generationmemberofretailingfamilythatstartedSeattle-based
Nordstromasa singleshoestorein 1901 ○Likehisbrothers,beganworking
atthecompanyasa shoeclerk○HelpedexpandNordstrom’se-commerce
businessbeforebecomingco-president(withbrotherPete)in 2015○ Interviewsareeditedforclarityandlength.ListentoBloombergBusinessweekWith
CarolMassarandJasonKelly, weekdaysfrom2 p.m.to5 p.m.ETonBloombergRadio.It’sa toughretailenvironment.Lord&
TaylorcloseditsNewYorkflagship,
HenriBendelshutdown,andBarneysis
in bankruptcy.Howdoyouavoidsome
oftheproblemstheyhaven’t?I grewupsellingshoes.
Youareliterallyonyour
handsandkneesin front
ofthecustomertryingto
takecareofthem.That’s
a goodmetaphorforhow
wetrytocontinuetorun
thebusiness:Wefocuson
thecustomer,andcertainly
today’scustomerwants
thingsdonedifferently.Justhowdifferently?Customersaremore
empoweredthanever,less
willingtocompromiseany
oftheirexperiences,and
shoppingis includedin that.Howdoyouaddressthat?Buildinga newphysical
storegivesusadvantages.
Wehavetechnologybuilt
intothestore—Wi-Fi,cell
service,connectivity—so
customerscanbeontheir
phone.A lotofproduct
discoveryforwhatwesell,fashion, begins online. And
we know that over half of
our store sales involve a visit
to our website, usually on
someone’s phone.How is the New York flagship organized
around those changes?The architecture of the place
is very different, very open.
Historically, retail—especially
mall-based retail—has been
very inwardly focused.
Almost like a fortress, a
different environment
shielded off from the rest of
the world. We want to do just
the opposite.At the New York store, you’re letting
customers order food while shopping,
and it’s delivered to them on a nice
plate. Is that going to become a
significant, separate revenue line?It’s not so much about our
revenue line. As we continue
to get better information,
we’ve learned about the
importance of engagement
and experiences. The more
we can engage customers—
and food and drink is part
of that—people come back
more often.^as the nonbanking lending industry has been stung
by a liquidity crunch.”
Indians are mistrustful of strangers handling
their gold, so Rupeek’s agents stay at the borrower’s
home or office until the money arrives in their
account. Pawnshops can often deduct 25% of the
loan upfront before dispensing it or charge interest
rates as high as 48%, essentially making gold-
backed loans a debt trap for the poor.
“The industry is tainted by bad practices,”
Maniyar says. “People have the impression that gold
loan companies are evil and snatch their gold away.”
Yet, Maniyar says, his startup can barely keep up
with demand. Monthly lending rose from $1.5 mil-
lion in January to $16 million in September. Rupeek
declined to give specific revenue and profit figures.
Most borrowers belong to India’s emerging
middle class; they’re raising cash for an unexpected
hospitalization or an education expense, or are
small-business owners looking to tide over working
capital requirements. One borrower in Bangalore
produced two sackfuls of gold and asked for a
10 million-rupee loan. Rupeek had to quickly
arrange for an army of appraisers and an armored
vehicle. There’s also a growing millennial popu-
lation, including employees of Google, Amazon,
and Flipkart, who want to fund a vacation, make
a down payment on a home, or get around a bad
credit score. To avoid letting gold purchased with
unaccounted cash make its way into the banking
system through gold loans, the company collects
the tax identification number of borrowers and
reports its transactions to tax authorities.
To expand its reach, Rupeek is introducing a
“gold locker” product to hook consumers who are
queasy about the words “gold loan.” A user can
deposit his ornaments in a gold locker and borrow
against them. The company is also testing a mobile-
based debit card that’s linked to the gold stored.
And it’s counting on new tieups with foreign non-
banking financial companies such as Credit Saison
of Japan’s Mizuho Financial Group to expand out-
side India. Maniyar says, “We want to be the pipe for
all kinds of gold monetization in India and beyond.”
The business isn’t without pitfalls. A man called
in Rupeek’s agents to pawn a heap of his wife’s jew-
elry to quickly raise capital for his business. Agents
tested the metal and found all the ornaments were
fake except one. The borrower was despondent, say-
ing all the jewelry—save the sole genuine piece given
by his parents—was from his in-laws. —Suvashree
GhoshandSarithaRai,withSwansyAfonso
THE BOTTOM LINE Indians hold almost $1 trillion worth of gold,
much of it in family jewelry. VC-backed Rupeek Fintech is making it
easier for them to tap that value without shame.