The fanfare surrounding the opening of Nordstrom Inc.'s East Coast distribution center near Bowie last Tuesday is the kind that's usually reserved for the grand opening of a shopping mall or one of its upscale tenants.
Distribution centers are fairly mundane and simply don't carry the cache of a leading department store or specialty retailer. The Nordstrom's facility, however, could be as big a factor in the growth of the region's economy as retail sales.
In the meantime, the hoopla surrounding the opening of Nordstrom's first East Coast store in a couple of months at Tysons Corner is certain to attract more immediate interest among area consumers than the ribbon-cutting ceremony at the distribution center.
Already, retail analysts are calculating the likely impact of Nordstrom's entry into the market on sales at Hecht's, Woodward & Lothrop, Bloomingdale's, Garfinckel's, etc. Consumers, many of them already familiar with Nordstrom's reputation for quality service and merchandise, are primed to take their upscale spending habits to the newest emporium of the Seattle specialty store chain.
Indeed, those spending habits and the nation's highest median household effective buying income are powerful magnets for Nordstrom and other major retailers that have opened stores here in recent years. Nordstrom's cochairman, John Nordstrom, acknowledged in a recent interview that his company "couldn't ignore the demographics of the East Coast or the strength" of the Washington-area market.
Plans to open Nordstrom's second East Coast store in Arlington's Pentagon City and the company's stated interest in building more stores in the Washington-Baltimore region are an unmistakable vote of confidence in the market's strength.
Nonetheless, Nordstrom's decision to build its East Coast distribution center here may be more significant for the region's economy in the long run. Maryland and Prince George's County officials regard the decision to locate the 170,000-square-foot center in the county as a coup. They're understandably excited over what this means in terms of tax revenue and jobs.
The distribution center will employ about 40 people initially, but, with plans to expand the facility, employment is expected to reach 500. Nordstrom's officials plan eventually to serve several stores on the East Coast from the distribution center in Prince George's County.
Not only was the price of land a major attraction, but Nordstrom's was convinced that the location was key to its expansion plans. The region's excellent highway system and the distribution site's proximity to major airports and rail transportation in the area made the difference.
Site location specialist L. Clinton Hoch emphasized those locational advantages last year in a study of investment opportunities in the combined Washington-Baltimore market. In fact, the synergies and locational advantages of the Washington-Baltimore region led Hoch to conclude that four industries in particular would benefit most from being here: computer programming and software services, industrial biotechnology, headquarters and other major office operations, and merchant wholesaling.
The region's highway system, Hoch noted, will expedite deliveries of the merchant wholesaler to customers throughout the market area, where there is a growing demand for all types of goods and services. By extension that includes deliveries to other points on the East Coast.
To be sure, Hoch was referring to merchant wholesalers. His reasoning can be applied to large distribution centers of all types, nonetheless. Nordstrom's not only fits the bill but gives state and local officials an impressive name to use in their marketing efforts. Now it's only a question of how effectively they incorporate that in programs to attract other investors with needs similar to Nordstrom's.
Rudolph A. Pyatt Jr.'s column will run every week in Washington Business and every Thursday in the Business section.