We compared the shopping experience at Nordstrom Rack and Saks Off 5th, and there was a clear winner

Nordstrom Rack exteriorShoshy Ciment/Business Insider

  • Nordstrom and Saks Fifth Avenue each have their own discount clearance stores: Nordstrom Rack and Saks Off 5th, respectively. Both offer designer brands for less.
  • These off-price stores have an opportunity to be a bright spot for their parent companies as discounting remains in high demand.
  • We visited Nordstrom Rack and Saks Off 5th stores in New York City to see which offered a better off-price retail experience. Saks Off 5th won us over with its chic design and high-end shopping experience.
  • Visit Business Insider for more stories.

For savvy shoppers who don't want to break the bank, Nordstrom Rack and Saks Off 5th could be the perfect solution.

Both Nordstrom Rack and Saks Off 5th offer merchandise similar to that of their respective parent department stores, but at a significantly lower cost.

These stores have a chance to be a bright spot for their parent companies as the American middle class shrinks and bargain shopping remains popular. UBS analysts wrote in a recent note that Nordstrom is losing customers to lower-priced competitors. Plus, Nordstrom Rack stores now outnumber full-priced Nordstrom department stores.

Read more: UBS skewers Nordstrom as a 'no-growth retailer' that's suffering from a 'cultural shift' in shopper behavior

With designer merchandise at bargain prices, Nordstrom Rack and Saks Off 5th are fierce competitors in the discount shopping sector. But which store does it better?

We visited New York City locations of both stores to see for ourselves. Saks Off 5th won us over with its trendy store design and abundance of designer options. Though its prices were generally higher, Saks Off 5th offered an exciting shopping experience that more closely resembled that of its parent department store.

Here was our experience:

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First, we stopped by Nordstrom Rack in Union Square.

First, we stopped by Nordstrom Rack in Union Square.

Nordstrom Rack started as a clearance center in the basement of a Seattle store in 1973. There are currently more than 240 store locations across the US and Canada.

Nordstrom Rack started as a clearance center in the basement of a Seattle store in 1973. There are currently more than 240 store locations across the US and Canada.

Source: Nordstrom

Upon entering, we were greeted by an overwhelming display of hundreds of sunglasses.

Upon entering, we were greeted by an overwhelming display of hundreds of sunglasses.

We then made our way down the escalator to the main shopping area.

We then made our way down the escalator to the main shopping area.

The clothing selection was huge and pretty easy to maneuver. The store was mostly open space, and the clothing was placed on different metal racks.

The clothing selection was huge and pretty easy to maneuver. The store was mostly open space, and the clothing was placed on different metal racks.

Many of the items were from designer brands like Joie, J.Crew, Theory, and Ted Baker — but all at discount prices. This Kate Spade tweed jacket, originally priced at over $400, was going for $179.97.

Many of the items were from designer brands like Joie, J.Crew, Theory, and Ted Baker — but all at discount prices. This Kate Spade tweed jacket, originally priced at over $400, was going for $179.97.

There was also an enormous denim section located in the center of the store.

There was also an enormous denim section located in the center of the store.

Though technically a branch of Nordstrom, this store had a cheaper quality to it. The bright lighting and cheap plastic hangers clearly differentiated this store from its parent brand.

Though technically a branch of Nordstrom, this store had a cheaper quality to it. The bright lighting and cheap plastic hangers clearly differentiated this store from its parent brand.

The men's section was similarly well-stocked with everything from dress shirts ...

The men's section was similarly well-stocked with everything from dress shirts ...

... to t-shirts.

... to t-shirts.

We found a delightfully colorful tie display.

We found a delightfully colorful tie display.

We were pleasantly surprised by the vast shoe section at Nordstrom Rack.

We were pleasantly surprised by the vast shoe section at Nordstrom Rack.

And, the prices were unbeatable. These sparkly heels were marked down to $59.97 from $99.

And, the prices were unbeatable. These sparkly heels were marked down to $59.97 from $99.

The store was filled with great finds. This Ted Baker watch— at $59.97 — was more than 50% off.

The store was filled with great finds. This Ted Baker watch— at $59.97 — was more than 50% off.

But we couldn't shake the feeling that the store was of a lesser quality.

But we couldn't shake the feeling that the store was of a lesser quality.

A lot of items seemed crammed onto racks, which made the store feel much more like a TJ Maxx than a Nordstrom.

A lot of items seemed crammed onto racks, which made the store feel much more like a TJ Maxx than a Nordstrom.

And the clearance bins had a warehouse, final-sale quality to them.

And the clearance bins had a warehouse, final-sale quality to them.

At the checkout line, there were many items that seemed out of place in a department store. We saw Fourth of July decorations and many shelves filled with sunscreen.

At the checkout line, there were many items that seemed out of place in a department store. We saw Fourth of July decorations and many shelves filled with sunscreen.

Overall, the deals at Nordstrom Rack were beyond compare, but the physical structure and layout of the store left much to be desired.

Overall, the deals at Nordstrom Rack were beyond compare, but the physical structure and layout of the store left much to be desired.

Next, we went a little further uptown to Saks Off 5th. It was actually right off Lexington Avenue.

Next, we went a little further uptown to Saks Off 5th. It was actually right off Lexington Avenue.

The store had a sign that advertised up to 70% off every day. But there was also a special holiday sale happening when we visited.

The store had a sign that advertised up to 70% off every day. But there was also a special holiday sale happening when we visited.

Before we went inside, we could already tell this was going to be a different shopping experience — and probably more expensive.

Before we went inside, we could already tell this was going to be a different shopping experience — and probably more expensive.

The store's interior was magnificent. There were marble pillars on both sides of the main entrance, reflecting the sunlight streaming in from the skylight.

The store's interior was magnificent. There were marble pillars on both sides of the main entrance, reflecting the sunlight streaming in from the skylight.

Unlike the gray carpet that covered most of Nordstrom Rack, the floor here was made of wood and what appeared to be marble.

Unlike the gray carpet that covered most of Nordstrom Rack, the floor here was made of wood and what appeared to be marble.

The signs here were more exciting, too. The neon pink lights found throughout the store were a chic and trendy design choice.

The signs here were more exciting, too. The neon pink lights found throughout the store were a chic and trendy design choice.

This spiral staircase leading to another floor was, too.

This spiral staircase leading to another floor was, too.

Everything about this store screamed quality, from the lighting design ...

Everything about this store screamed quality, from the lighting design ...

... to the mannequins.

... to the mannequins.

The geometric design on the walls also contributed to the modern and trendy atmosphere.

The geometric design on the walls also contributed to the modern and trendy atmosphere.

But with high quality comes high prices. This Valentino bag was marked at nearly $35, though it was originally priced at close to $900.

But with high quality comes high prices. This Valentino bag was marked at nearly $35, though it was originally priced at close to $900.

Some items were enclosed in glass. I didn't see any prices listed here, but my guess is that they probably weren't cheap.

Some items were enclosed in glass. I didn't see any prices listed here, but my guess is that they probably weren't cheap.

Like in Nordstrom Rack, the shoe department at Saks Off 5th was huge.

Like in Nordstrom Rack, the shoe department at Saks Off 5th was huge.

Admittedly, the shoes here were neat. But the prices weren't meant for people shopping on budget. These platform loafers were marked at $599.99.

Admittedly, the shoes here were neat. But the prices weren't meant for people shopping on budget. These platform loafers were marked at $599.99.

The store was designed in a way that we could see two levels of merchandise from our vantage point on the middle floor.

The store was designed in a way that we could see two levels of merchandise from our vantage point on the middle floor.

We couldn't get a lot of photos of the clothing downstairs, but the selection was huge and, on the whole, pretty expensive.

We couldn't get a lot of photos of the clothing downstairs, but the selection was huge and, on the whole, pretty expensive.

There was also a large section of beauty products on the middle floor.

There was also a large section of beauty products on the middle floor.

On our way out, we heard a customer mutter, "Can you even tell the difference between this and the normal?" It's true — the elegant store layout and design made Saks Off 5th hard to distinguish from the real thing. The store offered a superb shopping experience, despite its high prices compared to Nordstrom Rack. After shopping here, it was clear that Nordstrom needs to step up its game.

On our way out, we heard a customer mutter, "Can you even tell the difference between this and the normal?" It's true — the elegant store layout and design made Saks Off 5th hard to distinguish from the real thing. The store offered a superb shopping experience, despite its high prices compared to Nordstrom Rack. After shopping here, it was clear that Nordstrom needs to step up its game.
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