How Nordstrom is Evolving for Today's Consumer

Upscale department store chain Nordstrom opened its doors 111 years ago with one goal: improve the customer experience in any way possible. A lot has changed for the company in the last 111 years, but that singular focus has remained. Jamie Nordstrom, president of Nordstrom Direct, detailed how the company is putting this philosophy into practice in his keynote address at the Shop.org Annual Summit in Denver yesterday.

People are the cornerstone of the Nordstrom brand, Jamie Nordstrom said. The retailer operates with a culture of empowerment where there aren't a lot of rules. Store associates are given the freedom to handle issues as they see fit, the only rule being that they must use good judgment.

Growth Opportunities for Nordstrom
E-commerce will account for the majority of future growth for Nordstrom, Jamie Nordstrom said. The retailer is already seeing that trend this year, with online sales up 40 percent year to date. That said, Nordstrom isn't giving its brick-and-mortar stores a free pass. "Don't cede productivity in-store just because your online sales/profits are growing," said Jamie Nordstrom. "That's not acceptable."

New markets are another area where Nordstrom is counting on future growth. Jamie Nordstrom cited the upcoming opening of the brand's flagship store in Manhattan, the first in the borough, as well as a possible entry into Canada as proof of that. Nordstrom also continues to open its full-line stores in new markets across the country, and has doubled the number of its Rack outlet stores in the last four years (with plans again to double that store count in the next four years).

Mobile, and in particular apps, is a channel that Nordstrom has invested its time and money, Jamie Nordstrom said. That effort is paying off, as the retailer continues to see its percentage of total sales coming from mobile devices grow.

Strategic partnerships with fashion designers and recognizable brands such as HauteLook, Bonobos and Topshop have helped Nordstrom further grow its merchandise offering, driving increased interest from consumers. These partnerships happened organically, Jamie Nordstrom said. We're looking for companies that have capabilities that we need, he added.

Social media is something that Nordstrom has done for years, Jamie Nordstrom noted. The company has always relied on word-of-mouth marketing from satisfied customers to increase brand awareness. The only difference is today that word-of-mouth is occurring on social media platforms such as Facebook and Twitter. Nordstrom also uses its social media outlets as customer service tools, particularly Twitter. The retailer boasts a strong presence on Pinterest, where it counts 1.4 million followers. The site provides another outlet for our customers to talk about fashion, Jamie Nordstrom said.

Evolving Into a Multichannel Brand
Selling to consumers via brick-and-mortar stores, an e-commerce site, mobile website and apps, and catalogs, Nordstrom needed to become adept at providing the same experience to shoppers no matter the channel. While it wasn't the smoothest transition integrating web and store teams, recalls Jamie Nordstrom, the retailer has reorganized as one team working together.

"Customers want the same experience — merchandise, prices, promotions — in-store that they get online," Jamie Nordstrom said. Therefore, Nordstrom maintains a single view of its customers and merchandise across all channels. Buy online, pick up in-store and fulfilling online orders from store inventory are two examples of this single vision.

But who gets credit for the sale, the online team or store team? Who cares, said Nordstrom. There's only one scorecard, and that's Nordstrom's bottom line. Customers don't care who gets credit for the sale; they only care about getting a best-in-class experience every time they interact with your brand. That's where Nordstrom is headed, Jamie Nordstrom said.

To that end, Nordstrom has invested in improving both its in-store and online shopping experiences. The retailer hired more personal stylists to assist in-store shoppers, as well as piloted a program where all store associates are equipped with iPads to enable mobile checkout. Nordstrom also offers different merchandise assortments in each of its store, with products tailored to the local market.

As for online, Nordstrom now offers free shipping and returns on all purchases, and is working hard to cut down on the time it takes to deliver those purchases (often two days or less). Personalizing the online shopping experience is another initiative for Nordstrom. Customers know we have data on them and they want us to use it, Jamie Nordstrom said.