The Never-Ending Relevance of ‘The Nordstrom Way’

In 1995, when my original book, “The Nordstrom Way: Inside America’s Number One Customer Service Company,” was published, I never imagined that more than two decades later I’d still be chronicling and speaking to corporate groups about this iconic Seattle retailer.

But the book became a best-seller, I became an international speaker, and my life changed forever.

Why I am still writing about this soon-to-be 117-year-old company? Because Nordstrom continues to adapt, innovate, evolve and survive despite the vagaries, vicissitudes and demands of the Darwinian world of retail.

“The Nordstrom Way to Customer Experience Excellence: Creating a Values-Driven Service Culture,” co-authored with breAnne O. Reeves, my business partner in our RSi consulting company, is our most recent take.

In 2005, I blew up the 1995 book, which was almost completely dated and irrelevant (no mention of the internet, among other things), and I did it again in 2012 because Nordstrom keeps adapting to the retail environment.

Unlike the previous books in the series, our new book focuses not on strategies and practices, but on these nine non-negotiable core values that define the Nordstrom culture:

1. Trust
2. Respect
3. Loyalty
4. Awareness
5. Humility
6. Communication and Collaboration
7. Competition and Compensation
8. Innovation and Adaptation
9. Give Back and Have Fun

“Values define who we are, and if they change we become something else,” said Pete Nordstrom, co-president of the company along with older brother Blake and younger brother Erik, who are great-grandsons of the founder. “Practices are ways of doing things that express our values. Practices may serve us well for long periods of time, but they're not values, and therefore can be changed without changing our culture.”

After all is said and done, the reason why Nordstrom stays relevant and competitive is that the company attracts people who share these core values. Retail is a relationship business, and no relationship — whether business or personal — can survive without trust, respect, loyalty, awareness, humility, communication and collaboration.

With those values as the foundation, Nordstrom creates a culture of innovation and adaptation in order to stay relevant.

I teach a course on retail strategy to junior and senior business majors at Western Washington University in Bellingham, Washington, where I live. One of my students’ projects is to research once-important retailers that are no longer in existence or severely diminished. The list is a long one: Montgomery Ward, Circuit City, Borders Books, Blockbuster Video, Tower Records, Thom McAn Shoes, E.J. Korvette, et. al. In literally ever case study, the primary reason for the retailer's demise was failure to adapt.

Nordstrom is not making that mistake. I’ve lost count of how many Seattle natives tell me how disappointed they are in the retailer that they grew up with. “Nordstrom is not like it used to be,” they bemoan.

“And thank goodness,” I reply. “If Nordstrom was like it used to be, it would be Sears.”

When the average person thinks of Nordstrom, they imagine one of those handsome, well-stocked, full-line, regular-price stores that anchor the local upscale shopping center. Well, that business accounts for only half of Nordstrom’s more than $15 billion in annual sales. The other half comes from Nordstrom Direct (online and catalog) and the Nordstrom Rack clearance stores. That’s adaptation. That’s asking, “What next? What else can we do to enhance the customer experience?"

In this brave new world of retail, Nordstrom is reimagining the role of the physical store, which is now digitized and complements the online channel, in a seamless experience for customers.

Nordstrom’s Chief Innovation Officer Geevy Thomas, a 35-year veteran of the company, and the former President of Nordstrom Rack, told us, “Our future is going to allow us to leverage our history, but not be held prisoner by it. How do you leverage the newest technology to make retail more relevant, more fun, more connected from a social perspective?”

Robert Spector is the co-founder of the RSI consultancy, best-selling author, international speaker, educator and advisor to organizations.