Nordstrom has long represented a gold standard for department stores, but the legacy company is feeling strained under 2020’s retail landscape.
At Footwear News’ Virtual Summit on Wednesday, company president Jamie Nordstrom spoke to the challenges the 119-year-old chain is facing—and the omnichannel strategies it’s employing to dig its way out of the trenches.
The retail giant is taking its cues from successful e-commerce businesses like Amazon and pouring resources into its web presence—and fast, free shipping, the executive said. “If you can’t deliver next day on most of your products, you’re kind of not in the game,” he said.
The company has been laser focused on its “market strategy,” or bringing merchandise closer to where customers live. Shoppers in top markets like Los Angeles and New York City, along with a handful of other large urban centers, can buy many on Nordstrom.com and have their purchases delivered the following day for free.
Nordstrom has merchandise “forward deployed” to its busiest markets and holds the goods in stores, which act as mini warehouses. “We’re fulfilling out of those stores, and we get the merchandise to the customer really fast,” he said.
The company has also expanded its buy online, pick up in store (BOPIS) experience. In its largest markets, Nordstrom has multiple stores with differing assortments. Now, shoppers can pick multiple items from their region—which might be held in different locations—and have them consolidated at a single store that is most convenient for them.
“We’ve basically taken all of our assets that we have in our biggest markets, and tied them together to give to the customer,” he said.
The company is also looking to expand its tailoring and return services for Nordstrom purchases to Nordstrom Rack stores, which he noted are often located in convenient locales. “They’re typically on [a consumer’s] way home from work, or near where they shop for groceries,” he said.
Virtual appointments with in-store stylists are also a new, heavy push, Nordstrom added. The company has received loud-and-clear feedback for years about how valuable its styling services are, and those consumer desires haven’t subsided, even in a lockdown.
“Our salespeople are walking around the store on Zoom or FaceTime, showing the new stuff that came in,” he said, “or texting them pictures of the hot new item that may not be on the website yet.”
The company has been building out these services for years now, Nordstrom said. “We weren’t doing it in anticipation of a global pandemic, but these kids of capabilities and experiences definitely resonate.”
Giving consumers more choices on how to shop is an essential part of remaining relevant through the crisis, he noted. The Nordstrom Rack and Hautelook off-price channels have been the fastest-growing segments of the overall business in recent years, he added, and the retailer is keen to refresh consumers’ online experiences with those brands, too.
Replicating the “treasure hunt” experience that customers get when sifting through racks for their perfect find is difficult in the digital realm, he admitted. The company also deals with lower price points and smaller margins through those channels, so it’s difficult to make up for the lost foot traffic.
E-commerce accounted for around one-third of the company’s overall business in 2019, Nordstrom said. “We’ve found that we’ve got to be focused on the customer, however they want to shop, and let the chips fall where they may,” he said. By the end of the year, Nordstrom predicts that the retailer’s breakdown between in-store and online sales may be about even.
“Customers are shopping digitally, and they’re using stores differently,” he said. “They’re using them for alterations and services, but the demand is increasingly being driven by digital, through social marketing and search.”