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‘What We Know About Customer Service May No Longer Be Valid,’ Eric Nordstrom Says

Nordstrom Inc.’s evolution toward an experiential, local-market strategy sprang from a willingness to listen to and learn from customers.

And at the NRF Big Show this week in Manhattan, co-president Eric Nordstrom encouraged attendees to “be curious” and “humble,” and always remain willing to learn and try new things.

“When we signed the store lease in 2012, we were looking at a four-wall performance. A couple of years ago, we realized it’s not about the four walls. The reason for a store change is the need to be experiential. It can’t be just about convenience to pick up something,” Nordstrom said, noting that the women’s flagship that opened in Manhattan on Broadway and 57th Street last year is the “most experiential store we have.”

The store has been praised for its airy, open design and strategic use of modular fixtures that allow for flexibility in layout as needs change.

“My favorite part is the shoe department. We put a bar in there,” Nordstrom said. “Customers can [sit down and] have a drink, which helps sells things.”

He describes having customers “buy shoes with a drink in their hand” as a “great combo,” largely because the department store, which made its name in footwear, sells “a lot of shoes.”

Remaining open to new ideas helps retailers learn how to best evolve to meet their customers’ needs, Nordstrom said, citing customer service as one example.

“What we know about customer service may be no longer valid,” he said. “The more we can engage with the customer, the better it is for our business. The more touch points we have makes them happier and more loyal.”

While focusing on the customer and the services it offers has long been a core value of the Nordstrom, what has changed is its hyper-focus on how the customer engages with the company. And zeroing in on that element is central to how Nordstrom can stay relevant as it targets the next generation of shoppers, the co-president said.

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“The most common downfall is you get old with your customer. It’s easy to do,” Nordstrom said, explaining that “it takes a concentrated effort to keep the age [range] of our targeted customer.”

“How they discover product is different,” Nordstrom said, explaining that because the department store is not in the commodity business, it means that “brands matter, and the story behind the brand is important.”

For a premium retailer such as Nordstrom, that means making it easy for customers to make a purchase, as well as discover new brands. It’s also important to offer a seamless experience both online and off, so that the inspiration that begins online can easily be satisfied by quickly finding the right product during a trip to the store. More than half of Nordstrom’s brick-and-mortar sales are influenced by the online journey at some point, he said.

Of course, products remain important because retailers are in the business of selling brands. To that end, “We want to be the place that curates the best brands in the world,” Nordstrom said.

“We need to be the retailer of choice [as] the wholesale partner,” he added, noting that over the past few years, the chain also has been the “retail player where we may have been the only wholesale partner [for a brand].”

Looking ahead to scaling the retailer’s local market concept in 2020 to its top 10 best markets, the retailer will continue to leverage its inventory better by bringing in more products to get them to the customer faster. And that means using technology to better capture and understand which data is most useful in learning what customers in a given local market are looking for, Nordstrom said, noting that even the local service hubs serve as learning centers. Those small-footprint hubs are inexpensive and can be opened quickly, which means Nordstrom can test different formats to gauge what works locally, he said.