Nordstrom: The Story Behind Its Success
A customers sits in an unsold chair at the now-closed Sears downtown Vancouver location as Nordstrom lounges its way into Canada, where there are already 15,000 Canadians in their loyalty program.
A Bloomberg article recently reports the makings of a new Nordstrom Inc. billionaire: 76-year-old Anne Gittinger, the company’s largest shareholder after her billionaire brother Bruce A. Nordstrom. The Seattle-based retailer, whose shares have increased 17% since June and during an economically deteriorating period, operates 240 stores and remains “one of the few department store retailers that is still growing.” In fact, four stores will open in Canada between 2014 and 2016. From case studies such as Zara and Aldo, the mass customization strategy clearly helps generates increasing revenues and meets ever-changing consumer demands. But what makes Nordstrom, a company whose strategy isn’t primarily mass customization since it is a department store, stand out despite a slow changing stock? I did some research on the company and list a few reasons below:
1. Variety in style
The increasing variety of brand and style makes up for the lack of a constantly changing stock within each season. The company also recently partnered with TopShop, everyone’s favourite London brand whose inspirations come directly from the runway targeting young customers.
2. Development of a stronger technological presence
Having purchased hautelook.com, an online shopping website, Nordstrom targets the dollar yet style savvy customer and integrates Nordstrom Rack and hautelook.com marketing under one online premise. Furthermore in 2010, the company invested $69 million to upgrade the company website, better enabling customers to shop at the comfort of their own home and provide in store wi-fi, ultimately enhancing and prolonging the customer experience.
3. Consumer engagement through loyalty programs
The perks of the Fashion Rewards program are hard to ignore. Two points are awarded for each dollar, and for every 2,000 points you spend, you receive a $20 voucher in the mail. The store card also holds key to pre-admission to the Anniversary sale, a fashion hotline and extra points during special sales. Furthermore, the card tracks how each consumer spends and tailors advertisements to particular taste. Some call it an invasion of privacy; Nordstrom calls it two billionaires behind its belt and a third one in the making.