While many traditional stores are closing their doors, Nordstrom remains a retail giant demonstrating the benefits of adapting to changing market conditions. It is true that brands that are flexible enough to adapt to the changing retail landscape—particularly in the pandemic and post-pandemic era—are the ones that will thrive. Nordstrom’s success is due to its adaptive policies to ensure its continued viability and success.
The question, “Why is Nordstrom so successful?” remains pertinent. Answer Barn has done the research to highlight areas that may serve as inspiration to many of those considering launching a start-up or just curious to see how Nordstrom has survived the test of time.
Why Is Nordstrom So Successful?
There isn’t just one thing that makes Nordstrom so successful. Nordstrom is successful due to a variety of reasons such as a diverse portfolio, generous refund policy, strategic partnerships, and exceptional customer service among many, many other reasons..
To learn even more, here is what Nordstrom has done to become so successful:
- Remarkable Customer Service
The retail titan has a long history of offering superior customer service. Nordstrom is selective in its employment practices, preferring to work with “pleasant, skilled people.”
Customers are pleased with the return policy because they know they can bring any item back to Nordstrom and get a full refund.
Finally, Nordstrom has been successful for so long because of the exceptional service they provide to its customers.
- Exposure to Different Customers
Nordstrom Rack generates significant revenue for the parent corporation. Only 10% to 20% of Nordstrom Rack consumers also shop at the high-end department store, indicating that a sizable portion of shoppers continues to pay full price. Their exposure to a new, value-oriented customer base is thanks to the outlets.
- Targeting Young Customers
One of the toughest challenges for retailers is addressing millennials, but Nordstrom has figured it out.
Young Customers looking for discounts are exposed to Nordstrom through the outlet store. The company anticipates that its younger customers will eventually shop at full-line establishments as they enter adulthood.
- Omnichannel Emphasis
In an effort to become the best omnichannel retailer in the world, Nordstrom has set some lofty goals for itself. Nordstrom pioneered the concepts of online and multichannel retailing. Recently, Nordstrom added the feature to buy products featured on Instagram instantly.
Employees will also use information from the company’s Pinterest page to help stock shelves. Products that do well on the platform are given more prominent placement on the shelves.
In addition to its own flash-sale website Hautelook, Nordstrom has made substantial investments in men’s brands Bonobos and Trunk Club.
Nordstrom has highlighted some of the key areas they want to focus on.
Winning Important Markets
By incorporating Nordstrom Rack’s assets and further developing the company’s distribution capabilities, Nordstrom is expanding the deployment of its market strategy to its 20 top markets, which account for around 75% of sales.
This strategy has been so effective that it has been adopted as the company’s core approach.
Expanding Nordstrom Rack
Nordstrom is increasing the variety of prices at Nordstrom Rack and strengthening the link between in-store and online stock to boost sales and customer satisfaction.
According to projections made by management, Nordstrom Rack will eventually add $2 billion to the company’s top line.
Expanding Online Presence
Nordstrom is expanding its product offering, improving its personalization capabilities, and strengthening the connections between the online and offline components of the business.
In the future, the Company believes that digital sales will account for roughly 50% of overall revenues.
Unlocking Digital Potential
Nordstrom is maximizing its digital-first platform to achieve the company’s strategic goals of more consumer engagement, increased sales, expanded product offerings, and enhanced customer service.
The Company’s “closer to you” brand objective of serving consumers on their terms will be realized this way.
Nordstrom Future Plans
Nordstrom’s plans include the following:
Using its IT infrastructure, Nordstrom is developing a 360-degree view of its customers and their shopping habits, as well as the products and stock available at the retailer.
The combined effects of these initiatives allow Nordstrom to offer scalable customization and improve the shopping experience for all customers.
Nordstrom is broadening the range of people it serves and the channels through which it does so, with a special emphasis on attracting new customers to Nordstrom Rack.
A Wide Range of Choice
By focusing on fast-growing product categories, Nordstrom hopes to raise its current inventory of 300,000 items for sale to more than 1.5 million.
When it comes to customer care, Nordstrom has always been at the forefront.
And now the company is taking its expertise online to provide a more streamlined and unified experience for shoppers regardless of where or how they want to do their shopping.
The combination of Nordstrom, Nordstrom Rack, Trunk Club (a subscription box service), and Bevy Up allows Nordstrom to meet the most important buying needs of their customers in the modern period.
Exclusive Brands And High-End Designer Goods
Nordstrom has positioned itself as a high-end department store stocking designer brands and luxury goods, including apparel, shoes, handbags, and jewelry.
By forming partnerships with digitally native, direct-to-consumer businesses like Greats, Top Shop, Reformation, Allbirds, Stella, Glossier, and Dot, Nordstrom has set itself apart from competitors.
These strategic brands attract more customers to Nordstrom, who spend more on other products, increasing revenues by 30% compared to non-strategic brands.
Nordstrom’s financial position is sound and expanding quickly, thanks to the success of its rack-store, e-commerce sites, anniversary specials, pop-up stores, and promotions.
Exceptional Customer Service
As we have highlighted earlier, Nordstrom’s customer service defines it. One of Nordstrom’s greatest strengths is the individualized attention it gives its customers.
When customers walk into a store, a sales assistant is supposed to meet them and help them find what they need.
Remarkable Return Policy
Customers are more at ease making purchases at Nordstrom because of their generous return policy.
Innovating Customer Experience
Nordstrom was one of the first US department shops to fully embrace and utilize digital technologies to improve the shopper’s experience.
It has a new flagship shop in New York City, and it offers a better Omni-experience by letting customers virtually try on items and use a Trunk Club to personalize their purchases before they buy them in-store or online.
All orders, regardless of size, are shipped for free at Nordstrom. However, rival department stores like Nordstrom have the minimum purchase required to receive free shipping on your order.
Because of the rising popularity of shopping online, Nordstrom may distinguish itself from its rivals by offering free shipping.
Strong Sense of Corporate Responsibility
Nordstrom has donated millions to hundreds of non-governmental organizations (NGOs) in the United States, Canada, and Puerto Rico to show its support for the local communities in which it operates.
In addition to contributing to Good+Foundation, Nordstrom promised $5 million in New York City-based initiatives and community grants by 2020.
Macy’s (M), Neiman Marcus, Dillard’s (DDS), and Saks are just a few well-known retailers that compete with Nordstrom by offering high fashion in a similar department store structure.
The Bottom Line…
Nordstrom’s success has been exceptional, while other retail stores did not adapt to the changing, new customer behaviors.
Among many of Nordstrom’s strengths are the store’s exceptional customer service and remarkable return policy.
These not only have set the store on the course of success but also have set it apart from others.