5 Ways Nordstrom Is Engaging Shoppers

Nordstrom, Inc.'s net sales increased 2% percent to $3.54 billion in its third quarter of 2017, but same-store sales declined 0.9%. Lost sales from the recent hurricanes accounted for approximately $20 million.

Nordstrom Rack total sales were up 5.5% and comps were up 0.8%, but this "reflected a step down from recent trends," according to Co-President Blake Nordstrom.

"In hindsight, our sales plan at the beginning of the year was too aggressive," he explained. "As a result, we found ourselves over-inventoried without the fluidity necessary to chase the business."

The retailer also said it's continuing to modernize its platforms and its investments are shifting to cloud-based solutions, which has created an immediate expense impact rather than capitalization. Technology investments are on track with the retailer's plan to spend $540 million or 3.5% of sales.

"Finding new ways to engage with customers on their terms is as important as ever," said B.Nordstrom. "We’re continually testing and learning from new concepts to deliver experiences that improve speed, convenience, and personalization for Nordstrom customers."

Nordstrom's digital push is progressing too, resulting in the retailer delivering online sales growth of 14% at Nordstrom.com and 26% at Nordstromrack.com/HauteLook on a year-to-date basis. Online is approaching 25% of Nordstrom's sales.

"During this holiday period, we believe the strength of our digital capabilities along with our local market assets, our people, product, and place represent a significant competitive advantage in serving our customers," said B.Nordstrom.

To keep up with evolving consumer habits, here are five of the ways Nordstrom is engaging omnichannel shoppers.

24-Hour Buy Online Pick up In-store 

Nordstrom said next month it will offer 24-hour curbside pickup in major markets, including Seattle, Chicago, Dallas, and San Diego. That means for the holidays, these shoppers can pick up their purchases any time of day.

"In terms of services for holiday, a lot of the new tweaks that we’ll be rolling out are around making shopping in our stores more convenient," said Jamie Nordstrom, president, Nordstrom Stores, and EVP Nordstrom, Inc.

He noted the 24-hour option is an example of "how we’re looking at all of our capabilities that we’ve invested in over the last few years and how we can leverage them to improve our service and make the experience better."

Reserve Online and Try In-Store

This is a great service for shoppers who don't have time to rummage through racks searching for their sizes. After reserving clothing online, a customer picks up their clothing in store and heads right to a changing room to try on their choices for fit and style.

The service was recently expanded to more than 50 stores across the country.

"Our customers appreciate its speed and convenience," said B. Nordstrom. "It frees up their time, and if they choose to do additional shopping in our store, this results in a material lift in their spend.

Nordstrom also offers Style Boards, a digital selling tool that leverages the expertise of Nordstrom's salespeople and enables customers to receive personalized product recommendations on their mobile phones.

Pop-In Shops

Nordstrom's partnerships with fashion influencers are another way it's creating discovery for customers. Nordstrom Pop-In Shops give customers access to highly sought-after brands like Warby Parker and Goop and the company's recent partnership with Everlane has been its most successful Pop-In concept to date.

"We collaborated with the popular fashion blog, Something Navy, to launch an exclusive capsule collection with our in-house Treasure & Bond brand," B. Nordstrom noted. "It was our largest brand launch ever, generating $2 million in demand for the first day."

Supply Chain Enhancements

In its supply chain, the retailer continues to see the impact associated with the accelerated growth of online. Nordstrom's said it has made operational improvements to reduce split shipments and canceled orders, which has resulted in a better customer experience while reducing average cost per unit. The company said going forward, it sees further opportunities to gain efficiencies.

Nordstrom Local

This test retail concept focuses on services. The new tiny store in Los Angeles rolled out in September with no dedicated inventory, but plenty of Nordstrom services, such as personal stylists who can transfer merchandise in for customers. Shoppers can also get alterations, a manicure, or just have online orders hand-delivered to their cars.

"In the first four weeks since opening, we’ve had thousands of customer interactions and are applying the learnings to innovate further," said B. Nordstrom. "Ultimately, our goal is to drive increased customer engagement and market share."

Nordstrom Local could be seen as the redefining of the brick-and-mortar version of this department store. The store has one styling suite and eight dressing rooms surrounding a central meeting space where customers can sit comfortably, enjoy a glass of wine or beer, and chat with their personal stylists.