It’s a combination of curiosity, openness to new types of supplier partnerships, and online expansion that play a key role in Nordstrom Business Strategy of Inc.
There’s also a steady stream of retailer-made labels that help keep merchandise fresh and identify what’s become less relevant.
“We have 10% of our suppliers revenue each year based on things that are no longer valuable and new things that come in,” says Pete. Nordstrom, the company’s president and chief brand officer, who spoke Tuesday morning at the National Retail Federation’s annual “Big Show” conference at the Javits Center in Manhattan. A socially distanced Nordstrom appeared on screen from Seattle, where Nordstrom is based, rather than in person, during his conversation with Phil Wahba, a senior writer for Fortune Magazine.
“There has always been this evolution of brands, which is one of the great things about being a department store. It’s important to consider being open to things that we haven’t been open to before. ”
Nordstrom said the company is trying to become more important to brands, especially those most coveted by Nordstrom shoppers, by expanding the offer to more than what’s only available in stores. store, which means more sales on nordstrom.com.
“Burberry, for example, sells a lot of good stuff,” says Nordstrom. “They have things for pets, for kids. They have all kinds and our customers want to buy them. We want to be the best location in North America for Burberry. We have to find a way to deliver what they do.”
Nordstrom has been expanding the “aperture” of what the company offers shoppers, he said, particularly in the home and sportswear areas.
“We’ve never run a home-based business in such a big way,” says Nordstrom. “As online became a more important part of our business, we realized that, great, we could have a great online offering that could be supported in a physical environment. . That really opened the door for us to do more. ”
In February 2021, Nordstrom Inc. said it plans to expand its digital portfolio from 300,000 items to 1.5 million over the next three to five years.
Last year, Nordstrom opened a two-story residence in the premier women’s section on 57th Street in Manhattan. It’s packed with novelty gifts and treats, plus one-of-a-kind things including books on the coffee table, stylish kitchenware, throws and pillows.
“Home is a broad business with a lot of competition,” says Nordstrom. But in New York City, people “have an eye on doing New York-only things.… A big part of what makes such a division work is its spontaneity: ‘I’m not coming. looking for that, but it’s so cool I want to buy it. ‘ That’s the fun part of retail for us, and I think that’s what we’re good at, and then we have to make sure we have what people expect of us and make sure that we have stock available. You think about the family business in the city and how it’s different in the American suburbs.”
With a three-month partnership with Fanatics, “We were able to do business with them in a way where we really had no ownership of the product and really acted as another platform to deliver.” products to our customers online and see where that takes us. It really reflects where we can go and how things have evolved,” from the traditional way of working with suppliers and brands.
Nordstrom is looking to capture the majority of wallets from existing and new customers who are sports fans, and is offering thousands of licensed sports products through Fanatics for the first time. “Obviously, our customers buy those things too. When you get into those sportswear things and you want to represent all the teams and all the communities we serve, that’s a lot of SKUs,” Nordstrom said. “The place to start is to offer things broadly and over time focusing on where customers might be interested. Surname [Fanatics] there are different things they do with different partners. There are early days so we can talk about that in advance. We are actually in a more learning mode. They have been a great partner. They have a lot of possibilities. They have a lot of data and information about customers. So those are the early days. With things like this, the curation, I’m not sure that matters that much,” at least initially. “It’s really not too much of a concern, especially with something like this.”
In general about Nordstrom’s intention to grow online, he said: “It’s good to have new options. It’s good to have lots of choice and not so good to have something overwhelming. I don’t think our goal is to be the aggregator of everything. We want a point of view. Our point of view is really broad. We aim for quality. ”
What’s important, he says, is “the way we paginate and work the site so that it feels complementary to the vast base of what we do. We also want the brand to look great online.
“I have no crystal ball on how all of this works, especially how it works in conjunction with our physical stores. Every day we are learning, growing and developing. Hopefully that’s one way of making the customer happy,” Nordstrom said.
Last July Nordstrom acquired an interest minority stake in the Topshop, Topman, Miss Selfridge and HIIT brands owned by Asos, London-based fashion website. It’s an unusual kind of partnership, as Nordstrom is not a business that invests in the marketplace brands it sells in stores and online. The deal is designed to help grow and secure the future of four UK brands, especially the trendy and affordable Topshop for women and Men’s Topman, while also reflecting efforts Nordstrom in increasing its appeal to younger shoppers.
“Asos came because of our relationship with Topshop. It was a really big business for us and still is. Topshop was sold, Asos finally bought it. There’s a reason for us to come together. With the Asos partnership, “We are still in the early stages of developing that,” Nordstrom said. “The way we do business together is really different” from the way Nordstrom does business with traditional brands. “They’ve never sold to anyone else,” Nordstrom said, adding that his company in this case is acting more like a platform to deliver the full spectrum of what Asos has to offer. “We’re working through all of its infrastructure pieces.”
With Nordstrom’s online expansion, search, personalization and data functionality have become even more important, so the experience for shoppers isn’t overwhelming.
During the pandemic, Nordstrom’s e-commerce accounts for about 50% of its total sales. It has stabilized back in the 40 percent range. “We don’t get too concerned about how much business we need to do in one channel or the other. It will find its natural level,” based on how the customer wants to shop. “We just want to be able and willing to grow that way in real time.”
Nordstrom has a track record of engaging direct-to-consumer brands, and Nordstrom explains why. “What we offer is we take a lot of customers, high quality customers, and let them get in front of them in a way that doesn’t involve marketing to people and the cost of acquiring customers. new products. ”
Additionally, “We’re interested and willing to work with new brands and have a sense of flexibility to do what we can to work together and that’s great. The perfect scenario for us is to have a popular, highly sought after brand that you can’t find in many places. I don’t think we’re good at working for an unknown brand. But we are very good at making a brand known bigger and better… .We welcome the opportunity to work with such new brands. That’s actually the fun part of the job.
“You don’t have to be a wholesaler to be at Nordstrom. There are other ways to do business together. Doesn’t mean it’s easy to do all of that, but you have to be willing and willing to try and find the right fit. ”
Discussing supply chain bottlenecks, Nordstrom said: “At a given time, there’s just so much product that you can put into your system. So it is a limiting factor for us that how many units we can pass. ” Nordstrom, who joined the family company as a stock boy, said when it came to a buyer: “We really don’t talk about the number of units as much as we talk about the dollars that we do. I’m looking at open to buy and inventory levels. “But that has changed.
“Ultimately, you want the inventory you have in place to be ready to sell to customers as quickly as possible. That requires a lot of expertise and competence behind the scenes. We’ve invested in that, but we’ll be the first to say we have a long way to go. It is far different from before. There are important customer things going into the supply chain that never really existed 20 years ago.”
Nordstrom also spoke about the company’s off-price Rack business, which has had a difficult and trailing 2021 for Nordstrom Inc. He talks about its evolution, first as a means of clearing for full department stores, then buying into categories with brands, and then adding Rack.com.
“There is a skill set and the whole way of doing discount trading that is a little bit different than a full price banner,” says Nordstrom. “In order for us to maximize our chance of a discount, we had to find an even more homegrown and hybrid product: some specific skill set that allows our business to perform better. That’s always been true to an extent, but we’ve grown to the point where it’s important for us to be more intentional about it. There’s a huge opportunity for us to do better in the Rack business and we’re excited about that. ”
https://wwd.com/business-news/retail/nordstrom-pete-nordstrom-merchandising-nrf-1235038218/ Pete Nordstrom on Nordstrom Inc.’s Merchandising Philosophy – WWD