By  on May 22, 2006

SEATTLE — Jamie Nordstrom, president in charge of the direct business, doesn't doubt for a second that can be a billion-dollar business.

"Absolutely, this is a billion-dollar channel for us. The question is when. Some people say we will get there by 2010. Some people say something else."

It's got a long way to go; Nordstrom reported $401 million in direct revenues in 2005, Internet and catalogue sales combined.

However, the Internet portion grew by over 40 percent last year, well beyond the industry average of 20 to 30 percent annually, while the catalogue is increasingly becoming an advertising vehicle and less a revenue generator. Catalogues are now sent monthly to customers and are geared to drive business to stores, phone orders and the retailer's Web site.

What's the key to growing the Internet business? "It's got to be the same experience as the stores. It took us a while to figure out that it's in the merchandise,'' Jamie said.

Initially, the company was nervous about making the same merchandise that was in the stores available online, but eventually noticed a pattern. "Our top-10 list of bestsellers on the Web is very similar to our top-10 list in the store," Jamie said.

The company does feature the same "hot" merchandise items in store and online, and is one year into a three-year mission to achieve a "one company view" of inventory.

Among the Web site's features is the "designer boulevard" created by illustrator Ruben Toledo, which depicts designer boutiques. The "boulevard" is currently nontransactional, but is expected to go live with e-commerce in the fall.

Other changes are in the works. The 300,000-square-foot Cedar Rapids, Iowa, call and fulfillment center will double in size eventually as part of a 12- to 18-month upgrading to accommodate bigger inventories and more transactions.

A long-term goal is to make it possible for online shoppers to pick up products at the stores and see online which stores carry the products.

Currently, the Web site enables consumers to view and shop Nordstrom catalogues online; shop by brand, price, size and colors, and chat live with Nordstrom sales help. There's a $5 flat-fee standard shipping, a store locator, free returns or exchanges of online purchases in any Nordstrom store and virtual gift cards.

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