It’s day two of the Nordstrom Anniversary Sale, the pre-sale period just for store cardholders, and Ruth Perlman, a playwright, was exiting the Seattle flagship, awed by the throngs and exhibiting some shopper fatigue.
“The waiting time for a dressing room in the Indie/Studio bridge department was 45 minutes,” said Perlman. “The crowd was being managed by an attorney from corporate, upstairs. Ordinarily, I would have walked away, but I waited it out. I was charmed by the all-hands-on-deck spirit.”
And no doubt seduced by the opportunity for serious bargain hunting for fall fashion.
The Anniversary Sale is Nordstrom’s biggest event of the year, and the Seattle-based retailer’s one and only promotion, this year held July 9-16 for cardholders to get early access to the exclusive, limited supply of fall goods that Nordstrom stocks in stores and online, and it continued from July 17 to Aug. 2 for the general public.
The Nordstrom Anniversary Sale has become an industry phenomena, not only because of its popularity and revenue potential, but because of its unique format that hasn’t yet been copied by competitors. Retailing in July is typically in the doldrums and most department stores have racks of clearance and no new merchandise. But Nordstrom’s Anniversary Sale is not a promotion or clearance. New fall merchandise is stocked just for this event, with buyers getting orders from vendors when department stores typically don’t get them, and Nordstrom achieving a surge in volume in an otherwise soft sales period.
The merchandise initially is priced at a discount, generally 33 to 40 percent off. With Kate Spade shoes or some other brand, there might be 20 pairs on the floor on any given day during the year. However for the sale, designers and brands might have three items, creating a sense of urgency and exclusivity. Nordstrom locations curtain-off or stanchion-off areas for Anniversary Sale merchandise and it’s always signed well. Nordstrom is strict about not giving non-cardholders access to the presale. Consequently, the event is a credit card acquisition tool. When the sale is over, items revert to regular prices. Nordstrom conducts a postmortem and the team quickly starts planning next year’s event, 12 months in advance.
“It’s an unusual event,” said Erik Nordstrom, co-president of Nordstrom Inc., and has been challenging for the company to communicate what it’s all about, both internally and externally to consumers. Some think it’s about “clearing out older stuff, but it’s brand-new merchandise being marked down,” Nordstrom said.
Still, “Customers who know the event get quite passionate,” Nordstrom added. “They plan vacations around it. Call in sick. It’s something that really resonates with customers.The challenge is for customers who don’t know us. But once a customer gets a taste and an understanding of what it is, there’s tremendous loyalty.”
“It’s hugely important to Nordstrom,” said a source familiar with the machinations of the event. “July might be bigger at Nordstrom than December. It’s that big.”
The Anniversary Sale dates back to the early Sixties with Nordstrom’s acquisition of Best Apparel, which had been running an “anniversary” sale since the mid-Forties. Nordstrom has made adaptations over the years such as extending the length of the sale and providing early access for cardholders. Also, this year it’s more about buy-now, wear-now items and less about clothes that customers put away in their closets for the fall. Last month, an online “sneak peek” was introduced allowing non-Nordstrom cardholders to view items in the sale during the early access period, but not allowing them to purchase until they sign up for the Nordstrom Rewards card.
“They are able to get really juicy brands to participate like Burberry and Kate Spade — and it would be a nice, brand-new Burberry shirt or a tie at a great deal, not worn-out clearance,” said the source. “It’s all Nordstrom stores. It’s online, and it keeps growing. It’s north of $1 billion….If you want to do business with Nordstrom, you want to participate in the Anniversary Sale. [Co-president] Pete Nordstrom leverages this thing quite a bit. It’s like a secret piece of ammunition that nobody else has caught on to.” Nordstrom would not comment on how much volume is generated by the sale.
“I know it sounds sick, but I actually went to two Nordstroms,” Perlman said, with the Bellevue, Wash., store not far east from the Seattle flagship, being the second. She said she rarely shopped the sale before. “I’m more into the savings than I was in my foolish-spending youth.” Among her Anniversary Sale purchases: Stuart Weitzman tall boots, priced at $399, and lifted to $650 after the sale, and Vince boyfriend trousers, priced $129.90, and $195 after the sale. “I’m a convert,” Perlman said. “I must have spent two grand.”