The Seattle-based Nordstrom, and Fanatics, the Jacksonville, Fla.-based provider of licensed sports apparel, accessories and equipment, revealed the deal this morning.
Nordstrom.com is now offering a significant portion of Fanatics’ array of professional and college sports team merchandise from NASCAR, PGA, NFL, NCAA, NBA, MLB and other leagues. The selection includes men’s, women’s and kids apparel and accessories under the Fanatics label and brands such as Nike, Adidas and Mitchell & Ness that work with Fanatics to sell apparel products bearing team logos, emblems and numbers worn by athletes on their uniforms.
Nordstrom will power the front-end digital customer experience, meaning customers view and order products on nordstrom.com. The orders get fulfilled and shipped by Fanatics. At least initially, it’s purely a drop shipping arrangement; no wholesaling is involved and only nordstrom.com will carry the products, not any of the Nordstrom stores. Down the road, it’s possible Nordstrom brings its Fanatics assortment to Nordstrom stores and possibly rack.com. It’s the kind of a partnership that’s quicker to start up online, and Nordstrom did it in time for holiday gifting this year.
Fanatics will make championship products and other real-time items available on nordstrom.com that are designed and manufactured on-demand through Fanatics vertically integrated supply chain. For example, after the last out in the last game of a World Series, or after the last second of a Super Bowl, shoppers will be able to immediately order merchandise bearing the graphics of the championship team, and receive their orders within a normal delivery period.
“A lot of people are saying ‘why are we doing this?’ It’s consistent with who we are as a company,” Teri Bariquit, chief merchandising officer at Nordstrom, told WWD. “Our proposition starts with the customer.
“In our conversations on how to serve customers more, Shea Jensen, our general merchandise manager for women’s and men’s apparel, said she consistently hears from friends and family that they’re college sports fanatics, if you will, and that they shop Nordstrom but when they want that sports jersey, they had to go somewhere else. We can now meet the needs of sports enthusiasts and the people who shop for them,” said Bariquit.
The deal with Fanatics, Bariquit added, “was born out of that idea of how we help customers find more of what they are looking for, from their favorite multibrand retailer. Fanatics offers a category for us we pretty much avoided, and yet there are a lot of customers in our ecosystem who buy sports jerseys. So it just made a lot of sense to say, ‘let’s widen that aperture.'”
With Nordstrom, “It’s a customer profile and group of fans that have not seen our products before,” said Jack Boyle, Fanatics’ global co- president, direct-to-consumer. “Nordstrom has never before had a licensed sports offering.”
The $3 billion Fanatics has similar arrangements with Walmart, Kohl’s, Amazon, and as of a month ago, Macy’s, though Nordstrom is the most upscale retail partner for Fanatics.
“Each deal is different in terms of what products are available,” said Boyle. “Nordstrom is going to have our best-selling items, like an NFL jersey, or a sideline hat, as would Kohl’s and Macy’s, but with Nordstrom we are overindexing fashion-forward products we have with brands such as Vineyard Vines, Peter Millar, Pro Standard and Wear by Erin Andrews.”
The new partnership reflects Nordstrom’s ambitious “Closer to You” agenda, unveiled in February 2021. It involves adding lower price offerings into the Nordstrom Rack off-price matrix; extending the reach of its three-year-old market strategy of integrating full-line stores, Nordstrom Rack and Nordstrom Local to increase services, conveniences and merchandise choices, and massively expanding the digital assortment from 300,000 items to potentially 1.5 million within three to five years. To reach the digital goal, Nordstrom is establishing new arrangements with brands and doing more drop shipping, and even taking financial stakes in brands, like it did with Asos, which owns the Topshop and Topman labels.
“We are exactly on track to meet the goal,” said Bariquit. “We have grown our selection over 30 percent from a year ago, and probably closer to 40 percent over 2019. We have grown our selection tremendously.”
Home products, including smaller electronics and smaller furniture and some active areas like golf shoes, tennis racquets and outdoor gear are among the opportunities Nordstrom sees for further expanding its dot-com business. “We are continuing to explore brands that are both retailers and brands. That is typically where there are more drop ship opportunities,” said Bariquit. “We just launched & Other Stories, a subsidiary of H&M. We’re learning. That is starting out as a wholesale model, but there could be opportunities to expand.”
With many brands on Nordstrom’s matrix, including Adidas, Nike, Natori, Nic + Zoe, Ray-Ban, Luxottica, Vince and Ralph Lauren, the company does engage in some drop shipping but the relationship has always been first established through traditional wholesaling.
“We have tons of brands that we do drop ship with but it’s a small subset” of Nordstrom’s business,” said Bariquit. “Really the drop shipping is about extending colors and sizes or some items that we didn’t buy. We have had drop ship programs for over 10 years.”
With Fanatics, “This is the first time we are starting with drop ship 100 percent, and then with Fanatics we might curate for wholesale down the road or through some other model.”
Editing the vast Fanatics assortment would seem a different challenge from editing a designer collection. “I believe Fanatics has 300,000 choices. We are not starting out with 300,000 choices. We are starting out with about 10,000,” said Bariquit. “We worked closely with Fanatics to pare down and decide what makes the most sense for us. Ten thousand choices, that’s still a big amount to launch all together. But we are not going to have customers experience all the choices all at once. We are looking at ways to personalize what customers see by local market areas. Certainly they will be able to search beyond that.”
Bariquit said the deal is a win win. “Fanatics gets exposure to more customers. Our customers get more exposure to product. It’s all incremental for us. You are not going to buy a Knicks jersey instead of a Hugo Boss sweater.”
With Fanatics, “We will be learning about a really big company with expanded choices in a category we haven’t played in, with a different model, and what it [requires] on the back end, from a technology and operational standpoint.”
Asked if bringing on product with more of a mass appeal potentially dilutes Nordstrom’s elevated fashion image, Bariquit replied: “We really have to think about our core customer — that upscale fashion core customer — and for what reasons they are leaving us [for other stores] and what they would need so they stay with us. That could be in a space like cookware. We have been offering more cookware of late and customers are delighted with that. So it’s really important that the brands or vertical retailers we choose to partner with, that they still feel curated to who we are.”
It’s also important, said Nordstrom’s top merchant, that with brands and partners brought into nordstrom.com’s expanded offering, personalization is part of the formula, “so customers on our site and app feel [a sense of] discovery and inspiration and not like they’re going to shop 1.5 million choices.”
Along with merchandise, the Fanatics digital sports platform has non-fungible tokens, sports betting and gaming, trading cards, and equipment, though nordstrom.com will, at the outset at least, sell only Fanatics apparel and accessories. Fanatics is the exclusive provider of licensed sports merchandise to Nordstrom. Fanatics also operates stores and kiosks in stadiums and arenas, online stores for college and professional teams and leagues in the U.S. and abroad, and has its own e-commerce website.
“We are thinking eight days a week how we can expand the licensed sports industry and reach new customers,” said Boyle.
Asked what’s hot in terms of product sales, Boyle replied, “Clearly all things Atlanta Braves.” Braves fans are still celebrating their first World Series title since 1995, Boyle noted.
The NFL business, the Salute to Service fan gear line which honors the armed forces, and headwear are also strong selling categories, Boyle said, adding, “The women’s business in licensed sports is traditionally underserved, but women’s fan gear is really strong. It’s worn seven days a week.”