For Nordstrom Inc., there’s a bigger future in localization and personalization.
The vision was spelled out by Scott Meden, Nordstrom’s executive vice president and chief marketing officer, at the forum, where he revealed that Nordstrom overhauled its loyalty program, renamed it the Nordy Club, and emphasized that personalization is at its core. Nordy Club launches next month.
“Our current program, Nordstrom Rewards, is a really strong program, with 10 million active members, a third of our customer base. It drives over 50 percent of our sales.” But with Nordy Club, “We have layered on things that are more experiential and personalized. Part of that is technology and re-platforming that, and data analytics and how we can leverage that.
“We have rethought the program from end-to-end, gave it a new name, and have levels that are renamed as well. We are trying to get across this experiential and personalized program that hopefully, in a compelling way, brings the best of Nordstrom to our most loyal customers,” he said.
Nordy Club’s benefits include three points per dollar for purchases at Nordstrom, a 50 percent increase in earn rate, and members paying with cash or a non-Nordstrom card will receive one point for every dollar spent. There’s also early access to sales such as the “Clear the Rack” off-price clearance or possibly to “pop-ins,” which is Nordstrom’s innovative pop-up format housed inside eight full-line stores, as well as invitations to events such as beauty and style workshops. There is also the “Nordy Portrait,” where members can get illustrated portraits of themselves and an integrated dashboard so customers can easily see their status and point balance. The idea is to extend offers and invitations in a discriminating, personalized manner so customers are notified of what’s most relevant to them.
“The real key is not everybody wants to be inundated with every last thing that we are doing. So how do we personalize it?” Meden said.
Nordstrom employees and shoppers loyal to Nordstrom are often referred to as “Nordies.”
In outlining Nordstrom’s priorities, Meden said, “We have spent time, energy and dollars around our site experience, our data capabilities, our technology, and that’s all coming to light. But probably the best way to describe it is our local strategy. We are really looking at it through the customer lens and how the customer shops today.…We don’t think about shopping in channels. We are moving pretty seamlessly from digital to physical and back. We have been building on a number of things — service elements, experiential elements. If you pull it all together in a market, we really think we can have a differentiated offer that no one can duplicate.”
Nordstom’s local market strategy includes Nordstrom Local service stations or “neighborhood hubs.” The first Nordstrom Local opened on Melrose Avenue in Los Angeles; two others are set, for Brentwood and downtown Los Angeles. Nordstrom Local offers curbside pickups, online ordering, returns, alterations, consultations with stylists, and even a glass of wine.
Nordstrom Local could open in Manhattan, after Nordstrom’s women’s flagship opens on 57th Street and Broadway next year. “There’s nothing to announce,” Meden said, though he added, “If you think about the idea of Nordstrom Local being a convenience location, absolutely Manhattan makes sense for that.”
During the session, Meden responded to several questions, including the below:
• On the average age of Nordstrom shoppers: “The average age has gone down and it’s been intentional. The average age is 42, it’s younger in the Rack, and the average age of our shoppers is lower than any of our competitors.”
• On building brand partnerships for greater exclusivity: “We are focused on what we do to have a differentiated product mix that’s really compelling to customers. Customers are looking for a journey of discovery. They’re looking for something new. We need to have a group of brands that are strategic partners,” such as Madewell and Allbirds, which Nordstrom has established partnerships with. “Some are emerging brands, a lot are brands born on the web. Designer brands are also key strategic partners and we have our own private brands. You mix all that together and we have our strategic brands. It’s 40 percent of the business, and we expect it to go to over 50 percent by 2020.”
• On Nordstrom’s Anniversary Sale: “You have a limited offer, new product, current season. It’s not a clearance end-of-season sale. That’s why the event is so strong. When you have a limited quantity in a limited time, customers want to make sure they get that product.”
• On HauteLook’s flash-sale format: “The flash sale is still a relevant part of our business. Customers like the whole idea of private sale and limited-time offering is still really compelling.” HauteLook is owned by Nordstrom.
• On the women’s flagship in Manhattan, scheduled to open in the fall of 2019: “Literally, when I started at Nordstrom in 1985, within a year we started talking about whether we could be in Manhattan, what location, could we find the right spot. It’s been 30 years of considering Manhattan, and knowing that at some point, we really wanted to be here. It’s not easy to find the right location. We think we have a fantastic location, 57th Street and Broadway. Manhattan has fantastic retail, you can say the last thing Manhattan needs is another store, but we hope we are bringing something, from the range of product that we carry to the service experience that we offer, we feel is differentiated. We know the bar is high.”