Nordstrom has relaunched its Web site — the first major overhaul in 10 years — and is aiming to build on its culture of service.
This story first appeared in the August 23, 2010 issue of WWD. Subscribe Today.
As competitors put more emphasis on e-commerce, Nordstrom is trying to differentiate itself with improved navigation that makes it faster and simpler to shop, as well as more robust social networking and other features.
The revamp of nordstrom.com, unveiled on Saturday, spotlights improved visuals such as larger fashion photos and better backdrops and a cleaner look with just three tabs on the homepage. There’s a customer forum called “Conversation,” which includes a video of the Ruben Toledo shoot for Nordstrom’s designer catalogue, as well as Facebook and Twitter feeds.
“Our number-one goal is to improve service,” said Jamie Nordstrom, president of Nordstrom Direct. “It’s really tied to everything we do. We know the better service we give, the more [consumers] spend with us.”
Internet sales gains are far outpacing other retail channels, and stores are evolving their Web sites in an effort to sustain the momentum and stay competitive. ComScore Inc., which tracks the digital world, said overall online spending reached $32.9 billion in the second quarter, up 9 percent compared with a year ago, marking the third consecutive quarter of positive year-over-year growth.
“We have the luxury of being able to invest in our business,” Jamie Nordstrom said. “We are continuing to invest in new capabilities. We spent the last five years more on the back of the house. Going forward, it will be more about customer-facing initiatives.”
The store envisions an eventual rollout of local-focused features on the Web site, including videos of designer appearances, and conversations among customers, store managers and sales people on topics such as fashion trends or bestsellers. “We are going to be talking with customers in a more conversational way,” Jamie Nordstrom said.
The $8.26 billion Seattle-based upscale chain will test the Rack outlet division online “in a small way this fall,” he said. “It would be more about social networking and getting that customer engaged in the conversation and into the store. It would be very difficult to re-create Rack on the Web site. I’m not sure it would be a great customer experience.”
Nordstrom.com, launched in 1998, represents most of the $799 million volume generated in 2009 by Nordstrom Direct, which includes the catalogues. The retailer has attributed much of its strong recent results to its investments in systems and service features. Total comparable-store sales were up 12 percent in the first quarter and 8.4 percent in the second quarter of this year. Nordstrom Direct’s comps rose 38.7 percent in the first quarter and 34 percent in the second quarter. Nordstrom does not break out its online sales. Last year, Nordstrom Direct volume increased 14.5 percent, while overall, the company was down 5 percent.
For the last five years, Nordstrom has been pumping up its infrastructure and integrating store and online systems. In 2007, the retailer doubled the size of its fulfillment center in Cedar Rapids, Iowa, to 600,000 square feet. The next year, Nordstrom finished integrating back-end systems creating a single view of all inventory, and in 2009, stores were given the ability to fulfill orders taken from the Web site.
For example, if an item is not available online in a certain size, style or color, Nordstrom can comb its stores for the item and ship from a store to the customer. The reverse is also true: Stores can access the online inventory if a customer requests an item that’s not on the premises. Nordstrom also gives shoppers the option of picking up in a store what was purchased online. In June, the chain, began shipping seven days a week.
The goal is to improve the flow of merchandise, refresh the assortments faster and ultimately strengthen its service reputation.
On the multichannel initiatives, “We have made a lot of improvement over the last five years,” Jamie Nordstrom said. “Our positioning relative to competitors is very favorable, but there is no finish line on this, considering the rate that retail is changing with mobile marketing and social networking….A lot of it falls into the mobile subject, particularly how customers are going to use mobile devices to shop. There won’t be credit cards in the future.
“However this business evolves is going to be driven by what the customer wants and how she wants to shop,” he said.