NORDSTROM BANKS ON CREDIT OPTIONS
Byline: Denise Power
SEATTLE — Long known for its high level of customer service, Nordstrom is now looking to extend that reputation to financial services through its private label credit card and newly created savings bank.
The company recently upgraded the technology platform for its private label credit card and now offers a points-based reward program. Personalized gift cards bearing recipients’ names will be introduced this summer and a debit payment option may be offered later this year. Customers have received newly issued cards with added security features.
“Our primary goal is to engage more customers,” said Kevin Knight, chairman and chief executive officer of Nordstrom fsb, the Scottsdale, Ariz.-based federally chartered savings bank. The bank, which had previously operated as Nordstrom National Credit Bank, was converted to a savings institution in March, as reported.
“We think that the additional point of engagement allows us to provide more services than would occur in the store or over the Internet,” Knight said. “The federal savings bank charter is a fairly new tool for us. The new bank license allows us to broaden our offering of payment products.” For example, “Many consumers are active users of debit and we could offer that.
“We want to make the card more competitive to achieve our primary goal of more customers. Secondly, we know it increases store visits and store volume.”
Nordstrom upgraded the technology platform for its private label credit card through its processor, Total System Services of Columbus, Ga.
Unlike many retailers, Nordstrom’s overarching goal for the enhanced card program is not to increase incremental sales through targeted incentives that nudge consumers from one spending tier to a higher tier. The company shuns special offers that favor one customer over another based on demonstrated “loyalty.”
“‘Loyalty’ is not [a term] actively used at Nordstrom,” Knight said. “We are more focused on fulfilling customer needs and expectations, one customer at a time.
“We are probably a little less direct about measuring how many departments a customer shops, how many times and how many dollars. We want to invite everybody into our stores. We’re not looking at ways to ration service.”
Instead, Nordstrom will mine its customer database to better understand shopping patterns and identify gaps — those services or retail formats for which consumers may not be aware. For example, a customer in a modest spending segment may not know that the company has an off-price format, Nordstrom Rack, which offers clearance merchandise.
Knight said promotions will be targeted to the extent that they are appropriate and relevant to an individual based on preferences. Superfluous offers will be edited out.
“Our motivation is more about telling customers about things they’re interested in, not things they’re not,” he said, such as, “a steady customer in the men’s department won’t get information about women’s sportswear.”
Nordstrom currently offers the ability to apply for the card online at nordstrom.com.
“The next step,” said Knight, “is on-line billing and payments processing,” for added customer convenience. He did not indicate when the latter option will become available.