Nordstrom Essay

The Competitive Online Retail Environment
Consumer purchasing decisions and behavior is continuing to change, not just in the U.S. but worldwide, shifting more away from the department store and onto the web. In such a changing environment, customer relationship management (CRM) becomes more important than ever, especially to a company such as Nordstrom who is the gold standard of customer service, the measuring stick by which other companies measure themselves (Spector & McCarthy, n.d.). The key for Nordstrom will be to adapt their traditional core strength, intimate and personalized customer service, to this new environment.
“The retail landscape has shifted toward e-commerce, but there are opportunities for department stores to capitalize

on this,” says Claes Fornell, ACSI founder and Chairman. “Stores will remain relevant to the extent that they can integrate online shopping with brick-and-mortar operations, combining the convenience of online shopping with the benefit of personal service (Fornell, 2017).”
Trends in the Current Retail Environment: E-Commerce
E-commerce sales increased 16% in 2017, the highest growth rate since 2011, and accounted for 13% of total U.S.

retail sales in the same year. Even more striking, is that E-commerce sales represented roughly 49.4% of all retail sales growth (Zaroban, Enright, & Demery, 2018). This strong growth in E-commerce sales is putting pressure on successful traditional brick and more retailers, such as Nordstrom, to keep pace in order to retain market share.
Product Categories
According to an online consumer report published by KPMG, men’s and women’s apparel, cosmetics, and accessories are among the top ten online consumer purchases with steady growth projected in each category (The Truth About Online Consumers, 2017).
Generational Trends, Lifestyle, Affluence
Despite the assumption that the tech savvy Millenials are driving the upswing in online shopping, Generation X consumers actually lead the way, making 20% more online purchases then their younger counterparts (The Truth About Online Consumers, 2017). Millenials are, however, still leading the way in use of digital communication technologies, mainly social media, albeit by a small margin. According to data from Pew Research Center, as of 2018, 85% of Millenials and 75% of Genration Xers use some form of social media (Jiang,

2018).
Nordstrom and the E-commerce Environment: Maintaining CRM
Despite the enormous success of Amazon, and other E-Commerce focused retailers, Nordstrom has done well in this arena over the past few decades steadily increasing online sales and even outpacing sales growth in its physical stores. According to an article in Fortune Magazine, Nordstrom’s big investments in e-commerce in the last two decades have paid off handsomely, making the upscale department store a leader in the digital realm among brick-and-mortar retailers. Nordstrom now garners 26% of company sales online, strong enough to buoy the overall company to growth (Wahba, 2017).
Early Online Adopter
Nordstrom was one of the earliest entrants to e-commerce, launching its full-price online shopping site in 1998 and continuing to innovate at a fast clip. It bought flash sale site HauteLook in 2011 for $180 million, marking the first time a traditional retailer acquired a company focused on online private sales (Sinclair, 2017).
Maintaining Customer Service Focus
Nordstrom has focused on maintaining its dedication to exceptional customer service and shopping experience in the online environment which has led to its ability to outpace its main competitors Macy’s, Kohls, and JC Penny in E-Commerce driven sales and has been shown as the key to its overall sales growth. Nordstrom currently offers one of the better online experiences in retail with a no-minimum for free shipping policy, as well as additional conveniences including a ‘text to buy’ app, tag and credit card scanning, in-store pick-up, and text notifications (Sinclair, 2017). All direct sales come with free FedEx return labels, so consumers can exchange their goods quickly without expense (Spector & McCarthy, n.d.).
Blending Online and In-Store Retail
One of Nordstrom’s most appealing online and in-store offerings is its stylists.

This unique offering allows the consumer access to expert advice on fashion, beauty, weddings, and more through electronic correspondence. The Company even offers a personal shopping assistant via video conferencing providing assistance and personal guidance through the sales process (Spector & McCarthy, n.d.). It is an ultimate shopping convenience not offered, or able to be offered, by online only retailers.
Shoppers nationwide can easily use Reserve Online & Try In Store through the Nordstrom mobile app by selecting "Reserve Online & Try In Store" from the product detail page of the items they'd like to try on. Customers will then receive a text notification when their items have been found at their nearest store and are ready to try on, as well as a text notification when they get to the store letting them know where they can find the dedicated dressing room with their name and selected items (Nordstrom,

2017).
Improving Operational Strategies
Nordstrom is also improving its success in the online retail arena through implementation of new digital and operational strategies. Ship-from-store, a fulfillment process where retailers use stock from their store's estate to fulfill orders, has helped Nordstrom to evolve and avoid stagnation and has helped them survive digital disruption and remain competitive with e-commerce giants like Amazon (Intelligence, 2017).
Recommendations
Nordstrom has continued to lead the way amongst its competitors in its ability to provide the retail consumer with the ideal shopping environment in both its physical stores and online platform. They have done this by providing ease of use, convenience, options, and above all outstanding customer service.
The company must continue the course it has set, blending the online and physical shopping experiences, giving the consumer the ultimate flexibility, while still focusing on the personal service it has been famous for. The consumer who shops at Nordstrom is typically willing to pay a slightly higher price for this flexibility and personalized service and places a high priority on the ability to be intimately connected with a real person when, and IF they want.
Nordstrom has done an outstanding job thus far in walking the thin line between flexibility, convenience, and personalized service. They must continue to maintain this personal relationship with their customers, despite the changing environment, as it has been the cornerstone to their success.
References
Fornell, A. (2017, February 28). ACSI: Retailers Improve Customer Satisfaction Amid Store Closings. Retrieved from http://www.theacsi.org/news-and-resources/press-releases/press-2017/press-release-retail-2016
Intelligence, B. I. (2017, February 27). Nordstrom's Impressive Online Sales. Retrieved from http://www.businessinsider.com/nordstroms-impressive-online-sales-2017-2
Jiang, J. (2018, May 02). Millennials stand out for their technology use, but older generations also embrace digital life. Retrieved from http://www.pewresearch.org/fact-tank/2018/05/02/millennials-stand-out-for-their-technology-use-but-older-generations-also-embrace-digital-life/
Laja, P., Kojo, D., Mason, T., McShane, C., & Sapna, Y. (2017, August 11). Purchase Decisions: 9 Things to Know About Influencing Customers. Retrieved from https://conversionxl.com/blog/9-things-to-know-about-influencing-purchasing-decisions/
Nordstrom. (2017, August 24). Nordstrom Expands Reserve Online & Try In Store Service To About 40 Stores [Press release]. Retrieved from https://www.prnewswire.com/news-releases/nordstrom-expands-reserve-online--try-in-store-service-to-about-40-stores-300509247.html
Sinclair, N. (2017, August 12). Why Nordstrom is Beating all of its Department Store Competitors. Retrieved from https://finance.yahoo.com/news/nordstrom-beating-department-store-competitors-125704786.html
Spector, R., & McCarthy, P. (n.d.). America's #1 in Customer Service. In Summary Review and Analysis of Spector and McCarthy's Book The Nordstrom Way (p. 3). Business Book Summaries. (Original work published 2014)
Sterling, G. (2016, June 30). Survey: Amazon beats Google as starting point for product search. Retrieved from https://searchengineland.com/survey-amazon-beats-google-starting-point-product-search-252980
Surprising and Enduring CRM Trends from 2017. (2017, December 21). Retrieved from https://www.customer.com/blog/retail-marketing/surprising-crm-trends/
The Truth About Online Consumers (Rep. No. 201701TW-G). (2017, February).
Wahba, P. (2017, October 24). Nordstrom Thinks Half Its Business Could Be Online Within 5 Years. Retrieved from http://fortune.com/2017/10/24/nordstrom-online/
Zaroban, S., Enright, A., & Demery, P. (2018, February 16). U.S. e-commerce sales grow 16.0% in 2017. Retrieved from https://www.digitalcommerce360.com/article/us-ecommerce-sales/