Photo: Nordstrom
Has Nordstrom lost its customer experience edge?
Nordstrom may be in a better position than some of its other department store peers, but the chain has openly admitted the challenges it faces, and some might surprise you.
In a recent interview with the Los Angeles Times, co-president Erik Nordstrom cited the need for the company to improve its customer experience and product offerings. For those familiar with Nordstrom’s nearly legendary reputation for service, this may seem odd, but Mr. Nordstrom insists improvements are necessary as the chain seeks to give its customers “a compelling reason” to visit its stores at a time when mall traffic has fallen off in many locations.
The chain has taken steps in recent years to make it easier and more enjoyable to shop. In May, it launched a rewards program to allow customers without a Nordstrom card to earn points. More recently, Nordstrom announced it had partnered with Tesla to allow the electric car company to open a boutique inside one of its stores in Los Angeles.
Mr. Nordstrom admitted that the chain has taken a hit as more apparel sales have moved online. While Nordstrom has made significant investments in its digital and omnichannel capabilities, he told the LA Times that the company was not fully prepared for the speed with which consumers are shifting their purchases online.
Nordstrom is receiving greater attention as it moves closer to its next quarterly earnings report. The chain is also in the midst of its annual anniversary sale, which began last week and runs through Aug. 8.
In addressing the product part of the equation, Nordstrom announced the addition of new clothing brands and accessories for the sales event, including Alexander Wang, Alex and Ani, Alice + Olivia, Allsaints, Burberry (kids), Cupcakes and Cashmere, Current/Elliott, Illesteva, Madewell, Mara Hoffman, Marc Jacobs, Peek, rag & bone and The Honest Company.
Yesterday, Nordstrom announced it was expanding distribution of J. Crew’s Madewell brand to 20 more stores this fall. The department store has an exclusive deal with Madewell, which can only be found in Nordstrom or under its own banner.
- Why have upscale retailer Nordstrom and other apparel giants lost their luster? – Los Angeles Times (tiered sub.)
- Nordstrom Anniversary Sale Starts Today! #NSALE – Nordstrom, Inc.
- Nordstrom Reports First Quarter 2016 Earnings – Nordstrom, Inc.
- Nordstrom Expands Madewell Partnership to 20 Additional Stores This Fall – Nordstrom, Inc.
- Nordstrom expands rewards to non-cardholders – RetailWire
- Will luxury shoppers buy electric cars at Nordstrom? – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: Do you see customer experience as a major area in need of improvement at Nordstrom? What other factors do you think the chain must address to return to the strong results it has been long known for?
Poll
BrainTrust
Paula Rosenblum
Co-founder, RSR Research
Ryan Mathews
Founder, CEO, Black Monk Consulting
I think Nordstrom is becoming a victim of its own mass. I think it over-expanded and just has too many doors. The good news is, 20 percent of its sales come from online. The bad news is that store growth is flat. I look at Miami Metro, where Nordstrom has three major stores. It really only needed two. I’m sure this is replicated other places. So it may partly be the customer experience, it may be that some of its customers are aging out, but it’s also simply that it just has too many stores.
While it’s always important to better the customer service experience, this is not what’s hurting Nordstrom. It’s selection and perceived value. My wife has been a dedicated, loyal Nordstrom customer most of her life. Recently she has bemoaned that the store has few items that interest her. When she mentioned this to her friends, they wholeheartedly agreed. Has Nordstrom lost sight of its essential brand message? I’ve been to the Nordstrom store in The Grove and have seen the Tesla display. It’s a great place for children to play, but no serious consumer is going to shop for a Tesla here. Nordstrom needs to reexamine why it exists, its target demographic(s) and its brand proposition vis-a-vis its competitors. It’s time for back-to-basics, not adding Teslas to its stores.
Agreed about merchandise selection. Most guys who can afford their shirts aren’t looking for the “trim” or “trimmest” fit.
Yes. After I wrote this blog Hey Retailers! Nordstrom’s Customer Service Problems Are Yours Too, I had a conversation with an executive there who agreed they needed to own the customer experience. It is subpar in every location.
Just because someone wrote a book about them generations ago doesn’t mean they can rest on their laurels. Yet that’s what’s happened. The long solution is to fix a culture where “Can I help you” has replaced creating relationships.
Customer understanding is a mandatory prerequisite to creating outstanding customer experience and times — and shoppers — are changing. Frankly, it’s just hard to give superlative service when you act like your customers ought to live up to your notion of correct retail behaviors.
For example, I love to “dress down” when shopping at Nordstrom. It guarantees me I’ll get flooded with security scrutiny in the form of service overkill. But is it really service?
Not so much. It always feels more like I have two sales associates shadowing me to make sure I’m not making off with a pile of dress shirts.
I’ve watched potential customers walk away in frustration when they can’t pay for their purchases with certain credit or debit cards. And, more alarmingly, I’ve seen hundreds of shoppers cut through the store en route to another destination without even looking around.
I’m sure Nordstrom has an excellent handle on its existing customers, but, the again, so did A&P. There is a danger in projecting past success forward as a metric.
If I were them I’d look a lot harder at why their own shoppers are increasingly preferring to buy online and adjust my service models accordingly.
There is a big difference between the word improvement and enhancement. I don’t believe that Nordstrom is slipping in the customer service area. They have always been a leader, but the gap between them and the competition is narrowing. Therefore some enhancements to keep them ahead of the curve are what is needed. What can Nordstrom do to further enhance the CX? What can they do to stay ahead of the pack? The answers to those questions will keep Nordstrom ahead of their competition.
Nordstrom is in the same boat as all retailers today, with brick-and-mortar stores losing sales and online growing. Solutions to the problem are definitely going to hurt their bottom line for quite some time, so here is what I think they need to do.
This strategy goes for all high-end retailers, and to me no one is immune from the expectations of lower prices plus top notch service, which is a hard pill to swallow as the associates who once made good money on commissions will likely see their paychecks drop.
Nordstrom has not lost it strong customer-centric focus. Mr. Nordstrom realizes that if the store is going to compete in today’s changing world of retailing it is going to need to up the bar.
When I read this story I thought back to a statement that Lee Smith, past CEO of Walmart, made a number of years ago when asked how he would rate Walmart as a retailer on a scale of 1 to 10. His rating was only a six. We will always be striving to get better.
I agree with Paula. How special is a place if there is more than one?
This is afflicting all stores as documented by many sources. Specialty retail is no longer special either. Was it ever? Shifting a staff from FTEs to temps delivered the payroll budget, but the experience of shopping in a flagship versus a mall store was regrettably obvious.
Scarcity matters. Creeping meatballism was coined right about when Levittown was built. Suburban sprawl was mass production. Suburban malls were part of the output. Then, luxury expansion in the U.S. was NYC then SF and maybe Chicago. While in Seattle visiting Nordstrom was better than when in Orland Park, Oak Brook or Schaumburg.
But that was before they became publicly traded and the demand for comps drove following the herd. Woodfield was Sears (Gen Wood) and Marshall Field.
So how does a publicly traded company unpack the biz? Hire Ron Johnson?
Not snarky, reality. How do you adjust The Street’s expectations at a time when there is little growth? How does a retailer right-size its revenue? How do you get off the “high-low” promotional junk that all decry? How do you shutter two of three stores in Miami?
Or as we like to say, “retail ain’t for sissies!”
First off, I want to clear something up. Customer experience is not the same as customer service. Yes, they go hand in hand, but they are not the same things.
Nordstrom has been known for their excellent customer service and I don’t think that has fallen at all. Customer experience, on the other hand, is something that has only recently been talked about. How the customer experiences the brand and their shopping journey.
I’ve always loved Nordstrom but hey, I’m a boomer and let’s face it, many of us boomers are often not shopping for ourselves. So how would a non-boomer experience Nordstrom? It hasn’t changed in years. I walk into my nearby store and everything is the same. Even the displays and mannequins are pretty much in the same spots.
A few little changes have taken place in serving the customer. Like in the shoe department, they can tell me if they have my shoe pretty much right away. But, they have to walk over to the register to do that. The staff is helpful and nice however everything is just so same old, same old. Emphasizing the word old.
Now walk into Anthropologie. It is instantly inviting and in intriguing. It’s vibrant. It’s current. The staff is busy, usually has their hands full of clothes, but they always stop and ask if they can help. They aren’t just standing around.
I know that’s just one story and customer experience execution can and should take many forms, but when I thought about Nordstrom today, this is what came to mind.
But that’s just my 2 cents.
The first sentence George wrote — “some of its other department store peers” — gives me pause. Nordstrom doesn’t call itself a “department store,” and indeed from a functional point of view it’s probably much closer to specialty retailers like Saks, Neiman’s, Lord &Taylor … even Barneys, than it is to Macy’s or JCP. This is an important distinction, because it means both a lower exposure to disruptive influences like fast fashion, and a fewer fallback options when core departments suffer (there’s no talk of bringing in appliances or a new line of sheets).
And I would have to think they’ve been hurt — and will continue to be hurt — by long-term changes in fashion (how many men wear suits compared to 30, 20 or even 10 years ago?). They will need to play up their service angle — probably their greatest strength — but I don’t have any great confidence that (even) that will be enough to return it to “strong results it has been long known for.”
Nordstrom is Nordstrom. What they might think is a concern with the customer experience, most of their competition would see as fantastic.
My wife and I are trying to buy a car. If you want to see what non existent customer experience looks like, you should try this when you have enough time to get frustrated and upset.
When Nordstrom first came East there was much discussion about how their wonderful customer service would transform Easterners’ expectations. Of course that wouldn’t be sufficient to sustain a retailer. However, it was a serious point of difference as sales staff in other stores were perceived less engaged with shoppers allowing for more dissatisfaction.
Online shopping has changed the dynamics and customer expectations for an in-store experience. It’s no wonder that Nordstrom has to reassess its plans for the future. But what took them so long?