Is Nordstrom smart to bring Trunk Club’s fulfillment in-house?
Since Trunk Club’s founding in 2009 (Nordstrom acquired it in 2014), the online personal shopper site has handled most of its own fulfillment. That will change next month when Nordstrom closes the site’s Goose Island fulfillment center in Chicago and begins shipping orders from its warehouses in California, Iowa and Pennsylvania. The facility in Iowa already handles fulfillment for Trunk Club for Women.
“While our space at Goose Island has served us well, we realize we’re going to outgrow it soon,” said Brian Spaly, chief executive officer of Trunk Club, in a statement. “We decided this was the right time to integrate Trunk Club orders into the Nordstrom fulfillment network, which will allow us to share more of their inventory and better serve our customers with a wider mix of merchandise.”
The decision to integrate Trunk Club’s fulfillment with the rest of Nordstrom’s e-commerce operations may make logistical sense, but it is also part of a larger company effort to reduce costs. The chain, which has invested heavily in omnichannel initiatives, has been looking to cut costs in the face of a sales slowdown that hit the chain last year. While Nordstrom says e-commerce accounts for roughly 20 percent of its total sales (as reported by PYMNTS.com), the rate of growth has slowed to around 10 percent, lower than the average for all retailers selling goods online nationwide.
The closing of Trunk Club’s fulfillment center will affect 250 full- and part-time workers. Nordstrom has said it is seeking to find work for those who wish to continue with the company at Trunk Club’s store in Chicago as well as at its nearby department store and Rack locations.
“It will take us some time to transition our operations and ensure we’re taking care of impacted employees, so we wanted to let our people know as soon as we could,” said Mr. Spaly. “We still have a lot of customers to serve here, and we’ll be working with each of our employees over the coming months to share more details about our staffing changes and to discuss their individual opportunities.”
- Trunk Club To Close Goose Island Facility, Integrate Operations Into Nordstrom Fulfillment Network – Nordstrom
- Why Nordstrom Is Embracing Change – PYMNTS.com
- Nordstrom continues digital push with Trunk Club deal – RetailWire
- Guys join the ‘get out of shopping’ club – RetailWire
DISCUSSION QUESTIONS: Do you see Nordstrom’s decision to integrate Trunk Club into the overall company’s fulfillment system as a positive or a negative for the e-commerce site and its customers? Does this change give you a sense that Nordstrom has a handle on how to cut costs without negatively affecting its reputation for customer service?