Nordstrom continues digital push with Trunk Club deal

Aug 05, 2014

Nordstrom is going digital in a big way and the latest evidence of that is the department store’s planned acquisition of Trunk Club, an online personalized fashion shopping service for men.

"What Trunk Club is doing in the personal styling space is a natural extension of our core business," said Erik Nordstrom, president of Nordstrom Direct, the company’s e-commerce division, in a statement. "This acquisition is reflective of how we want to move quickly to evolve with customers by finding more ways to deliver a great shopping experience. One of the pillars of our long-term growth strategy is to integrate the online and offline customer experience, and the personal styling space is a great example of how these two worlds are coming together. We view this investment as complementary to our own business and our efforts to better serve customers."

Trunk Club uses 250 personal stylists to develop one-to-one relationships with customers. The stylists pick clothing they think will work for their customers and ship it to them directly. Customers keep the items they like and return what they don’t for free. The service doesn’t charge a membership or subscription fee.

Nordstrom’s new acquisition offers everyday basic clothes as well as high-end suits and other men’s apparel. Customers can shop via their PCs, mobile devices or meet with Trunk Club stylists at showrooms in Chicago, Dallas and Washington, D.C. Another showroom is scheduled to open in Los Angeles this month.

"We have more than 1,500 talented personal stylists at Nordstrom as well — in our stores. This complimentary service is an important and successful volume driver for us that our customers appreciate," added Mr. Nordstrom. "What Trunk Club does adds to our service capabilities — we can learn from them about what they call ‘assisted commerce’ so we can continue to meet the evolving needs of customers."

According to a press release to announce the deal, Trunk Club will continue to operate as an independent business "while leveraging Nordstrom’s capabilities and resources to scale its business."

Nordstrom Direct has been on roll. The division’s sales jumped 33 percent during its first quarter, on top of a 25 percent increase last year. The flash sales site HauteLook achieved a 10.3 percent increase in sales during the first quarter following a 35 percent annual increase the year before.

During the second quarter, Nordstrom rolled out an e-commerce site for its popular Rack concept and released a mobile app that shares a platform with Hautelook, giving customers access to deals from each property.

What is your assessment of the moves made by Nordstrom Direct in recent years? What will the acquisition of Trunk Club mean for the division and the company?

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16 Comments on "Nordstrom continues digital push with Trunk Club deal"

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Nikki Baird

Personally, I really like the move. I liked the acquisition of HauteLook too. What I like about these deals is that while they each have unique niches—Trunk Show is for men only at the moment—they are expandable across all kinds of categories. Nordstrom has the advantage of scale and inventory to bring to the equation, and Trunk Show and HauteLook bring new business models of retailing that leverage digital in new ways; and prove out customer loyalty as a result.

Chris Petersen, PhD.

Nordstrom and Trunk Club have repeatedly touted:

“Customers keep the items they like and return what they don’t for FREE. The service does NOT charge a membership or subscription fee.”

The best things in life are never free. Assisted online selling involves a substantial cost; LABOR and related costs for the personal stylists. If there is no charge and everything is “FREE”, then the costs must be paid for by substantial margins built into the products.

As a male who hates shopping, I’m intrigued by the notion of having an online personal assistant do the legwork and send me stuff I can also return. The real question is whether the “sticker shock” of the prices for those clothes outweighs the value and convenience of a personal shopper.

The great thing about retail is that it is a true democracy where consumers get to vote everyday with their credit card. The votes will tell whether this is a passing novelty or a service that consumers value enough to pay premium prices.

Robert DiPietro

What a nice tuck-in acquisition (pun intended). I think Nordstrom Direct is heading in the right direction and also making it easier for the male consumer specifically. It is a terrific service to drive additional stickiness with the consumer and leverage across the Nordstrom brand. The savings in labor most likely more than offsets the shipping and return fees associated with the program.

Zel Bianco

It is a thoughtful strategic move. Most men hate to shop, and going to a department store is not high on the list. This will appeal to the busy man that will use any excuse to get help in this area.

Phil Rubin
3 years 1 month ago

This move is very consistent with the investments and stated goals that Nordstrom has for its Direct business. Further, it’s entirely on-strategy with the core foundation of Nordstrom’s business, and that is selling goods to customers with a high degree of service and value while minimizing customer risk, all the while being largely non-promotional.

Nordstrom is the clear leader in its category in the Direct business, and it will continue to be so with moves like this one.

Ryan Mathews

I’m a little wary of the economics, but I love the direction. We are rapidly moving toward a time when the retailer in effect will become the shopper. Moves like this one and a similar service being contemplated by Amazon are either a.) opening the door to a radical rethinking of retail in which the customer’s job is to approve and transact or b.) representing a digital version of the 19th century retail, where shop keepers knew their customers so well they pre-ordered inventory with them in mind.

Camille P. Schuster, PhD.

Nordstrom is known for personalized service. Acquiring a company that offers personalized, high-quality service seems like an excellent fit. Adding new customer experiences while keeping the core image of the company is a great way to move in new directions while staying true to its mission and strategy.

Kelly Tackett

This discussion loops back with the topic yesterday around service and convenience. By acquiring and scaling companies that are focused online, Nordstrom has added a convenience component while still adhering to its high standards of service.

These investments and acquisitions are a win-win for the online retailer and Nordstrom. The retailers benefit from knowledge sharing of best-in-class practices on everything from customer engagement to logistics.

Alan Lipson
Alan Lipson
3 years 1 month ago

Nordstrom’s acquisition of Trunk Club, along with the recent service provided by Ask Zappos, shows that retailers are clearly differentiating themselves from their competition. In today’s retailing, you can either be the vendor’s selling agent, or the consumer’s buying agent. Clearly both Nordstrom and Zappos have taken the latter perspective and are focusing on their consumers’ wants and needs.

By providing these types of solutions, retailers can learn more about their consumers and continue to evolve and provide consumers with new products and services, maybe even before their consumers know that they have a need for them.

Lee Kent

Being a person who used to use a personal shopper on a regular basis, I see this as a win-win. My personal shopper, Amber, got to where she knew everything in my closet. She knew that I liked to rework my favorite pieces into more current outfits by adding new accessories, etc. I simply gave her a call, told her what I was up to and when I arrived at the store, she had pulled a dressing room full for me.

This service did not cost anything extra and Amber knew I liked to tuck bargains into the mix to offset something more pricey.

The interesting thing to me is that I did all this before we had cameras on our phones and text messages. I can only image what a personal shopper could do today with all the wonderful new tools.

If Nordstrom can provide that level of service with their great name behind it, it’s a no-brainer.

And that’s my 2 cents!

Marge Laney
3 years 1 month ago

I like this a lot because this adds volume to both brands. The Trunk Club customer will now have access to Nordstrom brands in an online environment they are used to and have had success with. Nordstrom has new customers many of which they may never have had access to without Trunk Club.

I also see the Trunk Club customer as a prime target for BOPIS. The Trunk Club customer who has access to a Nordstrom store won’t need to wait for their selections, they will be able to pick them up on their schedule. In the store the customer can complete the try-on and complete the sale without the cost of returns and the wear-and-tear on the relationship. Win-win.

Naomi K. Shapiro
Naomi K. Shapiro
3 years 1 month ago

Nordstrom gets it right, again and again. Nordstrom does its homework, and leads the pack in innovation and use of the latest tools, technologies and trends. That’s why I wouldn’t worry about the costs/margin of free delivery and return. I’m sure they’ve thought about that, too, before embarking on this/these enterprise/enterprises. Note that Nordstrom also recently added displays of Blue Nile (jewelry) to some of their stores. Nordstrom is probably the best example you’ll find of differentiating, and continuing to blur and tighten the lines between channels to survive and thrive in the face of showrooming, webrooming and competing in general in today’s ever more challenging marketplace.

Mark Burr
3 years 1 month ago

My assessment is that additional “service” in what is already known as a “service” retailer (albeit pricey) isn’t necessarily a bad thing. I do however, think that Nordstrom has a mindset and definition of “service” in past tense.

Zappo’s can get me my favorite shoes to my doorstep the next morning without an overnight charge and without me even requesting expedited shipping!

Nordstrom delivered the last pair I ordered in 7 days. When asked, their response was, “Yes, we know others do that, but this is the best we can do.”

Possibly those wanting this type of attention are akin to an older style, unhurried shopper that doesn’t equate online with speed.

It is a great move towards personal attention. Nevertheless, with respect to online shopping as a whole, they are way behind other fashion retailers. Even Brooks Brothers, a similar tier retailer, delivered packages to my doorstep in two days without charge or fees for expediting.

They are still a top choice for a shoe purchase, but it will be when I am patient and had time to plan ahead.

Ed Rosenbaum

What a deal this is. Wow! A personal shopper online that is selecting and shipping to the male shopper. Count me in as one who dislikes shopping and would use this service if I had any idea what I want or need.

Roger Saunders
Nordstrom consistently listens to its customer, and positions that consumer at the center of the equation. Their Digital/e-commerce approach will only be enhanced with the purchase of Trunk Club, as the Nordstrom customer base is already there, waiting for them. Based on the Prosper Media Behaviors & Influence Study of 15,000+ Adults, 18+, 29.0% of Adults say they search online for Clothing prior to buying. Yet, 40.1% of Nordstrom customers search online first. When looking at Gen Y and Gen X, the story gets even better. One-half (50.0% of Nordstrom Gen X shoppers search online at the outset, and 53.5% of Millennial shoppers make use of search online before buying. The rate of research online is accelerating for Nordstrom shoppers. When asked if they have researched online for Clothing in the past 90 days, 39.0% of total respondents said that they had done so. An impressive 71.7% of Nordstrom Millennial shoppers said that they had researched online in the past 90 days for Apparel. And, 22.7% of those same Millennials indicated that they had done the same for Baby Apparel in that 90 day time frame. Nordstrom shoppers have embraced the digital device at a higher rate than the general… Read more »
Dan Frechtling

Lots of praise above for Nordstrom on being visionary and doing what’s right for its customers. I’m not quite as complimentary.

What would have been REALLY innovative would be Nordstrom’s internal incubation and launch of the very same idea. Instead, they are paying an undisclosed sum for a company that was turning into a competitor.

The combination of a personal shopper, web interface, and delivery method isn’t technically or logistically complex. In fact, all three are existing core assets of Nordstrom and Nordstrom Direct. It’s simply a matter of connecting the dots.

A Chicago startup built from scratch what Nordstrom already had, and Nordstrom gets to pay a premium for it. Compliments to Brian Spaly!


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