Direct-to-consumer brands key to Nordstrom’s assortment
As part of an ongoing strategy to avoid the fate of many others in the flagging department store segment, Nordstrom has been focusing on putting together an assortment of products that customers won’t find at other retailers by partnering with direct-to-consumer brands.
Nordstrom has broadened its assortment of brands like Allbirds, Everlane and Reformation, becoming what the retailer calls a “partner-of-choice,” according to Business Insider. The brands deliver higher profit margins and now represent 40 percent of Nordstrom’s revenue at its full-price stores with expectations of the number rising to 50 percent by 2020. Because of their uniqueness, Nordstrom has found that direct-to-consumer brands are less vulnerable to discounting than traditional brands.
Direct-to-consumer brands, available primarily online and through brick-and-mortar pop-ups or showrooms, have experienced increasing popularity as traffic has slowed at traditional department stores with more staid, predictable assortments. Because of this, Business Insider counts Nordstrom’s new focus on direct-to-consumer brand partnerships as a win-win, making the chain’s assortment more exciting for consumers and increasing the reach of each brand partner.
But such relationships raise the question as to whether direct-to-consumer brands appearing too frequently on a given retailer’s shelves may impact their perceived uniqueness — or, essentially, disqualify them as direct-to-consumer brands.
The family-owned luxury retailer has recently taken other steps as well to build a rapport with a new kind of customer. Earlier this year Nordstrom announced a pop-up partnership with streetwear brand Stadium Goods, a move indicating a desire to court a younger, non-traditional luxury shopper.
The company also began piloting a new store format, Nordstom Local, late last year that carries no inventory for sale. Store visitors consult with a personal stylist and try on clothing, then have the actual product delivered later. Earlier this month, Nordstrom announced the expansion of the Local concept with two new stores slated to open in the fall.
Nordstrom has also attempted to improve its consumer-facing technology through the acquisition of two startups, BevyUp and MessageYes earlier this year.
- Nordstrom is banking on Instagram-famous brands to avoid retail’s deadliest mistake – Business Insider
- Nordstrom tries a no-merchandise store – RetailWire
- Nordstrom opening more local stores without inventory – RetailWire
- Luxury fashion hunts hype beasts with high-end streetwear – RetailWire
- Will acquiring tech startups help Nordstrom boost its digital ops? – RetailWire
DISCUSSION QUESTIONS: Does being a “partner of choice” for many direct-to-consumer brands put Nordstrom in an advantageous position? Are there any downsides? Do brands that pride themselves on being direct-to-consumer run risks by appearing more frequently on retailers’ shelves?