Nordstrom Doubling Down on Rack Concept
Nordstrom has increased the number of Rack format stores it operates over the past four years. Between now and the end of 2016, it plans to double its current number.
Part of the reason for Nordstrom’s push of the Rack concept is that it has found a way to open the discount outlets without cannibalizing its flagship store business. As discussed on RetailWire in March, Nordstrom opened one of its Rack stores a "crosswalk" away from its flagship in downtown Seattle.
According to company executives, the full-priced and discount outlet share a large percentage of customers. Geevy Thomas, president of Nordstrom Rack, said around 60 percent of his chain’s business shop in the flagship, as well.
Rack customers tend to skew younger than Nordstrom’s flagship stores overall.
"Over the next five to seven years, baby boomers will hit their peak spending potential," Jennifer Black, a retail analyst, told The Seattle Times. "As that happens, retailers want to attract a younger customer without alienating their core customer."
- Nordstrom Opens Outlet Next to Flagship – RetailWire
- Nordstrom to speed up Rack store openings – The Seattle Times
Discussion Questions: What do you think are the greatest consumer and operational factors behind the exponential growth of Nordstrom Rack? Is there any other retailer balancing its full price and discount outlet formats as well or better than Nordstrom?