Nordstrom Going Global
Nordstrom
is known for fashion selections and customer service that are among
the best in U.S. retailing. Now, the retailer is looking to bring those
things that make it special to American consumers to shoppers in 30
other countries across the globe. The company, however, is not building
stores to achieve its goal. It is going online.
“We
are excited about this opportunity to better serve our customers
internationally,” said Jamie Nordstrom,
president of Nordstrom Direct, in a press release. “We’ve made it
a lot easier for our customers abroad to shop from nordstrom.com.
Sending great fashion merchandise from Nordstrom to friends and family
overseas is also more convenient than ever for our domestic customers.
We will continue looking for ways to improve the shopping experience
for customers, no matter where they live.”
Shoppers,
both here in the U.S. and elsewhere, who place orders through the Nordstrom
International Shopping site have
the option of shipping to another country and paying in U.S. dollars
or other currency. When shoppers check out, they are given an estimated
time of delivery with a global tracking number. Shipments come with
a guaranteed exchange rate when the order is placed and they include
all international duties, taxes and delivery.
Discussion
Questions: What do you think of Nordstrom’s approach to global expansion?
Will the chain be able to maintain those elements that make shopping
its stores special? Will we see others follow suit?
This is a tricky one. On the downside, Nordstrom doesn’t have a strong private-label brand, so it’s not like customers will be buying something they can’t get elsewhere.
On the plus side, in an era when the dollar is cheap, allowing customers to pay in their own currency might make a built-in discount and drive some business.
Nordstrom is a great brand, and yet I worry the company is over-expanding–even in the US. Markets are not infinite. They never were, and they sure as heck aren’t now.
Very iffy idea. Nordstrom’s specialty, at least in the past, was close personal service–which shirt and tie goes with which suit, which necklace and earrings for that cocktail party at Buffy’s. That’s not the kind of service they can develop online.
Besides that, Nordstrom is only selling brand names that are available at other upscale retailers. So, what sets them apart?
Retail law #1 – go where there are customers.
As we’ve discussed a while ago, the American quasi-luxury market that drove Nordstrom to such heights over the last decade or so has taken a terrible beating. Nordstrom has, up until October, seen consistent revenue drops of over 20%/month.
The response of main-stream department stores like Macy’s has been to basically move to a self-service model to lower expenses. This is not an option for Nordstrom if it is to maintain its brand’s core values of exceptional service and product quality. They must find an alternative way to increase revenue if they are to remain true to the brand.
They are, correctly in my opinion, going after their core customer. Currently, this core customer for quasi-luxury has become very small in the US. Other global economies have recovered more quickly and are growing faster and more broadly than the US. This creates a growing Nordstrom core-customer population, just not an American one. It’s an open discussion as to when (or if) this core customer will significantly re-emerge in the US. In the interim, despite the very valid challenges listed above, Nordstrom is doing what they need to do in order to stay true to the brand that brought them success.
They may want to take a look at what happened to Starbucks when they took what was a high-fidelity store experience and tried to replicate it and make it ubiquitous.
I understand this is an online proposition but just the same, high-fidelity and “convenience” don’t often co-exist very well.
Part of what makes Nordstrom special is that it isn’t readily available everywhere.
My advice…tread carefully.
Part of the equation depends upon which 30 countries are being targeted and how the approach is being made. Many consumers in other countries have the capability of purchasing items from Nordstrom. However, the number of consumers in other countries who might be shopping at Nordstrom may not be large enough to support a physical store.
Assuming there is interest in these thirty countries and assuming that the shipping, documentation, and exchange rate issues are resolved, is the website information going to be translated into all the local languages? How will consumers in those countries learn about Nordstrom’s website?
Nordstrom’s move online is both bold and strong. With an average online presence before, they are smart to leverage a significant technical investment for the domestic market and also gain market exposure internationally. Furthermore, the data and insights that can be gleaned through sales data internationally could very well support an expansion strategy for brick and mortar stores.
Nordstrom’s private and proprietary brands such as Classiques and Faconnable have followings here in the U.S., however, building that following internationally would be the only way to differentiate from retailers and etailers that sell all of the other brands that Nordstrom carries.
To me, the unique play is providing currency flexibility and international shipping. I will definitely consider Nordstrom’s international site when purchasing gifts for my international clients and friends.
Replicating legendary service from one environment to another is always tricky. That even applies to one brick and mortar store vs. the original. But I see a great opportunity for Nordstrom in this.
Nordstrom is a great customer service franchise in retailing to begin with, of course. But to make sure they get the transition to online right, they might take a cue from other retailers who have made this translation very successfully. I would suggest L.L. Bean, Cabela’s and Lehman’s as retailers who have done a good job of maintaining their unique persona online.
Having been an expatriate myself in the past, I can say that Nordstrom is tapping into a niche market that is larger than most people think of both American expatriates and foreign nationals who are ready and willing spenders. If they can get the word out to the right people, this will be very successful.
It looks like Nordstrom learned from the mistake eLuxury made–ignoring the international consumer.
Nordstrom’s reputation was built so much on personalized customer service–at least here in the U.S; I can’t say what, if any, reputation they have elsewhere–that I’m not sure an eCommerce site will have any particular advantage over other retailers. Still, that having been said, I’m floored that they’ve taken so long to move (even) this far–and it doesn’t sound like very much. Do I wish them well? Sure, why not?