Nordstrom Links Bricks and Clicks
Nordstrom appears to have achieved the link across selling channels that most
retailers aspire to, according to reports.
The department store chain manages inventories at its store and its website
as one entity. If a shopper is looking for a particular item online and it
is not in stock in the warehouse, Nordstrom will still be able to fill the
order pulling from store stock.
The same is true for in-store shopping where an item out-of-stock at a particular
location does not mean the consumer is out of luck. Nordstrom has the ability
to either grab the item from another store or from its website. Store employees
have the inventory information right in front of them in stores so they are
able to assist the shopper in making the purchase.
Jamie Nordstrom, executive vice president of Nordstrom and president of Nordstrom
Direct, told The New York Times that the company’s approach has driven "some
pretty meaningful results."
Nordstrom is unique in its approach to managing inventory, according to Adrianne
Shapira, an analyst at Goldman Sachs.
"I don’t see anyone going to the length they are," she told The
New York Times.
Nordstrom, which just launched a revamp of its website on Saturday, has been
busy perfecting what it is doing online for two years. The coordination of
online and offline was step number one, according to Mr. Nordstrom.
Nordstrom’s latest changes to its website include adding editorial and social
components. (See the Conversation tab on the nordstrom.com.)
The site revamp, according to Mr. Nordstrom, provides his company with a point
of difference from the competition.
"There’s not been a tremendous amount of innovation in online apparel
retailing, us included," he told The Seattle Times. "If you
look at most of our competitors’ websites, they all look the same, which is
fine."
According to Mr. Nordstrom, this latest step is just that, a step.
"There is no finish line on this. Every time we launch a new function,
the next day we have 10 more ideas," he told The Seattle Times. "This
is what retailing is about for the next 10 years."
Discussion Question: What do you think about Nordstrom’s approach to linking
its online and offline businesses? Do the latest changes to the Nordstrom
website represent an upgrade over the competition?
Nordstrom is taking full advantage of the widening gap between sites that thrive on planned obsolescence (Gilt and others) and pure players whose aisles (to me, anyway) are a bit too “endless” (Amazon)…and then there are the rest -sites that come off as brand-contradicting afterthoughts (Macy’s, Saks and even Barneys).
I’ve been saying that the online, and specifically, seamless online and offline integration and brand consistency, is the softlines retail blue water. Nordstrom just proved that it is swimmable.
As a women’s clothing shopper, all I can say is: At Last!
Since I am an unusual size, I spend a lot of time surfing for clothing sizes online after having looked through racks at the store. Shops don’t often carry the off-sizes anymore, presumably because it isn’t a profitable use of space.
After I find an item on the rack, the sales woman will say to me, I’ll look to see if we have it or if a another store has it. This usually takes a few minutes on the phone or online. I wait at the counter as other women are checked through. Inevitably, the answer comes back: no, we don’t have this – but you can check online. Well, yes. The only reason I bother to wear out my shoe leather is to see the color and fabric. If the return policy is generous enough, I don’t even bother to go to the store at all.
So – if the online and off line inventories are consolidated, this will help women on the fringes of the size continuum. However, it also begs the question of the role of the store in the shopping experience. I use the store as a showroom basically, for ordering online. I bet I’m not the only one. If that’s true, then it behooves stores to have a complete array of sizes. Then the clothing store becomes more like a Restoration Hardware experience.
A friend of mine, David Polinchock, coined the term ‘oneline’ which describes the merging of the online and offline experience. He defines it as the fluid to and fro movement that we experience in our day to day lives on and offline. Nordstrom executes this oneline experience seamlessly and elegantly. Add to that the online social media components that bring the community and the conversation to the shopper making it a personal connected experience. Brilliant! But really, is anyone surprised? It’s Nordstrom!
I wrote on IntegratedRetailing.com four years ago:
“Nordstrom’s is undertaking a mammoth infrastructure project to integrate its retail channels. The company is investing about $150 million a year for three years to upgrade its e-commerce and general IT infrastructure. Goals include a single view of inventory across all channels (stores, web site and catalog); integration of information systems that handle customer and product data; improved levels of customer service; and $1 billion a year in sales through its web channel within the next 4 to 6 years. By project’s end Nordstrom will be able to extend access to integrated inventory records to front-line employees and customers, and to offer in-store pickup of items ordered online.”
I guess those investments are paying off.
Not surprised that Nordstrom will be one of the first retailers to successfully integrate their customer sales and operations across selling channels. Nordstrom has always made such a strong priority to be customer centric!
Added Nordstrom “Great Ideas” in action. The ‘Blonde Bombshell’ (my serial shopper wife of the past 36 years), and I have diverging shopping patterns. I’m a ‘Mission Shopper’ who needs a blue shirt. She has never met a shopping adventure that didn’t have some appeal — be it at a Nordstrom, Saks, Kohls, TJ Max, or a Steinmart (the list gets longer, but you’ll understand).
Yet both of us have found the convenience and service of the online availability to be highly complimentary to the brick experience. Nordstrom has that great knack for looking at the issue from the consumer’s perspective. And, in this evolving model that Jamie Nordstrom describes, the consumer walks away with merchandise and the satisfaction that service, speed, and convenience have all been nicely delivered.
Nordstrom taking important steps to make shopping the 360 experience it can become. Integration of all the consumer touchpoints is essential–and about time! Not surprising Nordstrom is ahead here. With all the technology “out there,” it’s hard for shoppers to understand why simple things like inventory info takes extra time when it should be “right there.”
I don’t know that Nordstrom is “one of the first” but I do know that those retailers who treat inventory as a shared resource and create customer, inventory and order transparency across channels do garner incremental sales, improved fill rates and increased turn all at the same time.
RSR calls it “omni-channel” retailing, and we think it’s the way to thrive going forward. Today’s one-way communication vehicle is tomorrow’s shopping channel, and we have to get very nimble.
While their current same store and multichannel sales performance and profitability is up, the stock price lags some 30+% below its 52 week high. That lag may be a trend for all retail, but it’s notable considering performance.
From an experienced point of view, I couldn’t have been more disappointed this past holiday season with Nordstrom; so much so that I hadn’t looked at them since. It’s probably time to give them a second look now.
Over the holidays, the store that I visited (a special trip to do so), was lackluster to say the least. It was almost not apparent that it was the holiday season at all. Several of their associates were so scantily dressed–in the shoe department no less–that Mrs. Scanner quickly suggested we just leave. It was quite distasteful and remarkable for a retailer at the level of Nordstrom. They had always been a retailer I had admired and lauded for their greatness. My last experience was astonishing.
Is what they are doing the right thing? Absolutely. Nevertheless, in colliding the two–bricks and clicks–they have a long walk back to something close to the experience I had in seasons past. Was it an aberration? Maybe. We’ll see. Obviously, based on sales reports that may be the case. Yet, even those need to be taken in the light of being an increase over something. Beating a previous lousy year looks good in percentages. But, is it really good? Maybe. I’m skeptical of it.
I’ll have to plan a day trip for Mrs. Scanner again and take another look. We’ll also take a look via the web. Based on experiences with Zappos, L.L.Bean and others, Nordstrom isn’t my first thought. It will take an intentional look.
Every multichannel retailer should operate seamlessly like this. Nordstrom has the advantage of a less varied/localized assortment than many other retailers and also can pass along cost to the customers easier than many other retailers. But if multichannel retailing is ever to reach its full potential, Nordstrom’s methodology needs to become the norm and not the gold standard.
I think they’ve touched all the key bases with solid applications of multi-channel and social marketing. As far as competitive distance, I don’t think technology in itself is a competitive show stopper. It’s too easily replicated. What will distinguish them is how they use and manage the technology to delight their customers. That’s the tricky part.
Can anyone be surprised that it would be Nordstrom, the most customer focused retailer, who would be the first to set the bar here?
When you start to draw it up on a white board, this is the kind of integration that you envision. The devil, as in most things however, is in the details.
Nordstrom excels at execution, and flawless execution is the key to capturing the potential of fully integrating stores with e-commerce. Still, my belief has long been that unless you have inventory turnover issues at retail, at a certain e-commerce volume level it’s more efficient and effective to fulfill e-commerce orders centrally.
As a previous commentator noted: are we surprised it’s Nordstrom to first do this? Not I. Not since I purchased an evening gown and they delivered it, expertly altered, to my home that same evening of the event…Not since they sold their first pair of shoes in Seattle, and continue to deliver some of the most exciting footwear assortment in the world.
This still family-owned emporium “gets it,” as we have posted on our blog many times. Yes, the recession has meant lower revenues, but they continue to invest and do their best to have a USP. They will survive the recession, and we will continue to be loyal customers. You GO, Nordie!
I’m not overly excited by this; Nordstrom has long been famous for its “let me check and see” approach to customer service, and certainly integrating store and warehouse inventories will mean there will be even more places to “see”; but the reality is an out-of-stock is still an out-of-stock: adding store inventories as a backup source for online orders means there will be more OOS in the stores themselves.
This is one very important advance in the Convergence of Online, Mobile and Bricks-and-mortar (COMB.) I see that David Polinchock (per Marge Laney) had already coined Oneline to refer to the convergence of online and offline. But there is no good reason to not include mobile in this convergence–even though this Nordstrom story is not about mobile.
I’m pretty certain that some years from now, large numbers of retailers WILL include mobile in what Nordstrom is doing, and it won’t be simply about inventory management, as an adjunct to the selling proposition, but using a powerful personal selling assistant (electronic) with this inventory management as one fundamental component.
This is a brilliant move by Nordstrom and will certainly give them an edge against competitors. Consumers will quickly understand that Nordstrom can deliver the size, color and designer they want, when they want it.
I have had the pleasure of meeting with Ira Neimark, former CEO of Bergdorf Goodman and executive with Nordstrom, on more than one occasion. He always insisted a key to retail success (specifically with garments and trendy items) was smart buying and inventory control. This latest move by Nordstrom will help them move more inventory with fewer markdowns at the end of each season. Other brick and mortar retailers that also sell online could learn from Nordstrom.
Ira Neimark also wrote a book about his retail experience. He includes some wonderful stories and business lessons.
You can’t argue with multi-channel consistency, customer service and the premise of fulfilling from the largest pool of available inventory. However, as long as centralized inventory is forecast and managed appropriately, it is the much more profitable way to go, as is buy online, pickup in store. Benefits include reduction and management of costs per order, quality control of all outbound orders, ability to expedite an order in one complete shipment from a single location, customer service tracking, etc, etc.
I understand from a customer perspective the value of access to all inventory in the system and the ability to order the odd size shoes, etc, that are hard to find. Good, profitable business practices would make that the exception and either centrally stock the goods or utilize virtual drop ship vendor inventories.
Check out Walmart’s website and look for the “View Products In Your Store” function that asks for your zip code. (Look in the upper left corner of the home page.) They also have for some time offered in-store delivery of online orders. Sounds like Walmart is already offering services to which Nordstrom aspires.
Of course, a few self-service retailers have for some time featured in-store kiosks with internet connections to their own websites. These are generally used by store employees to help customers, but customers can use them, too. The purpose is to see if a store’s out-of-stock situation can be ameliorated by finding the item online or in another store. However, the reverse function of finding an item in a store if it’s o-o-s for a customer shopping online was never available until recently. It’s a great move.
Most large chains are currently matching online and store stocking for inventory control.
Brilliant! Wish they could share it with rest of retail!
Sounds like a great plan but the customer service that Nordstrom prides itself on is already suffering. If an item is not available, it is not available and they no longer source or work as hard for the consumer.
In a service economy, it’s great to see industry leaders actually emphasizing service and investing in the tools to enable delivery to customers.
On the surface, what Nordstrom is doing is not unique. For years, we have been able to ask an employee of a big box store such as Sports Authority or Barnes & Noble to search for an out-of-stock item at another location. One notable exception was Blockbuster, who could have 3 stores within 5 miles and not have any connection between inventories, worse making the customer create separate memberships. Ah well, they are closing stores at a rapid pace and maybe this was a contributing factor (customer inconvenience).
The difference here seems to be the level of integration that has taken place, i.e. instead of store associates making phone calls and then sending you on a treasure hunt to find your item, available inventory is seen on screen. I am assuming that they also facilitate delivery from online source or from another store. That would be the last mile of service to make this new feature resonate well with customers.
The links between its online and offline businesses provides convenience for the customer and additional sales for Nordstrom.