Will acquiring tech startups help Nordstrom boost its digital ops?
Nordstrom is the latest retailer trying to fill in its digital gaps by acquiring the right startups. The department store chain last week announced the acquisition of two tech startup companies, BevyUp and MessageYes.
BevyUp is a digital selling platform that Nordstrom intends to integrate into a new app for its employees later this year.
MessageYes is a conversational commerce platform that allows shoppers to interact with a retailer via text message and receive AI-generated personalized recommendations. Nordstrom expects to increase its facility with engineering, data science and machine learning through that acquisition.
BevyUp does not appear to be a complete unknown for Nordstrom. A page on the site dated January 2017 indicates that Nordstrom has been using Style Boards powered by BevyUp since at least that time. The Style Board feature allows a personal in-store stylist to create a Style Board featuring handpicked recommendations and send it to a customer’s smartphone.
Bolstering its omnichannel offerings may be critical to the long-term success of Nordstrom. While last quarter demonstrated improved online success, year-over-year physical sales were flagging.
Nordstrom’s Q4 earnings report indicated lower-than-expected earnings, according to CNBC. While sales were up, that fact was largely attributed to e-commerce. Comp online sales were up 12.4 percent at the main Nordstrom website and 23.7 percent at HauteLook and NordstromRack.com. Meanwhile, sales were slightly down at both the main brand department stores and Nordstrom Rack locations. The chain chalked up its earnings miss (despite strong online sales) to expenses associated with opening its New York flagship and more Nordstrom Rack stores.
Having to satisfy Wall Street each quarter is a burden the family that owns Nordstrom wants out from under. Last year, the family began discussing its desire to take the company private again, but has experienced a series of setbacks. Last week, the company’s board rejected an $8 billion buyout offer as too low, according to The Wall Street Journal.
- To continually evolve customer experience, Nordstrom acquires retail technology companies BevyUp and MessageYes – Nordstrom
- Personal Stylists – Nordstrom
- Nordstrom stock tumbles after earnings miss expectations – CNBC
- Nordstrom Style Boards Powered By BevyUp – BevyUp.com
- Would Nordstrom be better off private? – RetailWire
- Nordstrom Board Rejects Family’s Buyout Offer – The Wall Street Journal
DISCUSSION QUESTIONS: Will owning BevyUp and MessageYes give Nordstrom the right tools improve its omnichannel efforts? Do you see either of the two acquisitions having a bigger impact on Nordstrom’s business than the other?