Source: Nordstrom
Nordstrom focuses on seamless shopping as stores reopen
Nordstrom has long linked its in-store and online operations, and as it slowly begins to reopen its locations, management is counting on seamless shopping experiences to help put customers at ease at a time of stress.
“We’ve been investing in our digital and physical capabilities to keep pace with rapidly changing customer expectations. The impact of COVID-19 is only accelerating the importance of these capabilities in serving customers,” said Erik Nordstrom, chief executive officer of Nordstrom, Inc., in a statement.
Nordstrom ties more than half its store sales to customer journeys that begin online and a third of its digital sales to an in-store experience.
“More than ever, we need to work with flexibility and speed,” Mr. Nordstrom said. “Our market strategy helps with both, bringing inventory closer to where customers live and work, allowing us to use our stores as fulfillment centers to get products to customers faster, and connecting digital and physical experiences with services like curbside pickup and returns.”
The retailer is using its full-line department stores and Nordstrom Rack locations to fulfill online orders. Staff at all of Nordstrom’s department stores currently fulfill more than half the orders placed on Nordstrom.com.
Last month, Nordstrom began using store associates at its Rack stores to fulfill orders placed on nordstromrack.com and hautelook.com. Roughly 25 percent of orders placed on those sites are now being fulfilled from store locations.
Nordstrom plans to reopen its physical locations in a phased approach as localities lift stay-at-home orders for the public and allow retailers, albeit with recommended safety modifications, to serve customers in stores. The retailer plans to:
- Conduct employee health screenings;
- Provide face masks for associates and customers;
- Limit the number of customers and employees in stores;
- Increase cleaning and sanitization;
- Modify fitting rooms;
- Reduce hours of operation;
- Pause or adapt high-touch services and events;
- Keep returned or tried-on merchandise off the sales floor for a period of time.
The retailer also announced that it plans to close 16 of its 116 full-line stores and restructure its corporate, regional and support functions in an effort, along with previously announced cuts, to put it on stronger financial footing going forward.
In a securities filing last month, Nordstrom warned that online sales were not sufficient to maintain its business and its “financial situation could become distressed” if its stores were to “remain closed to customers for an extended period of time.”
Discussion Questions
DISCUSSION QUESTIONS: How well prepared, comparatively speaking, do you think Nordstrom is as it begins to reopen stores closed by the coronavirus outbreak? How do you expect a retailer renowned for its customer service to maintain that reputation in an atmosphere where social distancing is required?
Poll
BrainTrust
Jeff Sward
Founding Partner, Merchandising Metrics
Neil Saunders
Managing Director, GlobalData
This is the end of Nordstrom as we know it – maybe permanently. Meeting health and safety requirements is diametrically opposed to the high service levels Nordstrom is renowned for. It sounds like management is managing the situation as best they can – and closing the 16 stores was a prudent move also, but this is a hard pivot and it’s going to hurt.
Nordstrom is going to give us a great lesson in evolutionary retail. They are going to help redefine “customer service” in the post COVID-19 brick-and-mortar shopping experience. I like what I’m reading, but of course the proof will be in a store visit. Before the COVID-19 episode started, I watched one Nordstrom store convert a mall entrance shoe department (pure oxygen for Nordstrom) into a BOPIS/customer service area. And I don’t mean a desk, I mean almost 1,000 square feet. The willingness to make that kind of space reconfiguration tells me Nordstrom was already on the right track. Now, will there be enough post COVID-19 traffic to make it all work?
Nordstrom’s advantage is that its stores and online business have long been better connected than most retailers. In the short term, this will help it deliver a higher proportion of online sales in a sustainable and profitable way. More of a question is what the store experience will look like. The problem for Nordstrom is that many of its services and its customer service ethos requires interaction with staff. That will be much more difficult with new distancing guidelines. There is still a role for the store, but Nordstrom is going to have to adapt to make itself relevant.
The consumer expectation has greatly shifted in a mere six weeks. The one-to-one personalized service is no longer a high expectation, even at Nordstrom. However, the Nordstrom family has always been very in-tune with the shopper’s needs and is able to deliver a relevant experience based on customer expectations. At this time, Nordstrom will be able to offer a safe, comfortable shopping experience and will shift investments into more digital offerings like online, pickup, curbside and ship it which is how many consumers are wanting to shop. Maintaining extraordinary service is being redefined by the day and Nordstrom will continue to be the leader in this area.
Nordstrom is innovative and is showing they can adapt to the new world. As safety trumps experience for the foreseeable future, I see things like appointment-based shopping and curbside (where they can leverage their Nordstrom Local as well as their full-line stores) becoming more important and valuable. They know service – it may be a different definition of the service they are known for, but it is still great service.
Nordstrom seems well prepared to reopen from their linkage of store and online systems for a seamless consumer experience to their plans to provide a safe environment for shoppers given concerns over coronavirus. It is the kind of thinking and planning that Nordstrom management is known for. Nordstrom will provide the best customer service (in the case, including social distancing) of any retailer as they always do.
Jeff, I am with you on this one! I have followed Nordstrom for over 35 years in my time in the the industry. If there is one player I would put my money on, they are the one. This is not the end of life as we know it, this is the blossoming of brilliant ideas that will be very consumer-centric. No surprises, it’s the Nordstrom way.
If there is one member of the department store sector that has the capabilities, resources, skills, and agility to pivot their strategies in our post-COVID-19 world, the Nordstrom team is on top of this list. While at the surface, Nordstrom has historically been known for its outstanding customer service and experience, the organization has already pivoted with a digital-first strategy that is powered by driving omnichannel flexible fulfillment capabilities, such as BOPIS and curbside pickup.
Unfortunately, as we have witnessed, Nordstrom and other department stores are in the painful process of re-imagining what the post-COVID-19 shopping experience will be, which will include store closures, consolidations, social distancing, queues to enter the store and other precautionary considerations.
In the meantime, we all long for the day when we could enjoy a nice meal, coffee, or cocktail at the NYC Nordstrom showcase store.
Comparatively speaking? Nordstrom is lapping the pack in terms of creating seamless or frictionless shopping. Little argument there. But Nordstrom customers are used to ultra-high levels of personalized service, and that’s going to be tricky to deliver through masks and gloves when you are standing six feet away from a shopper. Some being comparatively better than mediocre performers just isn’t good enough. Nordstrom is going to have to work very hard to find the right service formula or it may find itself another COVID-19 casualty. That said, the company has earned a well-deserved reputation for solving problems other retailers have found intractable, so I wouldn’t ever count them out. But this is a new (and not necessarily brave) world for all retailers and, with the competitive playing field leveled in large part by the pandemic, it could be anybody’s game.
Nordstrom is wisely integrating more things. But I recommend they take care not to waste this time building systems assuming shopping behavior from this year (and likely next) represents what customers want in the long term.
These are unusual times. And the digital enthusiasts are using it to push their agenda telling everyone that the future is all digital (as they’ve done for 30 years — even as we’ve learned the future is mostly physical). We should take all long term digital claims at this point with skepticism. There IS change happening. But it’s not going to be what digital salesmen tell us to expect.
Well done. Taking the time to improve their digital connectivity will pay off for Nordstrom. Physical distancing does not mean the employees can not offer customer service. I don’t expect a change in the level of customer service offered by Nordstrom. Their plan to slowly open stores with lots of health measures in place is the best that can be done right now. Try a process, test, and modify will be the wave of the future.
The small format Nordstrom Local stores that Nordstrom began piloting in Los Angeles in 2018 are perfect for a “new normal” of online-first, social distanced shopping with physical locations used to bring pickup close to the customer and fill gaps in the online experience, like the confirmation of garment fit. This pilot format was more ahead of its time than they realized, and I’d expect them to expand it as they reallocate their capital spending.
I wish Nordstrom all the best, and judging more from their reputation than the specifics of this situation, I expect they are as prepared as anyone. But the reality is, as long as the focus remains on avoiding or at least minimizing human interaction, it’s going to be a challenge for customer-service focused businesses … it’s their raison d’être.
Nordstrom is showing retailers how to be agile in uncertain times. it’s not about making long-term changes right now. It’s about pivoting quickly to satisfy customer needs and desires in the shopping experience.
Just contrast the video in this article with the various COVID-19 ads in today’s other discussion. Nordstrom is using upbeat music, and showing us not hopes and dreams, but what they are doing to make the shopping experience safe for both their workers and customers. And they’re explaining how customers will be able to engage with the brand across channels. Finally, they’re welcoming customers back to shop with them again if they had stopped during the crisis.
How many other retailers are actively promoting a “welcome back” message at this point and not just hoping customers will come back to stores? Nordstrom is showing real leadership in the industry, including not being afraid to close underperforming stores. I can only hope, in turn, that a year (or two depending on your math) from now they are equally agile enough to pivot into the next “new normal” that we’ll be living in.
Nordstrom will have to make huge shifts like those they are already making and perhaps more to maintain relevancy to the new market landscape. And like so many aspects of retail, “customer service” will have a new normal. Being friendly, attentive and helpful will remain important, but respecting the customer’s space and health safety will also now take a prominent role. If Nordstrom can deliver on promised safety measures and demonstrate their reputed care and attention to detail in a way that serves the customer in this regard, it may be their saving grace.