How to Succeed by Selling Just One Shoe
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Due to nature of its operations, Nordstrom can be categorized as a departmental store. During its set up, Nordstrom was a shoe retailer shop but has over the years grown to stock a variety of products among them clothing, jewelry, handbags, cosmetics, furnishings among others. The latest addition to its chain of stores is the acquisition of restaurants. The fact that Nordstrom has been able to achieve customer loyalty over the years has largely attributed expansion. Even in its expansive nature, Nordstrom still shares a number of similar characteristics with other departmental store retailers. For example, departmental stores deal with durable goods and in this case, Nordstrom stocks jewelry, shoes clothing, and cosmetics among others. Departmental stores also have the characteristics of having a chain of stores where in this case, Nordstrom has stores in both Canada and the United States.
Nordstrom has over the years evolved in business strategies. This has been brought about by its expansion leading to a change of structure in the way the business is operated, for example, centralizing management of stores and adoption of customer self service which has enhanced efficiency. Services were changed from full service to self-service because of the increased number of customers flowing in and out of the stores because sizes of the single stores have grown in size over the years. Change to self-service has helped to increase revenue because customer service is now more efficient. It has also helped greatly in increasing customer freedom, which has in turn led to greater customer satisfaction. The company's operational cost has also been cut down significantly and thus increased the company's profits since fewer attendants are needed as opposed to when they ran full service.
A store that is quite similar to Nordstrom is the Neiman Marcus. This store deals with products that are similar to those at Nordstrom and share marketing similarities with Nordstrom. It also has various chain stores within the United States. There are however very many differences between the two stores. One is the nature of goods they deal with. Neiman Marcus largely deals with hardware goods and luxurious jewelry as opposed to Nordstrom, which deals with clothing and shoes. The types of social responsibilities that they engage in are quite different as Neiman Marcus engages in very expensive offers to the society and this has largely affected its profit levels.
Nordstrom has a retailing mix that has largely contributed to its success. The most important one is the effort that the management has put towards attracting and maintaining customers. Nordstrom uses advertising that has fed customers with full information on the type of products that Nordstrom offers. Nordstrom's advertisements are constantly run in media houses and on the web and therefore customers always have full access to the information on Nordstrom's products.
Another strategy that Nordstrom has adopted is the analyzing of barriers between its sales channels that were limiting sales opportunities. These barriers included non-alignment of the mail orders the online store and the in-store. It is for this reason that Nordstrom decided to align all these stores so that whatever customers could get on the online store, they could also get the same from the in- stores and from the mail orders.
The company has also refused to hop on the price-promoting bandwagon where they promote regular pricing. The company's management does not believe in promotions and sales but rather on regular pricing. They strive to achieve customer experience that is "inspirational and upscale" according to Eric Nordstrom.
Another strategy that has seen Nordstrom grow over the years is focusing on the right customers and striving to keep the customers coming. This has been done through keeping in contact with the customers over the years and making follow-ups on the customers. Their sales representatives also make a point of calling their old customers when they bring in new merchandise. According to them, they run the company 'by heart'. Nordstrom is also known to have a generous exchange policy where they accept back any merchandise that has been purchased from Nordstrom within 30days if the product has not been worn or altered in any way. They also accept to exchange these products.
Another important strategy in Nordstrom retailing mix is the willingness to change according to customers' needs and evolving with the markets for example, the introduction of the online stores and evolving from full service to self-service. They have also adopted a computerized inventory system that has made it easier for the salespeople to make smarter decisions about what is needed in the stores. The computerized inventory system has helped to sell more items at full price and therefore improved the bottom line.
In the current retail market, Nordstrom faces numerous challenges, the major one being fierce price competition among the major department stores. Most department stores realize that the only way they can win and retain their customers is not only through exemplary customer service but also through introducing and retaining prices that customers consider low and/or fair.
Another challenge that Nordstrom faces is their expansion strategy that has led to opening up of many stores. Management of these stores though centralized is hard work and trying to maintain high levels of customer service at all these stores is also very hard and requires high levels of coordination and supervision by the top management of Nordstrom.
There has been increased competition in the retail market and Nordstrom has been forced to keep their prices relatively low as compared to their competitors. They are also needed to strengthen their value proposition to consumers (Merrick, 2001). Another major problem facing Nordstrom is working with emerging markets. This is because some of the local and custom laws from some countries are not consistent with Nordstrom's Fair Employment Practice Policy. The laws affect rights to collective bargaining and rights of women to work freely. It is therefore difficult when deciding upon the most appropriate approach to enter into new markets without creating conflict.
Over the recent years, competition for Nordstrom has significantly changed. One of the most significant competitions that Nordstrom faces is the emergence of open air power and lifestyle centers within communities. Consumers are therefore shifting towards these centers, as they are more convenient than the shopping malls where Nordstrom shops are mostly located. There is also a greater tendency of shopping online and this will therefore reduce the one on one customer service that Nordstrom has boasted over the years.
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