Nordstrom’s challenge in the current environment is simple – be ahead of the thundering crowd with innovative ideas that will attract customers and create excitement.
Such initiatives are already taking hold. We will see new departments in a Nordstrom’s Men’s store that opens April 12, 2018, on Manhattan’s 57th Street. I expect this to be a very special store that will speak to the urban sophisticate. The 363,000-square-foot flagship store will open nearby in fall next year.
In addition, management has recently announced investments in digital technology. They have made acquisitions as part of an effort to strengthen their excellent customer service even further. One acquisition is Bevyup, which provides an integrated mobile app that will strengthen sales associates’ relationships with customers beyond the physical store. The acquisition of Messageyes adds to the skill of engineering, data science and machine learning and should support more personalized shopping. It should make for an effortless, frictionless shopping experience on the mobile phone.
There are also more merchandise changes in progress. Nordstrom announced a partnership with Anthropologie and has introduced more than 200 items from Anthropologie Home collection. Product assortments include kitchen, dining and entertainment, bed and bath textiles, room décor, stationary and hardware. These products will be seen initially in 15 stores and should be attractive to millennials, Gen Z and other youthful types. Anthropologie’s assortment has evolved and has now become recognized as a design resource. It adds a fresh look to the merchandise assortment of Nordstrom and will eventually be in key mall stores.
Other merchandise initiatives include Nordstrom’s partnership with Arielle Charnas; we saw the launch of the SomethingNavy brand. It adds a fashion brand that is at accessible prices. Similarly, there is a newly opened Celine pop-up shop in the Seattle flagship that will support customer orders from across the chain for this wanted fashion brand. The assortment ranges from ready-to-wear to jewelry and sunglasses. Beyond that, there will be pop-up The North Face Collections and other new programs that will make shopping in Nordstrom flagship stores a must.
The company recently reported its fourth quarter and full year sales and earnings for the year ended February 3, 2018. Sales for the full year rose to $15.1 billion, a 4.1% increase over 2017. Comparable store sales increased 0.8% for the full year, boosted by an increase of 2.6% in comparable store sales in the fourth quarter. Specific results for the Nordstrom brand, which includes U.S. and Canada full-line stores, Norstrom.com and Trunk Club, showed comparable store sales rose 2.4%. For the Nordstrom Rack brand – including Rack, HauteLook.com and Nordstromrack.com – comparable sales rose 3.7%.
Management indicated that kid’s and men’s apparel were the top selling categories in the final quarter of the year. That news is very encouraging since menswear is the most postponable category in a family budget. It indicates to me that there is a resurgence of confidence building for Nordstrom (and other retailers’) customers, and that suggests that 2018 will be a more positive year for the retail industry. However, management must continue to strengthen the women’s areas.
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