Pete Nordstrom on the philosophy of merchandise of Nordstrom Inc. - wwd

It is a combination of curiosity, openness to new types of supplier partnerships, and online expansion that plays a key role in Nordstrom Business Strategy of Inc.

There is also a steady stream of retailer-made labels that help keep merchandise fresh and identify what has become less relevant.

“We have 10% of our vendor revenue every year based on things that no longer have value and new things coming in,” says Pete. Nordstrom, the company's president and chief brand officer, who spoke Tuesday morning at the National Retail Federation's annual "Big Show" conference at the Javits Center in Manhattan. A socially distant Nordstrom appeared onscreen from Seattle, where Nordstrom is based, rather than in person, during his conversation with Phil Wahba, senior writer for Fortune Magazine.

“There's always been this evolution of brands, which is one of the great things about being a department store. It's important to consider being open to things we weren't open to before. ”

Nordstrom said the company is trying to become more important to brands, especially those most coveted by Nordstrom shoppers, by expanding the offering to more than is available only in stores. store, which means more sales on nordstrom.com.

“Burberry, for example, sells a lot of good stuff,” says Nordstrom. “They have stuff for pets, for kids. They have all kinds and our customers want to buy them. We want to be the best location in North America for Burberry. We have to find a way to deliver what they do.

Nordstrom has expanded the “openness” of what the company offers shoppers, he said, particularly in the areas of homeware and activewear.

“We've never run a home-based business like this before,” says Nordstrom. “As the Internet became a bigger part of our business, we realized that, great, we could have a great online offering that could be supported in a physical environment. . It really opened the door for us to do more. ”

In February 2021, Nordstrom Inc. announced plans to expand its digital portfolio from 300,000 items to 1.5 million over the next three to five years.

Last year, Nordstrom opened a two-story residence in the first women's section of 57th Street in Manhattan. It's full of quirky gifts and treats, as well as unique items, including books on the coffee table, stylish kitchen utensils, throws and pillows.

“Home is a big business with a lot of competition,” says Nordstrom. But in New York, people “have an eye for doing uniquely New York things… A big part of what makes such a division work is its spontaneity: 'I'm not coming. I'm looking for this, but it's so cool that I want to buy it. ' That's the fun part of retail for us, and I think that's what we do well, and then we have to make sure we have what people expect of us and make sure we have available stocks. You think about family business in the city and how it's different in suburban America.

With a three-month partnership with Fanatics, "We were able to do business with them in a way where we really had no ownership of the product and really acted as another platform to deliver." products to our customers online and see where it takes us. It really reflects where we can go and how things have evolved,” compared to the traditional way of working with suppliers and brands.

Nordstrom seeks to capture the majority of wallets from existing and new customers who are sports fans, and for the first time offers thousands of licensed sports products through Fanatics. “Obviously our customers buy these things too. When you get into this activewear and want to represent all of the teams and all of the communities that we serve, that's a lot of SKUs,” Nordstrom said. “The starting point is to offer things broadly and over time focusing on where customers might be interested. Last name [Fanatics] there are different things they do with different partners. there are some early days so we can talk about that ahead of time. We're actually in a more learning mode. They've been a great partner. They have a lot of opportunity. They have a lot of data and information. on clients. So those are the early days. With things like that, curation, I'm not sure it matters that much," at least initially. "It's really not too much of a concern, especially with something like that."

In general about Nordstrom's intention to expand online, he said, “It's good to have new options. It's good to have lots of choices and not so good to have something overwhelming. I don't think our goal is to be the aggregator of everything. We want a point of view. Our point of view is really broad. We aim for quality. ”

What's important, he says, is "how we paginate and craft the site so that it feels complementary to the broader base of what we do." We also want the brand to look great online.

“I have no crystal ball on how this all works, especially how it works in conjunction with our physical stores. Every day we learn, grow and develop. I hope it's a way to make the customer happy,” Nordstrom said.

Last July, Nordstrom acquired a minority stake in the Topshop, Topman, Miss Selfridge and HIIT brands owned by London-based fashion site Asos. It's an unusual type of partnership, because Nordstrom isn't a company that invests in the in-market brands it sells in stores and online. The deal is designed to help grow and secure the future of four British brands, in particular the fashionable and affordable Topshop for women and Topman for men, while reflecting Nordstrom's efforts to increase its appeal to young shoppers. .

"Asos came about through our relationship with Topshop. It was a really big deal for us and still is. Topshop was sold, Asos eventually bought it out. There's a reason we "We're still in the early stages of development with the Asos partnership," Nordstrom said. "The way we do business together is really different" from how Nordstrom does business with traditional brands. “They never sold to anyone else,” Nordstrom said, adding that his business in this case was acting more as a platform to offer the full spectrum of what Asos has to offer.” We are working on all its infrastructure elements."

With Nordstrom's online expansion, search, personalization, and data capabilities have become even more important, so the buyer experience isn't overwhelming.

During the pandemic, Nordstrom's e-commerce accounts for about 50% of its total sales. It stabilized in the 40% range. “We're not too concerned about how much business we have to do in one channel or the other. It will find its natural level,” depending on how the customer wants to shop. "We just want to be able and want to grow that way in real time."

Nordstrom has a proven track record of engaging direct-to-consumer brands, and Nordstrom explains why. "What we offer is that we take a lot of customers, high-quality customers, and let them connect with them in a way that doesn't involve marketing to people and the cost of acquisition. of customers. New products. ”

Furthermore, “We are interested and willing to work with new brands and we have a sense of flexibility to do what we can to work together and that's great. The perfect scenario for us is to have a popular and highly sought after brand that you can't find in many places. I don't think we're good at working for an unknown brand. But we are very good at making a bigger and better brand known… We welcome the opportunity to work with such new brands. That's actually the fun part of the job.

“You don't have to be a wholesaler to be at Nordstrom. There are other ways to do business together. That doesn't mean it's easy to do all of this, but you have to be willing and willing to try and find the right person. ”

Speaking of supply chain bottlenecks, Nordstrom said, “At any given time, there are so many products you can put in your system. So it's a limiting factor for us that the number of units we can pass. Nordstrom, who joined the family business as a stock boy, said of a buyer, “We really don't talk about the number of units as much as the money we make. I look at the open to buy and inventory levels. “But that has changed.

"Ultimately, you want the inventory you have in place ready to sell to customers as quickly as possible. This requires a lot of expertise and skill behind the scenes. We've invested in that- in it, but we'll be the first to say that we still have a long way to go. It's very different from before. There are important things for customers entering the supply chain that didn't really exist 20 years ago.

Nordstrom also spoke about the company's Off-Price Rack business, which has had a difficult and dragging 2021 for Nordstrom Inc. He talks about its evolution, first as a means of compensation for full department stores, then shopping in categories with brands, then adding Rack.com.

"There's a skill set and whole way of doing discount trading that's a bit different than a full-price banner," says Nordstrom. “For us to maximize our chances of getting a discount, we needed to find an even more local and hybrid product: a specific skill set that enables our business to perform better. That's always been true to some degree, but we've grown to the point where it's important for us to be more intentional about it. There is a huge opportunity for us to do better in the rack business and we are excited about it. ”