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Customer-centric Choices Lead Nordstrom From Distress to Success

Nordstrom Profits and Expands by Staying True to Its Customer Commitment

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Even in recession Nordstom stayed true to its customer-centric brand found its way back to profitability too.(More on Panera's 2010 store openings below.)
Customer-centric Choices Lead Nordstrom From Distress to Success
Barbara Farfan for About.com
Nordstrom’s customer-friendly policies are well-known, widely admired, and often imitated in the U.S. retail industry. This branded Nordstrom customer experience didn’t recess in times of economic recession. Nordstrom employees still work to form customer relationships and write thank-you notes, and the company still has one of the most customer-friendly merchandise return policies in the global retail industry. Customers are free to return their unwanted Nordstrom purchases back to the store with no time limit and may even receive full-price refunds, no matter how much time has elapsed.

The average selling price of merchandise in Nordstrom stores was reportedly about 10% lower than it was in 2008. For its price-conscious customers Nordstrom has adjusted its merchandise mix to include lower priced items, and lower priced versions of existing designer apparel lines.

Nordstrom’s rollback pricing efforts did take a toll on its sales returns in 2008 and 2009, but a look at the complete 2009 same store sales comparison shows that Nordstrom made steady improvement all throughout the calendar year, ending the last quarter of the year with positive year-over-year growth.

In 2009, Nordstrom was expanding instead of retracting, and managed to keep itself off the 2009 store closings list completely. Three new Nordstrom stores and ten new Nordstrom Rack stores opened their doors in 2009 while storefronts all around them were going dark. To further its expansion, Nordstrom launched a multi-channel platform which gives e-commerce customers a buy online, in-store pickup option. And to expand its global reach, Nordsrom made its online shopping available in 30 additional countries in 2009.

There will be 18 Nordstrom store openings in 2010, and 15 of those will be Nordstrom Rack stores which carry lower priced merchandise on their racks. This is in marked contrast to competitor chains like Macy’s, Saks, Neiman Marcus, and Dillards, which were still struggling and had no expansion plans to announce as they moved into 2010.

Nordstrom’s performance in key recessionary years proved to the rest of the U.S. retail industry that even in times of economic distress, companies can maintain an unwavering commitment to making choices that are in the best interest of the customer and those customer-centric choices will pay off. It’s only logical that the best financial results would be derived from the best customer relationships.

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