Last week at the shop.org conference, Jamie Nordstrom, Executive Vice President of Nordstrom, took to the stage to talk about the evolution of Nordstrom and it's move online. Jamie Nordstrom did just about everything in his 26 years with the company. He started in the stock room and moved his way up through sales and management until he reached the top and became Executive Vice President and President of Nordstrom Direct in 2005.
In that time, Nordstrom made it's own journey from offline to online to multichannel integration. It took time, patience and plenty of investment but it lead to Nordstrom becoming one of the best in show for retailers trying to stay ahead of the ever shifting curve of omnichannel retailing.
In 1998 the Internet (as we know it) came about and the catalog team at Nordstrom started the largest shoe website, norstromshoes.com, and began to sell online. There was a lot of trial and error as they navigated the ecommerce waters but it taught them how to learn how to create in a nimble way.
By 2000, Nordstorm's online presence was based on their catalogue but it didn't reflect what was available in the store. By 2004, this disconnect led the team to ask itself if the online customer was the same as the catalogue one. The answer was no. Customers online wanted the same experience as they'd get in store.
Integration takes a lot more than tech
Multichannel integration involved big investments in integrating as online and in store within Nordstrom had different systems for merchandise, accounting, etc. But the harder component to integrate was the teams. Online and in store had their own marketing, HR, etc. They came up against the attitude from the online team that they thought of themselves as the smart cool fast kids while they considered the store team to be dinosaurs.
Ultimately the customer doesn't care who gets credit for the sale. He stopped the online and store teams from battling over credit by stressing that they figure out the accounting later. If you always put the customer at the centre, then the decisions you make will be good. It took 4-5 years to connect the dots and move toward a single view of merchandise to create one Nordstrom experience. By 2009, Nordstrom allowed customers to pick up purchases in store with all available merchandise shown online.
But Jamie Nordstrom believes his company is moving beyond multichannel and is heading to a place where best in class in store and online is necessary. You have to get both now especially if you want to attract the younger customer. Whatever channel they are in at that moment in time needs to be the best.
Omnichannel retailing isn't enough. You must be the best at everything
Customers won't give you credit for being good at one touch point (store, online, mobile). After companies integrate their shopping experience across all channels, the next step is to be the best. Many things won't work but that's the trick. You have to celebrate what didn't work to be able to move away from that toward the things that do. For instance, Nordstrom introduced free shipping and returns last year. Customers love free. Shipping is not the customer's problem. It's the retailer's problem. And soon, when same day delivery moves wide spread through Amazon, all other retailers will be expected to provide the same.
Loyalty used to be miles, points and discounts. But now that companies like iTunes gives you personalized choices, how do you echo that and give personal value? Nordstrom is working on personalizing the experience of their customers. Five to ten years ago personalization seemed too big brother. Customers now want you to use their information to make their experience better. In store the company has increased the number of personal stylists that can serve customers head to toe.
In store tech has also increased. Looking at the Apple store experience, the team at Nordstrom realized that the days of big cash desks are gone. It's now driven by devises from customer service all the way to sales. In fact, by February, mobile devices will do more than cash registers in Nordstrom stores.
But the move toward devices shouldn't be so surprising to Nordstrom. Their mobile sales is on a steep curve upwards with ecommerce growth up 40% year to date. What payments are now may not be that of the future but Jaime Nordstrom stressed that "whatever the digital wallet is, we'll further evolve with it."
The main point of the most of the discussions at shop.org was echoed by Jamie Nordstrom at the end of his talk. "Companies were in control even up until 2000. But now the customer is in the driver's seat. If you embrace that, you will thrive. If not, then by 2020, you will not survive."
If the future of retail is being the best for your customer, the question remains: how much will it cost your company to stay alive? And will you be able to afford it?
Econsultancy's JUMP New York event is a conference dedicated to joined up marketing and e-commerce. It takes place on November 1, and features 40 speakers and 750 client-side delegates.