Business Strategy of Nordstrom’s

One primary source of influence for Nordstrom’s is the fact that it is the third largest upscale apparel retailer in the United States (trailing behind Federated Stores and the May Company.) The term “Upscale” is always used in reports about the store, although that is such a relative term in the United States economy that it has come to be almost meaningless. “Upscale” used to mean more affluent buyers who had more discretionary income, and wanted to spend it on more stylish items. However, such mass retailers as Wal-Mart, Target and K-Mart have also started billing much of their merchandise as “upscale.” The financial results of Nordstrom’s, illustrated later, suggest that the “upscale” definition has not helped its bottom line. This is significant of another trend in the world economy that those who have money are not particularly anxious to part with it, when the promise of substitute products at a lower price is available.

The company, with more than 75 stores and about 40 outlet stores (Nordstrom Rack) in 24 states, also operates a clearance store, two freestanding shoe stores, and three Fatonnable boutiques, and it sells goods online and through two catalogs. From its inception, another area of influence was its strong, almost zealous, devotion to customer service. Culturally, the company refers to its employees as “Nordies” and each employee is challenged to find out ways that they can “go the extra mile” for the customer. In fact, walking into a Nordstrom’s store is almost similar to walking into a Disneyland theme park, and one is almost assaulted by clean-cut, fresh, bubbly Nordies who ask if they can help at every step of the way. This ties in with another area of influence, the store’s “no questions asked” return policy.

The “shopping as entertainment” concept is carried out by the fact that most stores have live piano music and some feature day spas, restaurants, and espresso bars. According to a Hoover’s…

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