CHAPTER 15 CASE STUDY Sam Lampe Jamie Malnati Kat Wilson Aseel Kreishan John Saladino
NORDSTROM HISTORY• 1901 | Carl Wallin and John W. Nordstrom started a small shoe store in Seattle, WA.• 1929 | John W. Nordstrom and Carl Wallin retired and sold their shares to John’s sons, Everett and Elmer.• 1968 | The second generation debated selling the company as Everett neared retirement. They were convinced by the third generation Nordstroms to take the company public instead, and allow the cousins to take over the business.• 2001 | The ﬁfth generation of Nordstroms reasserted control, with the 3 sons of Bruce A. Nordstrom assuming senior executive roles in the company which they continue to hold today.
PHILOSOPHYThe companys philosophy has remained unchangedfor more than 100 years since its establishment byJohn W. Nordstrom in 1901:“Offer the customer the bestpossible service, selection,quality and value.”
NORDSTROMTODAY• Nordstrom, Inc. has grown from one downtown Seattle show store into one of the nation’s leading fashion specialty retailers, with 208 U.S. stores located in 28 states.• Nordstrom operates 115 Full-Line Stores, 90 Nordstrom Racks, 2 Jeffrey boutiques, and 1 clearance store.• Nordstrom also focuses on catering to their customers’ needs through its online presence and through its catalogs, creating a loyal customer relationship through different avenues of communication.
NORDSTROM EMPLOYEE HANDBOOK• For many years, new employees were given a copy of the famous Nordstroms Employee Handbook – a single 5 x 8 inch gray card containing 75 words: “Welcome to Nordstrom. We’re glad to have with with our Company. Our number one goal is to provide outstanding customer service. Set both your personal and professional goals high. We have great conﬁdence in your ability to achieve them. Nordstrom Rules: Rule #1: Use best judgement in all situations. There will be no additional rules. Please feel free to ask your department manager, store manager, or division general manager at any time.”
QUESTION 1• What type of retailer is Nordstrom?• Nordstrom is an upscale fashion retailer that sells shoes, clothing, handbags, accessories, jewelry, cosmetics, fragrances and home furnishings. It’s a department store sectioned off into these categories, and a specialy store speciﬁcally selling fashion products.• Nordstrom’s main competitors include Saks Fifth Avenue, Neiman Marcus and Dillards, along with lower scaled department stores like Sears, Macy’s and JC Penney.• Nordstrom and it’s competitors share the same ‘department store’ layout. They’re all divided into departments, with purchases generally made within each department rather than at one central checkout area (like Target, Walmart or Home Depot).
QUESTION 2 How would you describe Nordstrom’s level of service on the continuum from full service to self service?• Nordstrom’s level of service is between full service and self service. They have a strong level of customer service.• Nordstrom offers gift wrapping, layaway, and easygoing return policies, however they don’t offer personal shoppers, delivery or alterations.• A store on the opposite end of the specturm would be a gas station - the customer has to be totally self-sufﬁcient.
QUESTION 3• Which of the six components of Nordstrom’s retailing mix do you think have been the most important to the company’s success? Product Width and depth of product assortment Personnel Place (distribution) Customer service and Locations and personal selling hours Target Market Presentation Promotion Layout and Advertising, publicity atmosphere and public relations Price
QUESTION 4 What are the primary challenges Nordstrom faces in the current retail climate?• Current economic woes have decreased sales at most major high retail stores. How was the competition changed in recent years, along with consumer expectations?• Online sales are their biggest “seemless shopping experience” across all the shopping channels – online, in person and through catalogs.
Overview Chapter 15 - Retailing Classification of Retail Operations Ownership Level of Product Price Service Assortment Independent Retailers Chain Stores Franchises
Overview Chapter 15 - Retailing Automatic Vending Direct RetailingNonstore Retailing Direct Telemarketing Direct Catalogs & Mail Mail Order Marketing Electronic Online Shop-at-Home Retailing Retailing Networks
Overview Chapter 15 - Retailing Product Width and depth of product assortment Personnel Place (distribution) Customer service and Locations and personal selling hours Target Market Presentation Promotion Layout and Advertising, publicity atmosphere and public relations Price