This past year, Lord & Taylor announced it would close its flagship store in New York City, as well as 10 of its other retail locations through 2019. While many long-established retailers have struggled to keep up in an increasingly omnichannel retail environment, the announcement still came as a surprise for many people as the 676,000-square-foot store has been a mainstay on Fifth Avenue for more than a century.
A number of other legacy retailers have been forced to close some or even all their doors, but the news of Lord & Taylor proved that even upscale retailers that appeal to affluent shoppers are struggling to keep up in a constantly evolving retail environment. There's one upscale retailer, however, that has managed to change with the times. It was an early adopter of online retail as far back at the mid-90s, and in 2017 the company’s revenue reached $15.1 billion in sales: Nordstrom.
As we move further into 2019, retailers should take inspiration and direction from not just a legacy retailer, but a truly cutting-edge company that's constantly reassessing its retail strategy and using new forms of technology to stay on top. Here are some innovative ways Nordstrom is staying ahead of the competition:
Self-Service That Goes Beyond Checkout
Self-service technologies aren’t new inventions. Retailers of all sizes, from Amazon.com to CVS Pharmacy, offer self-service checkout. Nordstrom took the concept one step further, however, by adding self-service return bins where customers can drop off returns, including online purchases, and get credit almost immediately. The retailer also offers Scan and Shop, a feature on the Nordstrom app that allows customers to take a picture of an item, upload it to the app, and find similar items online. By offering the ease and convenience of returns and frictionless integration with its online store, Nordstrom is giving its customers all the more reason to shop in-store.
When cultivating strategies for 2019, retailers should consider new ways to get customers in the door and encourage transactions. While most companies can’t change their store’s entire digital footprint, they can add touchpoints, like price checkers and interactive catalogs, throughout their stores to give consumers a shopping experience that’s both efficient and enjoyable.
Tech-Enhanced Customer Service — In-Store and Online
Nordstrom is known for delivering superior customer service, and the retailer equips its associates with technology to create even better shopping experiences, whether or not the customer is in-store. In 2018, Nordstrom acquired retail technology company BevyUp, which connects sales associates and customers outside the four walls of stores. The service, which has been integrated into a Nordstrom employee app, has a Style Board feature which allows personal stylists to send clients product suggestions based on items they’ve recently purchased. A Fortune article referred to the service as “the updated version of having a favorite salesperson call you with a hot tip.”
According to a Tulip Retail survey, 80 percent of shoppers believe they’re more knowledgeable than retail store associates. To combat this problem, retailers should take a cue from the Nordstrom handbook by arming their store associates with the right knowledge and technology. Handheld devices that contain digital store layouts and product information can help associates lead shoppers in the right direction, while mobile point-of-sale systems give them the ability to complete transactions away from a register. E-commerce companies that don’t have a brick-and-mortar presence can also close the communication gap with embedded features like live video chat and chatbots.
Nordstrom is constantly experimenting with new retail concepts, finding new and better ways to serve its customers. In 2017, the retailer opened a Nordstrom Local store. The store isn't your typical retail brick-and-mortar establishment. In fact, it carries almost no merchandise. Described as a “service hub,” the Local stores offer on-site tailoring services, handle item pick-ups and returns, and even have seating where customers can relax, have a drink, or work. While Nordstrom is obviously not the first company to try its hand at creating a branded “experience,” Nordstrom Local’s unique combination of services and subtle but effective brand awareness make it a standout example of experiential retail.
Not all retailers can invest in a permanent experiential retail store, but they can create their own experiential experiences in their stores, online or even outside. Temporary pop-up shops like the ones Wayfair opened in New Jersey and Massachusetts give customers an interactive, branded experience while offering the retailer a way to simultaneously collect different types of KPIs, like brand awareness and affinity. Retailers that want to create their own experiential event online can use live video features, like interactive broadcasting, to showcase their products in live fashion shows or real-time how-to tutorials.
While Nordstrom employs many different tactics and technologies, retailers could see a major boost in their in-store and online sales by taking a cue from the company’s practices. Consider offering more self-service opportunities for customers, equip your customer service teams with the right technology, and get creative with your marketing and branding through experiential events.
Bart Mroz is CEO at SUMO Heavy, a digital commerce strategy firm. The company builds, connects, expands and invests in growing online retailers. This group of experienced strategists, consultants, designers and developers works to build solid brands and to create effective online retail solutions. Bart is an expert in e-commerce, business consulting, and technology strategy.