Bhumika Jain - CASE STUDY 4 MARKETING

CASE STUDY 3
Nordstrom
Nordstrom is an upscale U.S. department store chain with sales that topped $8 billion in 2009. John
W. Nordstrom originally started the company as a shoe store but grew it over the years into a fashion
specialty chain store selling top-quality, brand-name clothing, accessories, jewelry, cosmetics, and
fragrances.
From the beginning, Nordstrom has believed in and stressed the importance of providing the highest
level of customer service possible along with top-of-the-line, high-quality merchandise. As a shoe
retailer, the company offered a wide range of products to fit most everyone’s needs and price point.
As it expanded into fashion and apparel, it maintained these goals.
Today, Nordstrom sets the standard in customer service and loyalty. In fact, the company is so
well-known for this trait that urban legends of unusual acts of customer service still circulate today.
One of the best-known tells how in 1975 a customer came into a Nordstrom store af- ter Nordstrom
had purchased a company called Northern Commercial Company. The customer wanted to return a
set of tires originally bought at Northern Commercial. Although Nordstrom has never carried or sold
tires, it happily accepted the return and instantly provided the customer cash for his purchase. While
Nordstrom’s “no questions asked” return policy remains intact today, there are many other examples
of its exceptional customer service. Its sales representatives send thank-you cards to customers
who shop there and have hand-delivered special orders to customers’ homes. Nordstrom installed a
tool called Personal Book at its regis- ters that allow salespeople to enter and recall customers’
specific preferences in order to better personalize their shopping experiences. Nordstrom also
provides customers with multichannels for shopping, allowing them to buy
something online and pick it up at a store within an hour. Nordstrom’s customer loyalty program,
Fashion Rewards Program, rewards customers on four different lev- els based on their annual
spending. Customers who spend $10,000 annually receive complimentary alterations, free shipping,
a 24-hour fashion emergency hotline, and access to a personal concierge service. Customers at the
highest rewards level ($20,000 spent annually) also receive private
shopping trips complete with prestocked dressing rooms in the customers’ specific size,
champagne, and live piano music; tickets to Nordstrom’s runway fashion shows; and access to
exclusive travel and fashion packages, including red carpet events.
This strategic and often costly customer-focus ap- proach has reaped great benefits for the
company. Not only has Nordstrom emerged over the past 100+ years as a luxury brand known for
quality, trust, and service, but its customers stay loyal even in hard times. During the eco- nomic
crisis in 2008 and 2009, many customers chose to shop at Nordstrom over its competitors due to
their exist- ing relationship and hassle-free return policy.
Nordstrom currently operates 112 full-line stores, 69 Nordstrom Rack clearance stores, two Jeffrey
Boutiques, and one clearance store, with plans to open 50 new stores over the next 10 years. When
a new store opens, Nordstrom connects with the surrounding community by hosting an opening
night gala complete with live enter- tainment, a runway fashion show, and the ultimate shopping
experience to help raise money for local charities.
As Nordstrom moves forward, the company continues to be flexible and look for new tools and
means to help deepen and develop its customer-salesperson relationship.
Questions
1. How else can Nordstrom continue to provide exceptional customer service and increase brand
loyalty?
2. What are Nordstrom’s greatest risks, and who are its biggest competitors?
Answers-
1. Customer service refers to the service provided by the company to its customer for its
purchase. The brand loyalty increases with the better customer service and with better
customer service more customers are attracted.
Nordstrom is providing amazing customer services and the reward system step is highly
acknowledged. Each and every segment is taken care of properly. The company can increase
its brand loyalty in following ways-
● The company should do social service or something for the society , that is CSR
activities , this will help to attract customers and this is how they can give to society.
This will create sense of awareness .
● Due to increase in usage of eco friendly products, the company should also focus on
eco friendly products,i.e green marketing. This will again attract more customers.
● Employee reward schemes should also be there which will help to motivate
employees and better results will be produced and customers will be happy.
● The company should keep up with the high quality product they are selling, as this
will help to retain the customer, they will be loyal to company.
● The company should stick to the policy of return of goods any time.
● The company should stick to their current hiring policy of hiring nice people and
teach them sales and not vice versa.
● They can also ask for feedback from customers. This will help them to know what
customer thinks about their product and make changes. This will also help to retain
customer and attract more customers as this will depict as company thinks about
their customer’s needs.
● Also by increasing brand reach, more customers will be buying the product as more
people will talk about the product due to increasing brand reach.
2)Risks-
● Nordstrom is highly dependent on its suppliers as its product is designed and
produced by other companies. So it also shares few risks of the suppliers’ such as
changing trends and lifestyles. It is very difficult to forecast fashion trends as it keep
changing very often. Therefore Nordstrom should retina well diversified network of
suppliers.
● Nordstrom has wide range of product line and it’s market segment which is difficult
to retain.New competitors might get some of Nordstroms segments by using tighter
specialization and smaller segments.
● They provide high social contributions and extraordinary customer service which
results in cost risk. The expenses are higher than the competitors’ which resulted in
low EBT.
● The Covid - 19 also resulted in a decline in consumers spending habits.
● Job layoffs are causing consumers to cut back on spending which has resulted in
reduction in sales.
● The Covid 19 resulted in loss of job which resulted in decline of sales.
Nordstrom’s biggest competitors are Macy’s, Saks Fifth Avenue Von Maur, Lord & Taylor,
Bloomingdales,Kohl’s,Neiman Marcus and Gap. There are indirect competitors such as
eBay and other online stores.They don’t offer the same service but you can get the same
brands at a cheaper price.

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CASE STUDY 3

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