Are you excited to read the topic Nordstrom’s Competitive Advantages
In the current scenario, Nordstrom is considered to be outshining every luxury retail outlet in the US market. The company was founded in 1901 with a small shoe store evolving over centuries to become a high-end retail store in the US. Back in the 1930s, Nordstrom’s evolved the company’s inheritance to make the brand a luxury retail outlet. Nordstrom has evolved from selling just shoes to expanding its portfolio to clothing, bags, cosmetics, jewelry, and much more.
Nordstrom has also elevated the shopping experience by offering credit cards to customers to boost revenue by credit card offerings. It was a major tool for building customer loyalty toward the brand. The brand is considered to stand out in terms of customer experience which proves to have a competitive gain overall luxury retail stores.
Understanding Nordstrom and Its Competitive Advantage
Incredible customer service
It is determined that Nordstrom has invariably delivered delightful customer services for decades in the market. The elevated shopping experience at Nordstrom is mainly due to the personalized services offered to the buyers at the store. As per several customer service surveys, the brand has topped the ranking numerous times. Jamie Nordstrom, the CEO of Nordstrom has often been noticed to mention the power of customer service towards the success of Nordstrom. Unlike other brands, Nordstrom allows its employees to make certain in-store determinations and follow their judgments. This is exercised through freedom and trust given to the employees.
Furthermore, Nordstrom is also popular for its superior return policy. Nordstrom is known to take back any commodity a buyer brings back with no questions asked. The outstanding customer service has made Nordstrom attain success and reach heights.
Massive Transition to Online Stores
With the growing technology, retailers who equally focus on the online selling segment of the business gain certain advantages. Nonetheless, Nordstrom ensured to keep their focus persistent on the enhancement of customer service online in order to achieve improved sales, new customers, and retain existing customers. As the trend of online shopping was growing and offering several opportunities to retailers, Nordstrom invested heavily in technology and order fulfillment. Enhancing the system of inventory has also worked positively for Nordstorm towards boosting sales and gaining a competitive advantage over other retail brands.
Nordstrom offers a distinct segment like credit cards to enhance sales, revenue, and store footfall. They offer a VISA credit card that can be only used at Nordstrom’s offline and online stores. This facility is exercised to encourage customers and enhance store traffic. It also acts as a reward program.
Diversified Portfolio
Diversification is considered to be the best competitive strategy for any company to expand. Nordstorm was nonetheless diversifying the portfolio and expanding the brand. Nordstorm has stood out from its competitors due to the strategies applied by the brand in regard to diversification. Nordstrom is ranked 1st in transitioning from retail outlet to e-commerce store. The brand also holds the policy of off-price subsidiaries leading to generating additional revenue.
Furthermore, Nordstrom offers restaurants and bars inside the store to enhance the shopping experience. For instance, the flagship store in New York City has 7 F&B outlets. Adding to it, Nordstrom has a concept to offer a personalized experience i.e. Nordstrom Local. It offers services like bespoke fittings, style guidance, alterations, pickups, returns, and much more.
Targeting Young Customers
Reaching youngsters has been a problem for retailers for ages but apparently, Nordstrom has deciphered this situation. The retail business offers millennials several discounts and deals to persuade them to shop. Nordstrom highly believes that these millennials at a later stage will become full-time consumers once they grow up. Nordstrom is less likely to be at risk with this strategy as it offers several brands under one roof. The brand keeps a close eye on the latest trends and styles on channels like Instagram and Pinterest to place products prominently on the online store. Nordstrom recently enabled the process of buying the items spotlighted on Instagram promptly.
Implementation of Porter’s Strategies
Porter stated three strategies to obtain a competitive advantage. They are the focus, cost leadership, and differentiation. Nordstrom is considered a winner in implementing all three strategies effectively. There is no doubt that Nordstrom is considered a luxury retail brand but it has effectively utilized the strategy of cost leadership through the annual sales events and Nordstrom Rack segment.
Here the brand offers discounted pricing to attract consumers on a large scale. Nordstrom employed the differentiation strategy through its Nordstrom Local segment by offering a personalized customer experience.
Nordstrom also suffered a loss due to pandemics and the closure of certain retail stores. Through the correct implementation of competitive gain strategies, the brand boosted its sales through online stores. Nordstrom was the first luxury retail store in the US to acquire and influence digital technologies to offer an elevated customer experience.
