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"Nordy's" Doing Just Fine

In an era when it seems that every retailer has been battered by e-commerce and is struggling to find it's place in a new world order, Nordstrom is a shining example of all the good things that can happen when a marketer offers the right mix of products to the right segments of consumers.

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Nordstrom gets it. Although sales have been declining slightly at its department stores, marketers have done very well for decades offering premium items to premium-minded customers. And Nordstrom thinks it can turn things around at its traditional stores. While other retailers are busy cutting costs and closing underperforming locations, Nordstrom is buying small e-commerce companies and has invested $500 million in revamping its 122 department stores in hopes that a improving the in-store experience will also improve sales.

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Indeed the family-owned and operated company's off-price Nordstrom Rack concept has been performing very well for years now, a format that offers a mix of products that is rather different than what you would find in a regular Nordy's. The Rack does not attract the same consumer as the department store, and so cannibalization is not much of an issue.

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Marketers continue to open new Nordstrom Rack stores, and revenues from these, combined with a brisk e-commerce business, has increased revenue for the company by $7 billion since 2011. And marketers, not content to rest on any laurels, are also busy thinking of new concepts to try such as one in Los Angeles called Nordstrom Local. Apparently, that store doesn't sell clothes. Ever forward for this Seattle-based retailer.


Discussion: Do you think Nordstrom will be able to turn things around in its department stores? What kinds of changes should marketers make to existing stores?