1 Billion reasons to celebrate: Nordstrom's online success

Written by David McKay

Seattle-based Nordstrom's online sales surpassed the $1 billion mark in 2012, which was a 37% increase over the previous year - six times the average company growth over its history.  Free shipping and free returns, in addition to access to inventory in every Nordstrom store (not just limited to e.commerce allocations) has helped fuel the business.  Customer usability has also also been a significant factor.  Customers can see items in any colour on a model, may contact a style stylist, and with # of clicks to product under 3.  


Additionally, the 2011 acquisition of flash-sale site HauteLook has been a key part of Nordstrom's strategy.  "We may have done a good job over the years with the Baby Boomer generation, but we have also got to figure out to be relevant to the Millennial customer, and HauteLook has built a business on figuring that out," said Jamie Nordstrom, the retailer's President of Direct.  The average age of a HauteLook member  is 30 with a household income of $75,000 yearly.  The two companies are beginning to align in more significant ways.  HauteLook has been a product testing ground for Nordstrom's 119 Rack locations - allowing the bricks-and-motar channel to buy with greater confidence product which did extremely well on the flash site.  Lorac cosmetics has been one such success story.  


Many luxury department stores are onto the next round of site improvements.  Saks Fifth Avenue has improved its navigation, is showing larger images and providing more editorial-like content.  Canadian luxury retailer Holt Renfrew continues to support a Showroom environment - showing product flat on white backgrounds, with some editorial images from its social media sites and printed catalogues.  Sales through the channel are limited to Gift Cards, available to be purchased and shipped only within the country.  Nordstrom, which is entering the Canadian marketplace next year with its first bricks-and-motar stores, has 15,000 Canadian credit card holders and offers easy shipping and returns to the US through their e.commerce channel already.