Nordstrom: How to Succeed by Selling Just One Shoe

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1.Identify the type of retailer that Nordstrom’s is classified as. Describe the characteristics it shares with other retailers of this type.

Nordstrom’s is classified as a department store. They are one of the largest U.S. department store chains, along with Macy’s, JC Penny’s, and Sears. As with the other department stores, each of Nordstrom’s departments are treated as separate buying centers. Each group operates independent from each other, being headed by a buyer who is responsible for the types and quality of merchandise sold, as well as any promotions that may be used. “The company has also benefited from a new computerized inventory system that gives buyers and salespeople the necessary data to make smarter decisions about what is needed in the stores – and what isn’t.” This makes it easier for the buyer to decide what items to purchase and display in the store, enabling them to sell more full priced items, and improve sales. Nordstrom’s also uses selective distribution as a type of retailing. They evaluate each potential site for a new store before building there. “Eric Nordstrom, the company’s president, visits each potential location himself before signing off on it. He says his gut instinct about a location is almost as important as the demographics and statistic they analyze. ‘Plenty of place look good on paper and we say no.’” Selective distribution allows them to maintain the quality that they are known for.

2.Describe Nordstrom’s level of service on the continuum from full service to self-service. Give an example of a store that would be on the opposite end of the continuum and explain their differences.

Nordstrom wants to give you the best possible experience, whether it is in their store or purchasing online or thru a mail-order catalog. When going into the store they want to make sure that you are treated with “love” and respect. They refer to their business strategy as “greed through love”. “They have perfected the art of focusing on the right customers and giving them undivided attention. A salesperson will often continue the relationship with a customer for years.” Nordstrom’s salespeople treat you in a way that makes you feel important. They want you to feel as if you are their only customer, and their most important customers. As times have changed, more consumers have gone toward self-service and Nordstrom’s hasn’t been afraid to go in that same direction. They now offer online shopping, as well as thru mail order catalogs. “The company now aims for a “seamless” shopping experience across all sales channels, whether mail order, online or in-store.” By making everything seamless they can continue to meet the high expectations that are set forth by the consumer that shop at Nordstrom’s.

A store that would fall at the opposite end of the continuum would be a factory outlet, or an off-price retailer, such as a Bob’s Discount Furniture, a TJ Maxx, or a Marshall’s. These stores sell items that couldn’t be sold off in regular stores, whether it be due to bankruptcy, cancelled orders, or defects. They aren’t known for the high quality merchandise or the high customer service level’s that Nordstrom is known for. Unlike Nordstrom’s, which allows you to return any item that you purchase, these stores generally operate with a “final sale policy” – once you purchase an item, it cannot be returned, regardless of the reason you may want to return it.

3.Analyze the six components of Nordstrom’s retailing mix to determine which have been the most important to the company’s success. Provide a detailed rationale.

There are six components to the retailing mix – product, place, promotion, pricing, presentation and personnel. Nordstrom’s effectively uses each one of these components to contribute to its success.

First, is product, which is the width and depth of the product assortment. This is the number of items displayed, and the quality of the items that are sold....
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