In reading the article “Nordstrom Innovates Retail”, Nordstrom recently opened the first prototype of a new store concept “Nordstrom Local” in Los Angeles, California. The “Nordstrom Local” store is incredibly unique, as it carries no merchandise inventory for consumers to purchase. Instead, the new store offers a variety of services to customers, including curbside pickup for those who have bought online.
“Nordstrom Local” provides a link between buying online and in-person attention from Nordstrom stylists. Because the store has no dedicated inventory, customers can shop at the company’s website and pick up the purchases on the same day when placed before 2 pm. Talk about convenience and easy pick-up for Nordstrom customers! In addition, these personal stylists find the merchandise for customers across the Nordstrom chain and have it shipped for customers to try on in the new stores.
Nordstrom’s senior vice president of customer experience, Shea Jensen, stated in regards to the opening of this prototype, “We know there are more and more demands on a customer’s time and we want to offer our best services in a convenient location to meet their shopping needs”. It seems to me that Nordstrom is trying to better target to their retail customer’s order winners that are “great service, speed, and convenience”. The target customer base for these stores are frequent Nordstrom’s customers looking for an “intimate setting offering a full array of services that are available”. “Nordstrom Local” is a practical solution to consumer’s time restraints, as the store is close to the Nordstrom customers and allows for quick pick up of items over the internet.
In regards to inventory flow, fashion merchandise will mainly come from a Nordstrom mother store (a Nordstrom located relatively close to the “Nordstrom Local” location). Because these two locations are somewhat close, shipping and transportation costs would be reduced. Instead of these items being shipped from Nordstrom store locations all over the country, merchandise is transported quickly from the mother store to “Nordstrom Local” and costs are reduced for the company.
Nordstrom is also trying to better the company’s inventory management (the planning and controlling of inventories to meet the competitive priorities of the business) and overall customer experience. As previously stated, customer’s retail expectations are evolving and Nordstrom is emphasizing speed as a competitive priority. With this change in competitive priorities for the company, Nordstrom has aimed to change how they plan and control their merchandise. Having no inventory at these stores streamlines the process, as there will be fewer waits and returns for customers. With fewer waits and returns, Nordstrom customers will have a better experience, as these pains are reduced. When the customer experience is improved, Nordstrom is provided with better and higher quality information in regards to customer preferences. This information allows the company to have a better inventory supply of merchandise for customers, aiding in more effective inventory planning. In conclusion, the “Nordstrom Local” store is now able to have improved processes and smarter inventory, allowing the company to be even more prosperous.
Do you think Nordstrom’s new venture with “Nordstrom Local” stores having no inventory on hand will be successful? How does this expansion relate to other class topics we have discussed?