The 10 Keys To Nordstrom’s Digital Transformation

For decades, loyal Nordstrom customers have been flocking to the store for designer goods and great service. In recent years, however, Nordstrom has been undergoing a digital transformation for a fresh approach to customer experience. The efforts are a start, but they are far from a fully successful digital transformation. Many of us are watching Nordstrom, even rooting for its success. Time will tell if Nordstrom will not only survive the vast changes in the retail industry, but achieve the status it once held as a leader.

So far we can see that some aspects of the Nordstrom digital effort have been successful. Here are 10 keys to Nordstrom’s digital transformation.

1. Leverage Your Data

Nordstrom’s innovative approach to data helps the store understand its customers and create personalized experiences. Its personal book software is integrated into the point-of-sale system to provide real-time shopper information. Each online customer has a profile with their style preferences and purchase history. That information is used to make product recommendations and let customers know when their favorite brands are available.

2. Build Online Offerings

Nordstrom has spent the last few years expanding its online offerings and has tripled the number of items on since 2011. It also launched an e-commerce site for Nordstrom Rack in 2014 to sell its outlet and discontinued items. Revamping the website means not only adding more items but also making it easier for customers to search for what they want.

3. Create Local Stores

Modern customers often prefer to shop online, but they still want to experience the brand. Nordstrom has Nordstrom Local stores that don’t have any inventory but instead feature juice bars, nail salons, seamstresses and fitting rooms for online orders. Customers can order items online and can pick them up and have them tailored at local stores, which breaks down the walls between online and in-store shopping.

4. Re-Evaluate Your Real Estate

Nordstrom targets luxury customers, many of whom don’t like shopping in malls. The store has started adding more outside doors to its mall locations so customers can come directly in the store. It also opened targeted stores, including a huge, tech-savvy women-only store that will soon open across the street from a men-only store in New York.

5. Drive Traffic Through Experience Stores

Nordstrom tests new innovations and builds customer relationships in its Experience Concept Store. The Seattle-based store is where Nordstrom experiments with new ideas and services, like buying online and picking up in store and curbside pickup. Once proven with customers, the ideas are expanded to other stores.

6. Focus On Omnichannel Marketing

Nordstrom’s goal is to create a seamless experience no matter if customers are in store or online. The website and app are both integrated with an inventory management system that allows customers to easily find what they’re looking for. The system provides an accurate view of what’s in stock and makes it possible for customers to quickly find have their desired items.

7. Change Your Metrics

As Nordstrom takes a more modern business approach, it has switched to using metrics that are relevant for modern customers. Measuring data from a legacy store view isn’t as effective as looking at the big picture metrics of its two brands, Nordstrom and Nordstrom Rack. The new approach to metrics creates a holistic view.

8. Solidify Your Loyalty Program

Nordstrom’s loyalty program has always been a hallmark of its business—contributing 51% of sales—but the beauty of the program is how it evolves with changing trends. The loyalty program uses data to pinpoint the best products for customers and even takes advantage of geofencing to pinpoint when loyal customers are in the store for hyper-personalized service.

9. Encourage A Culture Of Corporate Humility

It’s not the most tech-savvy aspect of digital transformation, but it is one of the most crucial. Nordstrom is known for its culture of corporate humility. New executives start by working with associates on the store floor to understand employees and customers, and top leaders still answer their own phones. That culture spreads to all employees who know they can do whatever it takes to serve customers.

10. Connect With Customers On The Go

Modern customers are busy and don’t have time to wait for a response from a brand. Nordstrom puts a personal stylist in every customer’s pocket with its TextStyle app that allows customers to chat with associates and stylists. Customers can easily get product recommendations and purchase items through the app.

Nordstrom’s digital transformation is a step in the right direction with powerful uses of data and in-store experiences to drive customer loyalty. However, the company needs improved mobile and e-commerce experiences, especially with Nordstrom Rack. Nordstrom hasn’t fully arrived at digital transformation, and the jury is still out on if it will survive.

Blake Morgan is a keynote speaker, futurist and author of two books, “The Customer Of The Future” and “More Is More.” Sign up for her weekly customer experience newsletter here.

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