Nordstorm’s Success, Assessment Example
Nordstorm Company is a business entity which deals with shoes. The company is as an upscale retailer of its merchandise and classified as a specialty store. This identified retailer has its characteristics that separate it from other types of retailer. First, specialty stores have high levels of customer service. In the case of Nordstorm, Patrick McCarthy, the first salesperson to create $1 million says that the company expects nothing less than heroic services of its customers.
In addition, LiorArussy, an industry observer, observed that the company gives undivided attention to their right customers. It is because of this, Nordstorm is famously known for its superiority in customer services for 100 years. Second characteristic is that these retailers have a narrow product assortment. They specialize in a particular product or service. Nordstorm deals with only shoe merchandises. Thirdly, these business entities have moderate to high pricing of their products depending on the distinct product. The company’s president, Eric Nordstorm says that the company aims at keeping customers experience aspirations and upscale. This is the main reason why they do not hop their prices and use the regular pricing system. The other characteristic is the high profit margin. This can be explained from having high sales due to high customer services. It is reported that Nordstorm had 8.6 billion sales in the year 2006 when other retailers were struggling in their sales.
Nordstrom’s level of service can be described to be full services based on the continuum from full service to self-service. In this type of services, companies have exclusive stores where their merchandise is sold through salespeople. Customers, who are willing and able to buy, come to the stores, chose what they want with the help of salesperson and purchase products. Nordstorm Company has 157 stores located in 27 states. The company also has online services where customers can purchase the merchandise offered online. On the opposite end, the continuum is the self services offering business entities.
Unlike the full service offering entities, these companies rarely have sale stores. Customers have to go to factory outlets or warehouse clubs in order to obtain what want to purchase. There are no sales people in this line of service. An example of a store which would be in the other end of the continuum is a warehouse club. BJ’s Wholesale Club is an example of a warehouse club that operates in the United States. Customers go into the store and chose what they want with no help of a sales person. These stores also have broad product assortment.
The six components present in a retailing mix are; place, personnel, product, presentation, price and promotion. Nordstorm Company has and uses all the components of the retailing mix. First, there are 157 stores that are located and placed in 27 states. Eric Nordstorm, who is the president of the company, visits each potential location where a store would be placed. They place their stores according to the demographic and statistics which they have analyzed. Their personnel are mostly the sales people who go about personal selling and customer services which include online sales. The salespeople provide good customer services to their customers. Customers are given undivided attention, called when there is new merchandise and are put first in everything by the personnel.
Their pricing strategy is that of regular pricing at all times. Some of their products are highly priced because of their superiority in quality while the rest are charged at an affordable rate. Presentation of their merchandise is based on the employee type and density. In this situation, their sales people present the customers with products in which they are selling.
Nordstorm Company has a narrow product assortment since they only specialize in shoes merchandize. Nordstorm Company products are promoted through word of mouth publicity. The firm does not spend much on traditional methods of advertising as their reputation is high in the industry. Their public relation with potential customers is through their personnel and online services. The most crucial component of retailing mix that the Company uses for its success are personnel, price, product and place. These four components have given priority in the strategies that are undertaken by the company.
Nordstorm Company is a traditional company which has operated for many years. Although it is successful, it faces challenges due to the ever changing retailing climate. Some of the primary challenges faced are high competition in the market, coping up with changes in the way customers shop and sustaining the high sales.
Competition level in the industry has changed in the recent years. Eric Nordstrom says that the competitive level has increased and that a business should be a high-energy business. Customer’s expectations have also increased with time. Many of the customers want online services to be offered to them. In addition, they want to be given the necessary data which would enable them make the smarter decision of their purchase.
Lamb, W. C., Joseph, F. H., & Carl, M. (2010-2011). Retailing. In MKTG. Stamford: Cengage Learning.
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