Nordstrom Retail Service Strategy - Assignment Example

 Nordstrom A study of its retail service strategy Analysis of Nordstrom as a retailer Four yardsticks that are generally applied for classifying a retailer are: Ownership Level of service Product assortment Price If this yardstick is applied on Nordstrom we find that: Ownership: It is a public limited company which was initially listed in NASDAQ and later moved on to New York Stock Exchange. The other salient feature about the company is that it has grown in size neither by the franchise route nor by the acquisition route that is adopted by other chain retailers. Each new store that is opened by the company is a new venture in a new geographic location and it is said that the top management personally visits the location and approves it before any new store is opened (Fisk, 2009). Level of service: Nordstrom believes in developing long lasting relationships with its customers and provides personalized service to its customers, especially the premium ones. The company feels word-of-mouth publicity is not only the most potent form of advertising but also is a sure-shot remedy to counter fickle customer loyalty. Customers will start talking favorably about the company only when they feel they are given importance and showered attention by the sales staff. So, Nordstrom meticulously ensures that each customer feels important and leaves the store fully satisfied unlike some other chains stores that focus only increasing turnover without spending much effort in pampering customers. Product assortment: Whether it was shoes which it initially sold or later on apparels which it started selling later, Nordstrom ensures availability of full range of sizes and a wide variety of designs for the customers to choose from. In this way, the possibility that a customer will end up buying something or the other increase manifold. This also means that a customer entering a Nordstrom store will feel assured that there would perhaps be no need to hop from one shop to the other in search of the desired product. All national level chain stores, however, also try to ensure considerable depth and breadth in product types they retail so this is not something that is unique about Nordstrom. Price: While some retailers opt for the discount route to attract customers, others try to project their exclusivity by maintaining high prices. Nordstrom instead fixes its prices in such a manner that convinces each customer that the product they buy is worth its price. This generates a sense of reliability and honesty that goes a long way to enhance its reputation. The company clears its unsold stocks at discounted prices through a separate chain known as Nordstrom Rack Clearance Stores and also has one final clearance store called Last Chance. Nordstrom’s level of service Nordstrom believes in developing personal relationships with customers as this creates a bond that the customer would rarely want to break. This is crucial to stave off the cutthroat competition that is the hallmark of retailing. The basis of such an approach is the perception by Nordstrom that while making a purchase a customer uses their head as much as they are dictated by their hearts and sentiments. There is this anecdote of a customer who had forgotten his airline tickets in a Nordstrom store. When a salesperson discovered the airline ticket, she hired a cab, paid for it from her own pocket and ensured that the ticket is delivered to the customer before he started to panic (Lamb, Hair, & McDaniel, 2008). Without wasting one’s efforts in trying to verify the authenticity of this episode, it would be better to consider it as a pointer to Nordstrom’s focus on according the highest priority to customer satisfaction that is generated as much from the depth and breadth of merchandise on offer and price level as it is from the mental satisfaction a customer experiences on receiving priority treatment. The entire shopping experience becomes a fond memory that a customer wishes to relive repeatedly. The other feature of Nordstrom stores is their liberal exchange policy. While similar other chain stores are rather finicky about returns as they result in revenue losses and attempt to indirectly discourage customers from returning or exchanging products that have been sold, Nordstrom never makes it an issue and eagerly accepts returns even if they cause a drop in revenue. This policy motivates customers to buy without any hesitation and finally they end up buying much more than they had initially planned for when they had entered the outlet. It is perhaps needless to add that Nordstrom sales personnel are specially trained in handling customers and individual salespersons are suitably rewarded and honored for the efficiency in reaching and exceeding sales targets. The other aspect of Nordstrom’s service is the presence of quality in-house restaurants where customers can get quality food at very reasonable rates. This, in a sense, further augments the satisfying experience of shopping in a Nordstrom outlet. Nordstrom can be rated as a full service outlet that is in direct contrast to GAP outlets where turnover is the main criteria. Retailing mix of Nordstrom Retailing mix consists of six Ps: i. Product ii. Place iii. Promotion iv. Price v. Presentation vi. Personnel Nordstrom can boast of one of the deepest and widest assortment of merchandise it has on offer in each of its stores and the location of each store is personally approved by the top management before it is commissioned. However, this is also partly true for other competitors, so one cannot say Nordstrom is any way radically different from its competitors in these aspects. However, Nordstrom depends more on word-of-mouth publicity in contrast to its competitors who spend large amounts on publicity through various channels. As regards price too the company fixes its prices in such a manner that each product appears to the customer as value for money and it never resorts to price discounts or offers any sort of freebies to boost its turnover. The uniqueness of Nordstrom lies in its presentation and personnel and in these aspects they are head and shoulders above any of their competitors. The presentation in any Nordstrom outlet is laid out in such a way that customers have the least difficulty in cutting through the clutter and locating the exact product that they are hunting for. But Nordstrom’s greatest asset is its army of dedicated and ever courteous sales personnel who are imbued with the spirit of service and customer satisfaction instead of conning the customer to part with their hard earned money as is witnessed in several other outlets. Challenges Nordstrom faces in the current retail climate Current retail climate is witnessing four major challenges: Interactivity M-commerce Pop-up stores Store-in-store model While most stores opt for the internet to increase levels of interactivity with customers, Nordstrom follows a more assured route of personalized interaction with customers that begins with sending information about new arrivals and extends right up to sending cards during occasions. Due to the human touch in all its endeavors, it manages to create lasting consumer loyalty. Not to be left behind in the world of web, the company has enhanced its web presence by implementing a seamless environment where online shoppers can freely walk into a retail outlet for issues (including exchange) they may have about a purchase made online. Thus, Nordstrom is fully equipped, rather a step ahead of competition, in the arena of M-commerce. Store-in-store model is perhaps not possible for a retailer like Nordstrom whose uniqueness is in the breadth and depth of products it puts up for sale in its outlets. A small counter would not be able to replicate either the ambience or the attention it showers on its customers and is so famous for it. Change in the nature of competition and expectations of customers Customers are now hard-pressed for time and want everything instantly. Many of them prefer to shop online at their convenience instead of trudging through supermarkets and malls wheeling their shopping carts all the way. So, the earlier concept of shopping, where the salesperson and the customer interacted on a one-on-one basis, discussing and arguing finer points of a purchase till a customer is fully convinced, is perhaps on its way out. The need of the day is perhaps more prominent presence on the web with intelligently designed websites that not only allow interaction with prospective customers but also suggest and guide them in firming up a purchase. Nordstrom is well aware of the changing scenario and has implemented a system where the virtual store and the real store segue without a hitch (Sviokla, 2010). References Fisk, J. W. (2009). Retail Selling: A Guide to the Best Modern Practice . BiblioLife. Lamb, C. W., Hair, J. F., & McDaniel, C. (2008). Marketing. South-Western College Pub . Sviokla, J. (2010, September 5). Radical Continuity: What Any Retailer Can Learn from Nordstrom. Retrieved November 23, 2010, from Futurelab: http://www.futurelab.net/blogs/marketing-strategy-innovation/2010/09/radical_continuity_what_any_re.html Read More