Inside Nordstrom's Big Sales Turnaround

Last Updated Jul 20, 2010 10:16 AM EDT

I meant to post this blog sooner on how Nordstrom (JWN) is growing its sales (up more than 14 percent in June!) despite the still-mopey economy. But when I went to look up its financials on their Web site, I saw this stylish, simple little Maggy London sheath dress was on sale. Next thing I knew, I had looked at about 40 dresses from the same brand, and was trying hard to pick my favorite.

Which pretty much sums up the story of how the company rebounded and is now selling like it's 2007. While others pulled back on merchandise, Nordstrom has kept the styles coming. Their buyers stayed sharp, scooping up wonderful wardrobe finds that were still pretty affordable -- that dress I liked was under $80 on sale, $120 at full price.

They focused on Nordstrom's classic strengths, which CEO Blake Nordstrom identified in the company's first-quarter earnings call as jewelry, dresses and women's shoes. And the shoppers came in droves. Inventory turns -- the number of times a year an item sells -- shot up. Faster turns means less merchandise ends up going on sale, and sales volume goes up.

Nordstrom's recent success isn't a story of customers flocking to lower-priced Nordstrom Rack, as you might expect in this economy. Though total sales are up in part because the company opened a dozen more Racks last year, the sales gain came mostly in established, full-line Nordstrom department stores.

In essence, Nordstrom gave the public affordable chic when they needed it most. They kept their shopping experience fun and full of new merchandise. It's a successful formula other department stores are trying to copy, but many aren't succeeding as well with it.

With less merchandise hitting the sales racks, Nordstrom deployed its sales more strategically and generated more excitement about them. An example is the chain's beauty-products sale, currently earning raves in the blogosphere for its great bargains.

The company also capitalized on smooth systems integration amongst its catalogs, ecommerce Web sites and stores. Some department stores still have disconnects between the various channels, but Nordstrom customers don't hit roadblocks as they hop from channel to channel. If they browse a store, and then go home and decide to order the item online, they can find it on the Web site. As more shoppers flit back and forth amongst these purchasing channels, Nordstrom is building loyalty.

Photo via Flickr user Chicago North Shore Related:
  • Carol Tice

    Carol Tice is a longtime business reporter whose work has appeared in Entrepreneur, The Seattle Times, and Nation's Restaurant News, among others. Online sites she's written for include Allbusiness.com and Yahoo!Hotjobs. She blogs about the business of writing at Make a Living Writing.

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