Customer Service Drives Nordstrom

Consumer insight on customer service driving growth

Nice article in a recent edition of the San Francisco Chronicle entitled, “Nordstrom’s Customer Service Catalyzes Growth” (http://bit.ly/nheF0o).

John W. Nordstrom took his Alaska gold mine stake and opened a shoe store in Seattle in 1901.  In the 1960’s the store added women’s wear.  Mens and children’s clothing followed shortly thereafter.

Today, a total of 116 stores are run by four members of the fourth generation of Mr. Nordstrom.  The family owns 25% of the shares of stock.  In 2010, Nordstrom generated $9.7 billion in revenue — a 12% increase during a recession.

Rather than dividing the store by brands, Nordstrom is divided into lifestyle sections that make it easier for customers to put together outfits.

In the 1980’s, Bloomingdales’ sent one of their floor managers to Seattle to conduct intelligence on Nordstrom.  When the visitor asked to see a pair of shoes, the salesman brought six pairs.  When asked why, the salesman responded, “to give you more options, just in case.”  Bloomingdales and Saks now do the same thing.

Nordstrom salespeople tend to stay with the company.  Nordstrom promotes from within.  Many employees start out part-time during the summer or while they’re in college and ending up staying for their entire career.

Nordstrom pays a 6.75% commission on a draw system so sales people get the greater of their base pay or commission.

To keep pace with online retailers, Nordstrom began giving their salespeople a single, electronic view of the chain’s entire inventory and access to all of it.  According to an analyst at Sterne Agee & Leach, the inventory system is “above and beyond” any other high-end retailer.

As a retail executive noted, Nordstrom has succeeded by making customer service the good they’re really selling.

Yet another example of customer service driving growth during the recession.

What can you learn from Nordstrom to improve the level of service you provide your customers?

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About Insights From Analytics

Integrated marketing professional who generates insights from analytics to increase revenue. Daily blog now resides at www.insightsfromanalytics.com/blog.
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