Nordstrom SWOT Essay Example
Nordstrom SWOT Essay Example

Nordstrom SWOT Essay Example

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  • Pages: 9 (2328 words)
  • Published: September 12, 2017
  • Type: Case Study
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Since 1997, Nordstrom has been showcasing individuals with disabilities in their catalogs, which is a unique practice. This distinguishes them from other companies and demonstrates their dedication to inclusivity. Their approach involves not excluding any particular groups according to industry standards, thereby ensuring representation for all clients.

Nordstrom's acknowledgment of customers as individuals is extremely important. In an interview with O’Connell, it was stated that people with disabilities present a significant marketing opportunity, with $225 billion in discretionary income. Businesses that understand this idea will have a competitive edge.

Nordstrom stands out from other high-end retailers and department stores by focusing on a customer-centric approach to cultivate customer loyalty. In a highly competitive market, they provide premium fashion items at elevated prices, but it is their exceptional service that truly distinguishes them. To accomplish this, Nordstrom invests i


n exemplary staff who personally welcome customers by name.

Write personal thank you notes, make follow-up calls about customer satisfaction with merchandise, have large well-lit shops and fitting rooms, implement a price match system, and offer a generous no-questions-asked return policy, all aimed at ensuring maximum customer satisfaction.

Discover a survey on client service drive, client studies, and various market segments within Nordstrom. The company utilizes different trade names and merchandise lines in order to cater to different market sections and stay up-to-date with current trends.

These include: Rack, Haute Look, Treasure ; Bond, and Trunk Club. This provides mid-value market opportunities for online shoppers looking to join Nordstrom's exclusive high-value market and style offerings. It appeals to "give-back" shoppers.

Nordstrom offers an online shopping experience that gives employees access to stock lists and in-store seamsters. This advantage enables the company to

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grow its customer base and enter untapped markets, distinguishing it from competitors. In Q2 2014, Nordstrom Inc. reported a 6% rise in total revenue, outperforming other retail clothing rivals.

Nordstrom Inc. experienced a 13% increase in sales over the past year, surpassing its competitors' average sales growth by 0.99% in the same quarter. Furthermore, it attained a net margin of 5%.

4% company achieved higher profitability than its rivals. The strengths of the company include the Nordstrom Brand name and size. The Nordstrom brand has been around long enough to build relationships with suppliers and acquire exclusive brands to carry, as well as establish lines of distribution. This gives them an advantage over new entrants, as it is difficult to obtain licensing for exclusive brands and establish a distribution system without already being established. They also have an advantage in size, with 118 original Nordstrom shops.

Locations of Nordstrom Rack

Nordstrom Rack has 1 clearance shop and also caters to customers online in 96 countries through Additionally, they serve online customers through HauteLook and Nordstrom Rack is known for its high brand awareness.

The competitiveness of section and dress retail lies in convenience and practicality. Nordstrom stands out by offering unique and superior products, including high-quality brands that cannot be found at discounted retailers, creating an exclusive experience for customers. Additionally, Nordstrom sets itself apart from both direct competitors and restaurants by providing new experiences and introducing new brands through its Spa and Restaurants located in some of their stores. This differentiation is achieved by emphasizing quality and sustainability.

Our top priority is to ensure the best possible experience, both in terms of service

and responsibility. We have come across an article that explores the competition among restaurants and resorts and its impact on their revenue and dining establishments. In order to further enhance our presence, we have expanded our online reach to 96 countries and established separate websites for each of our shop brands. Additionally, we have developed a user-friendly app that allows for easy shopping via your phone.

Furthermore, they have embraced societal media, particularly Instagram, with their “Instalog”, and have ensured its smooth integration with their physical stores. They also recognize the importance of constantly evolving with their customers, as Jamie Nordstrom, the president of their shops, has emphasized the need for ongoing growth. Additionally, they are constructing fulfilment centers to expedite online shopping and have implemented RFID chips in order to maintain a continuous inventory system for both physical stores and online platforms.

Recognizing that their growth is coming from online sales, Nordstrom has invested more in online growth compared to physical stores. They anticipate that in the next few years, half of their sales will come from the Rack and their online units, compared to the current 38 percent.

" and that's because "the U. S. Commerce Department estimates that electronic commercialism amounted to 6. 2 per centum of entire retail gross revenues in the first one-fourth of 2014. " Analysts have besides been stating Nordstrom has thrived compared to rivals because it is a innovator in fringe benefits like free transportation and besides holding the alone diverseness of merchandises online. Their enlargement into Canada this twelvemonth besides gives them an advantage against rivals who have non branched out internationally yet.

This allows Calgary shoppers to access their

market, thanks to Canada's robust economy. It is a country that lacks luxury goods, making it an untapped market. These shoppers are already familiar with the brand and are expected to frequent a total of 5 Canadian stores within the next 2 years, assuming their expansion remains positive as it did during their initial opening.

They will continue to maintain their superiority over their competitors.


Due to Nordstrom's primary focus on customer service and price matching, they are susceptible to being directly affected by price fluctuations and economic trends. The market fluctuations are beyond Nordstrom's control, but their choice to match prices is an internal decision that exposes them to vulnerabilities. To avoid this weakness, they should consider revamping their pricing strategy to maintain competitive pricing without relying on price matching, as it directly competes with the market.

Offering free transportation not only improves customer loyalty, but it also has a significant cost for the company. This weakness stems from the company's internal decision to make this sacrifice for the overall benefit of the company and absorb the expenses. However, it becomes challenging to measure the direct impact of customer loyalty due to the presence of free transportation. Nordstrom has the opportunity to invest more in their credit business, as many of their competitors have greater resources in this area, giving them a competitive edge. While the competition is external, Nordstrom's failure to prioritize their credit business is a weakness. The company must assess how they allocate their resources to determine if there is room for additional investment in this sector and whether it would yield sufficient benefits.

Opportunities: Already operating in 96 countries through their online retailing.


is still expanding in the country, as new innovations keep the market on edge. They plan to improve their delivery speed and provide a personalized experience through their mobile app and in-store service, aiming to outperform competitors. They have already launched an app earlier this year and are also looking to introduce Nordstrom Rack in Canada through Instagram and various online stores.

The company intends to invest $150 million in its online retailing. They aim to hire up to 400 individuals for their e-commerce group, which includes Kirk Beardsley, the former manager of concern development at Amazon. The acquisition of HauteLook has enhanced their capabilities in e-commerce, and they are actively seeking opportunities for further expansion through integration.

The company has achieved a 20% increase in profits during the first quarter of the year, surpassing comparable stores that only saw a growth of 6.4%. This achievement is credited to their agility in entering new markets, specifically the price reduction trading market, and effectively leveraging technology to expand their online presence.

Online trends and consumer preferences are constantly changing, so staying competitive in the online retail market is crucial as it currently outperforms physical stores. Nordstrom is currently taking steps to secure their supply chain in a resource-limited world by investing in recycling, transportation paper and packaging, and energy.

Waterlily believes in promoting human rights, organic nutrients, and community support. They are committed to enhancing social and environmental sustainability through corporate social responsibility and supply chain management, catering to the needs of environmentally conscious markets. The opening of their stores in Canada marks their entry into international markets, indicating the company's stability to take on these new roles in

the market.

According to government data, the countries they plan to expand in have a good economic system with a high average household income of $ 90,000. This is the highest in metropolitan areas in Canada, providing the company with the opportunity to expand and capture their market.

There are existing programs to expand beyond Canada. However, if they succeed in doing so, it will create new opportunities for the company to venture overseas. Additionally, Nordstrom will open Nordstrom Rack stores in Canada after achieving their goal with regular stores. This will provide opportunities to attract middle-class Canadian consumers who desire designer brands at discounted prices. Continuously being an innovative brand will serve as a chance for Nordstrom to benefit. They have introduced a new private-label brand that will donate 5% of its profits to Girls Inc.

Multiple not-for-profit organizations, including those dedicated to empowering adult females and young girls, are receiving authorization. This trend is happening as the "give-back" movement gathers strength. Nordstrom, a charitable boutique named Treasure & Bond, was established in New York's SoHo district in 2011. With physical stores across the country and an online presence, Treasure & Bond actively promotes their mission of giving back. This enables them to continuously stay up-to-date with trends and remain competitive in the market.

Nordstrom has the chance to sustain its effective strategy in addressing and conquering these obstacles. Disposable incomes in the US are growing, reaching a record high of 13021.20 billion in June 2014, compared to the previous month's 12969.70 billion. This suggests that spending will keep rising, and Nordstrom should position itself as the favored brand to capitalize on these sales.

Their online presence, expansion,

and excellence require additional enhancement. Their marketing strategy heavily depends on word of mouth, which may need reassessment to ascertain its effectiveness in promoting the brand while upholding their prestigious image. The sales per square foot vary across companies, as well as their capability to stock and manage inventory.

Having higher turnover rates than your competitors is a valuable advantage in the retail industry. In 2013, Nordstrom had the highest sales per square foot at $400, compared to Macy's at $173 and Saks Fifth Ave at $350. Nordstrom's strength lies in their ability to stock more merchandise in a limited space and achieve faster turnover rates than their competition.

Threats: The department store and apparel industries are highly competitive, with Bloomingdale's and Macy's being direct rivals of Nordstrom.

As consumer preferences shift and incomes rise, the market will become increasingly competitive for Dillard's, Saks Fifth Ave, and Neiman Marcus. This will create numerous opportunities for each company to leverage. Additionally, Nordstrom faces indirect competition in the form of food service.

Watering place dress shops, price reduction retail merchants, on-line retail merchants, and forte shops all contribute to significant competition in the industry. This competition is influenced by factors such as client service, manner tendencies, choice quality, environment, location, and convenience. The company must also consider potential threats when making decisions, including plans for growth, market share, pricing, and supply chains.

There is competition for Nordstrom's recognition business from banks, credit card companies, and other stores that offer a store card like JCP, Saks, and Dillard's. Additionally, there are trade name image and much more.

Macy's and Dillard's pose a significant threat to Nordstrom due to their superior financial resources in the

retail industry. This threat extends not only to Nordstrom's operations in the US but also to their expansion into the Canadian market. The growth of the US economy and increased consumer spending further exacerbate this threat, as highlighted in the opportunities column.

Despite the potential impact of a turbulent last decade on Canada's economy, every business, including Nordstrom, faces the threat of an economic downturn. Therefore, it is advisable for Nordstrom to consistently establish realistic expectations and plans for such situations. Additionally, price fluctuations and rising costs also pose a risk to Nordstrom's supply chain of designer and high-end brands.

Instability in the market for materials, labor, and transportation is caused by global climate changes and resource shortages.

Nordstrom faces a potential risk of incurring higher costs without the guarantee of increased sales or profits. Moreover, they lack control over the environmental impact on their business. The expansion of online retail, especially Amazon's dominance, poses challenges for Nordstrom. Adapting to ongoing technological advancements swiftly and consistently is a challenging and expensive endeavor.

Nordstrom is confronted with the task of successfully adjusting to and consistently fulfilling market demands. Their utilization of state-of-the-art technology in repositioning themselves online and via social media has shown encouraging potential. Nonetheless, it remains to be seen whether they can sustain their leading position or fall behind the industry. The Canadian market, where they have recently entered, experiences fierce competition within the luxury segment.

There is a non-sufficiently claimed luxury market in Canada, and Hudson’s Bay Company, rooted in Canada, recently acquired Saks with plans to bring them to Canada. This acquisition poses a significant threat to Nordstrom's share of the luxury market in Canada. Additionally, Holt

Renfrew, a 177-year-old brand, has announced expansion of its luxury store in Calgary.

The second Canadian Nordstrom is located in the same area as the first one, posing a direct threat to their business in Canada. This expansion will determine their ability to capture and retain market share. Moreover, there is a limited pool of talent in Canada due to the relatively small luxury market, resulting in a scarcity of experienced individuals. Additionally, the average salary in the region where they are situated is higher due to the abundance of oil-driven jobs in Calgary.

Therefore, they will also experience an increase in labor costs.

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