Nordstrom: How to Succeed by Selling Just One Shoe - Case Study Example

? Nordstrom: How to Succeed by Selling Just One Shoe (Add (Add (Add Type of Retailer The Nordstrom is ified as a department store retailer offering a wide variety of product lines including clothing, accessories, cosmetics, fragrances, furnishings, jewelry, and handbags. A department store can be referred to as a retail outlet that intends to meet consumer’s personal and residential needs by offering a wide range of durable goods. In addition, a department store provides its customers with multiple merchandise lines at different price points. Generally, a department store offers products including clothing, jewelry, books, stationery, food, toys, home appliances, sporting equipments, paint, and gardening. As Coles (1978, p. 179) points out, one of the major characteristics of a department store is that this large scale retail organization will have several departments under the same roof; and each department/unit of a department store deals with a specific category of trade or product. Usually, department stores need huge amount of capital to commence their business and they are located in big cities and towns. Centralized management system is a general characteristic of a department store. This type of retail organizations keep their interior decoration and window display attractive and spend more on sales promotion. They provide a range of quality customer services including inspection of goods, convenient packages, home delivery and after sale services. Department stores sell products only on cash basis and generally they do not offer credit facilities to their customers to avoid the risk of bad debts. Finally, high operational cost is a common feature of department stores. Level of Service on the Continuum The Nordstrom tries to deliver best possible shopping experiences to customer regardless of store purchase, online purchase, or a mail order catalog. The Nordstrom management makes sure that its customers are treated with ‘love’ and respect. In the view of the industry observer Lior Arussy, “greed through love” is the business strategy of the Nordstrom; and the given case scenario clearly indicates that the organization has “perfected the art of focusing on the right customers and giving them undivided attention” (Nordstrom’s Success: Case Study). This strength would assist the company to satisfy needs and requirements of individual customers. A Nordstrom salesperson often continues the relationship with a client for many years. Nordstrom salespeople exchange their business cards with customers so as to provide them with better shopping experiences in future. According to McGowan (2006), Bozzuto’s Inc floral store is an example of a retail outlet that offers self service to full service on the continuum. The store mainly focuses on custom designs, weddings, and funerals. Although it has many full service departments, some of its stores have only just launched their business. The retailer starts its each unit as a self service and gradually develops the venture as a full service provider. According to Bozzuto’s floral category manager Jason Brancifort (as cited in McGowan, 2006), the firm’s biggest task is to prove that its every store can sell floral. Retailing Mix Product, price, place, promotion, people, and process are the six elements of retailing mix. As discussed earlier, the Nordstrom development store offers a wide category of product lines including clothing, accessories, jewelry, fragrances, cosmetics and foods. Hence, the organization’s product lines are potential enough to meet customer needs. It seems that the Nordstrom does not provide much price offerings to its customers and the company always tries to sell its products at full price. The firm gives specific focus on choosing a new business place. The case study indicates that the company’s president Eric Nordstrom ensures potentiality of a new business place himself before signing off on it. In addition, the company management scrutinizes available demographic and statistical information regarding a new business place. Eric Nordstrom says that “plenty of places look good on paper and we say no” (Nordstrom’s Success: Case Study). Likewise, the company adopts a different way of product promotion. It does not spend much money on conventional product promotion strategies including advertising as the company believes that mouth publicity is the most effective way of promoting a product. The Nordstrom management holds the view that stories spread by a satisfied customer can have more impact on sales promotion than an ad in the newspaper. Finally, the organization pays specific attention to sales-people development and continuous process improvement. Thus place, promotion, and people are the major retailing mix components which have been the most important to the company’s success. Challenges to Nordstrom The company cannot effectively integrate its sales channels and this situation raises many operational difficulties to the Nordstrom management. The case context (as cited in Nordstrom’s Success: Case Study) indicates that barriers between the firm’s sales channels notably limit its sales opportunities. For instance, customers who purchase Nordstrom products online are not allowed to return them in the retail store. Similarly, product categories offered online and in retail stores are often different and this situation causes many inconveniences to buyers. Hence, it is clear that either Nordstrom has not yet clearly understood online business or the company does not have adequate technological base to connect its sales various channels. Since today people are shifting towards online purchase, weaknesses in online sales practices are most likely to threaten the long terms sustainability of Nordstrom. Current Competition Trends As the case study indicates, the way people shop is dramatically changing. Hence, marketers are forced to alter their business strategies also to meet the changing customer expectations. In today’s market environment, customer gives specific focus to quality as well as price. As a result, every company strives to offer improved quality products at fairly low costs. Over the last decade, price has become paramount for business growth and therefore majority of retailers compete on price. Today most of the companies have home delivery units in order to provide customers with better shopping experiences and thereby retain them in the long term. AS Butler (2012) points out, retail market has been shifting toward online business for the last few years and hence retailing outlets are forced to give great emphasis to online marketing strategies. The major change in retail sector is that firms nowadays focus on online sales promotion techniques instead of adopting traditional promotional policies. In short, every area of the retail sector has been modernized so as to increase market competitiveness and thereby satisfy consumer demands more effectively. References Butler, S. ( 2012). Tesco and rivals turn against huge stores as internet shopping takes over. The Guardian. Retrieved from http://www.guardian.co.uk/business/2012/mar/04/online-shopping-changes-hypermarket-strategy Coles, J. V. (1978). The consumer-buyer and the market. USA: Ayer Publishing. McGowan, C. L. (2006). Store profile: Promoting the benefits of floral. Super Floral Retailing. Retrieved from http://www.superfloralretailing.com/october2006/storeprofile.html Nordstrom’s Success. (n.d.). "Nordstrom: How to succeed by selling just one shoe". Read More