Nordstrom American Luxury Store Chain is reviewing its development strategy in the face of changing market conditions and a shift in consumer demand towards online channels. Flagship stores located in shopping mall areas generated only 38% of the company’s revenue in 2019.
The transition to the new formats will be accelerated on the back of recent events that have put pressure on the market since early 2020. During the first quarter, Nordstrom’s revenue fell by 40% to RUB 2 billion despite actual online sales, Fortune writes. As a result, the company was forced to adopt a plan for the most significant reduction in history – 16 department stores will close.
However, experts note that sales in the company’s luxury department stores have been gradually declining over the past few years, as customers went online, and brands were looking for omnichannel wars of interaction with customers. Other leading players, such as Saks Fifth Avenue, Bloomingdale’s, and Neiman Marcus, have faced similar problems.
To remedy the situation, Nordstrom opened small stores in a new format in critical locations, including New York and Los Angeles. Limited-range retail outlets are targeted at customers who have placed orders online. It is this strategy that has seen the enormous demand during the spring 2020 crisis.
The company also plans to actively use its 250 runoff stores, where customer traffic is recovering faster than in department stores, in its business process re-engineering efforts. The retailer offers its customers new services, including receiving and fitting orders made online.
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