Nordstrom: Adapting to New Consumer Behavior

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Nordstrom: Adapting to New Consumer Behavior Joseph Castillo Zuniga Bellevue College Author Note: This paper was written for Business 101, Section R, taught by Patrick Mcniff Nordstrom: Adapting to New Consumer Behavior Richard Jaffe, an analyst with Stifel Nicolaus & Co said that “the Internet is growing at the expense of brick-and-mortar stores” (Kapner, 2014). This has been true for several popular department stores including Nordstrom. At the end of 2013, Nordstrom finished the year with its third straight quarter of shrinking sales in its 117 full-line stores with a 3.3% drop in sales. However, don’t let these numbers fool any other competition because in fact Nordstrom’s total revenue increased by 3.23% from accumulating 12.15 billion in 2012 to 12.54 billion in 2013 (Marketwatch, 2014). So where did the other sales go if its full-line stores’ sales dropped? Well part of it is due to an increase in sales in its Rack stores due to the increase in amount of customers bargaining for prices due to post-recession behavior. But most of it is due to its 30% online sales jump which enabled Nordstrom’s total revenue to increase in the year of 2013. Unlike some of its counterparts, Nordstrom adapted to new shopping behaviors. Online shopping is definitely the newest and boldest trend for retailers. Nordstrom has actually been offering online shopping access since 1998. But it has now adapted to even newer technology that enables customer to shop easily by releasing its mobile app and has also remained competitive in the online market by offering free shipping and returns. In 2011 the outstanding department store decided to make one of its best decisions that is accountable for that 30% increase in online sales: the acquisition of HauteLook. HauteLook is a Los Angeles-based online retailer. Now Nordstrom’s acquisition of HauteLook was well planned and

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