Nordstrom’s Multichannel Strategies Are Breaking New Ground for Retail

The first line of  “Recasting the Retail Store in Today’s Multichannel World,” an online study of 3,200 U.S. and U.K. consumers, states that brick and mortar is dead. Instead of saying it’s dead, the researchers might have noted that traditional retail is evolving into a multichannel shopping experience based on customer preferences.

While physical stores remain at the heart of retailers’ consumer relationships, the role that stores play has permanently changed in response to consumers’ multichannel preferences, the report notes. Therefore, retailers are challenged with approaching this new multichannel consumer in a way that maximizes value across all interaction channels.

What the multichannel consumer wants and how Nordstrom delivers it

Innovative retailer Nordstrom has been on an online retailer buying spree in an effort to be where its customers are going.

For instance, earlier this year Nordstrom bought a minority stake in gift e-retailer Wantful.com and opened a co-branded online store. The move represents its latest investment in a string of e-commerce ventures. In addition, Nordstrom struck an agreement with men’s apparel retailer Bonobos Inc. in April 2012 to sell its clothes on the Nordstrom e-commerce site. And in 2011 Nordstrom purchased HauteLook.com, a private sale site obtained specifically to stay current with fashion-conscious younger consumers who like social media and newer ways to shop online. 

The company is also expanding into mobile, which played a big role in both Nordstrom and Haute Look’s businesses. In fact, mobile solutions provider Xtreme Labs ranked the Nordstrom app as the third highest rated retail app on Android devices. And staying connected with consumers is one of the many reasons Nordstrom snagged the 16th spot on Fortune’s top 50 “World’s Most Admired Companies” list.

In addition, Nordstrom made a bold social move by clearly labeling certain products as ““top pinned items,” along with a clear Pinterest brand logo in stores. This shows customers which items are the most popular on Pinterest

Why developing a customer-centric approach works for Nordstrom, and why it will work for you

Today’s consumers expect a personalized experience; for them, this is what leads to forming positive brand relationships and long-term brand loyalty.

Per findings from more than 10,000 hours of voice-of–the-customer research (VoC) conducted by ERDM, consumers expect competitively differentiating personalized experiences to create brand relationships that drive repeat purchases. Here are three ways consumers define competitively differentiating customer experiences:

  • Improve the customer experience across every point of contact with your organization. This applies to all elements of the media mix.
  • Maintain high-quality experiences throughout the relationship—not just when you are selling.
  • Personalize customer experiences, including messaging, timing, frequency, and media mix, based on individual preferences. Online shoppers view personalization as a critical requirement for engagement.

Businesses must understand how shoppers shop and where they spend their time at every stage of the lifecycle

As I noted in “The Sales Funnel is Dead,” broadly speaking, consumers go through three steps in their lifecycle: research, purchase, and post-purchase. This process requires a well-integrated multichannel experience during pre-purchase and post-purchase. The post-sale customer experience delivered by most retailers is still woefully inadequate.

In addition, the study that I first cited states that online plays the largest role in the customer research phase because it enables customers to read reviews and find recommendations through social media. The study also notes that about 40%of consumers spend their shopping time online and via mobile devices. In fact, online sales were predicted to grow faster than store sales (17% versus 4%, respectively).

Key takeaways:

  • Multichannel shopping translates into more informed purchases and empowered purchase processes for customers. But companies must step up and enable customers to have these empowered experiences. Understand the journey customers take with your company from prospect to loyal customer, know what each segment requires, and create the means to deliver on your brand promise at every stage.
  • Multichannel shopping results in greater expectations of value from retailers. Consumers are shopping via a variety of channels and devices, often simultaneously. Research on your part will determine the mix of media your customers prefer and the value they expect each medium to provide.
  • Companies must maintain a consistent brand story across the multichannel mix. Your brand is your competitive leverage, but only when it’s conveyed—in every channel—as a uniquely valuable and differentiating experience for customers. A consistent brand story and experience is essential because customers become frustrated when information or brand attributes vary across different media.
  • Businesses need strategies for engaging customers across a complex and dynamic multichannel mix. Now is the time for an integrated cross media strategy that delineates how to engage consumers consistently and at every opportunity. To successfully establish multichannel relationships you need to understand how consumers define the role and the value of each medium. Then, create a truly integrated multichannel approach that leverages each channel’s strengths to build and reinforce the customer experience.
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