What: Nordstrom’s off-price division is in expansion mode, rebranding, and correcting past mistakes.

Why it is important: The retailer will be opening 20 new locations that are more conveniently located to its customers while also rebranding to better communicate its value proposition and better meet customers’ expectations.

The Rack’s Q4 sales were down 8.1% compared to the previous year, but 2022 sales were up 1.1% to USD 4.8 billion from USD 4.76 billion in 2021. Nearly two years ago, the retailer took some strategic bets that didn’t yield successful results and is now looking to correct those mistakes.

Nordstrom Rack is now focusing its strategy on its value proposition, “great brands at great prices” as they learned that customers come to stores for great brands with a ‘price first’ mentality. The retailer is rebranding with a new logo, ads, and messaging that better communicate the value proposition and connect to the upscale Nordstrom name.

Additionally, the Rack is resetting its merchandise mix by prioritizing 50 well-known and productive brands that are already sold at the full-price stores. 90% of the top 50 brands at full-line stores are also carried at the Rack, making up 60% of what’s been ordered for the first half of this year.

The retailer is also focusing on its “Closer to You” strategy which advocates bringing conveniences to customers, through the opening of 20 Rack stores in nine states this year. Nordstrom found that customers won’t drive more than 15 minutes in the off-price world, making location extremely important.

Inside Nordstrom's strategy for Nordstrom Rack