What: the department store uses them to stay relevant and attract younger customers

Why is it important: profit being a long haul for DTC only selling online, department stores constitute an interesting alternative

Department stores' place of relevancy has changed over the years. Before, for a brand to become known, it needed to be placed within a department store because that's where the consumer was shopping. Now that younger consumers are shopping online Nordstrom, in order to survive, cannot just cater to their parents. They have to cater to these young people.

Since 2012, when making a USD16.4 million minority investment into DTC menswear brand Bonobos, Nordstrom has inked partnerships with some of the hottest digitally native brands in the sector from Away and Thinx, to Kim Kardashian West's shapewear brand Skims, Everlane, Reformation or Goop. Some partnerships were even more interesting, by including exclusive products (Warby Parker Glossier and Boy Smells) or by complementing Nordstrom’s offer (Casper).

Nordstrom also has an extensive partnership with Rent the Runway. Select stores in Los Angeles in 2019 began serving as order pickup and drop-off locations Now, after the rental company announced in August that it's permanently closing its retail stores, the Nordstrom drop-off areas serve as one of the few physical touchpoints the brand has with customers.

It's become clearer that Nordstrom's relationship with digitally native brands is more and more important to its overall strategy aiming to attract younger shoppers into its physical stores. It will also allow Nordstrom to potentially win them over by doing what it knows best: customer service.

On the DTC side, as more digitally native retailers make their public debut on the stock market, and reveal their financial information, it's become clear how difficult it is to sell goods exclusively online and make a profit. The marketing costs associated with acquiring customers online has pushed DTC brands offline through temporary pop-ups, permanent locations or partnerships with traditional retailers.

'Relevance is key' Why Nordstrom has gone all-in on DTC brands