What: Nordstrom plans to surpass 2019 sales in spite of a 20% drop in 2020, thanks to online and off-price.

Why it is important: While they started investing two decades ago in digital, putting them ahead of local competition, they realised that they needed to double-down on e-commerce capabilities. This goes through a technological improvement (improve the product discovery) and a business model shift, as finding new ways to partner with brands would allow them to increase their offer (including categories where they were not present, and lower-priced segment).

Norstrom’s strategic plan aims to increase sales in 2021 by 25%, surpassing 2019 and includes:

• A maintained focus on high-level omnichannel customer service, including expanding BOPI service to all Nordstrom locations, from Nordstrom local and Nordstrom Rack outlets for now,
• Widen the price range: keep its luxury positioning while also increasing its off-price offer (Nordstrom rack) by adding more lower-priced products, and make the most of its online capabilities (which still raises the question of making this profitable, as, BOF points out, even leaders TJ Maxx and Marshalls have not found a way to do so),
• Become less reliant on the wholesale model and boost e-commerce: Nordstrom will add new online business formats proposed to brands (drop-ship, e-concession, sharing revenue scheme) to reduce wholesale from 85% to 50% online, and encourage brands to increase the offer presented online from 300,000 SKUs to 1,5 million, especially on categories where they missed opportunities, such as home goods. The question raised by such a strategy is to know how a specific point of view will be maintained, which would be the reason why a customer would favour Nordstrom other more generic, and powerful, players such as Amazon,
• Leverage discovery tools to personalise customers recommendations by connecting profiles across platforms, after having centralised its analytical capabilities in 2018.

Analysts consider Nordstrom as the best-positioned American department store in terms of potential recovery once the virus crisis is overcome.

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