NORDSTROM RIDES HIGH

CASE STUDY 1.2 NORDSTROM RIDES HIGH

                Nordstrom, the high-end clothing retailer headquartered in Seattle, recently marked its twenty-seventh consecutive month of sales growth as annual sales reached nearly $10 billion and market share grew despite the company’s aversion to price markdowns. Competitors such as Saks, Macy’s, and Gap struggled during the recent economic slump.

                Nordstrom, founded in 1901 and still family-run, boasts 117 full-line stores and more than 100 Nordstrom Racks outlets. It has high expectations for its burgeoning online operations and has begun expanding overseas, but cautiously, to nearby Canada. A few key elements have always differentiated the chain. Perhaps the best known is its commitment to outstanding customer service, which some say the company practically invented. Regularly ranked near the top in customer satisfaction surveys, the company rewards its sales associates for their attention to customers with generous pay and tradition of promoting from within. It also provides superior sales tools, such as an unrivaled new inventory system that allows salespeople to quickly find what customers want. The system changed the way the store’s buyers worked, but the results were worth it.

                “We’re not trying to make a buck and move on to the next thing,” says Peter Nordstrom, in charge of merchandise. “This is our life. We do not want to be the generation who screws it up.”

Questions for Critical thinking

1.       How does Nordstrom differentiate itself from other clothing retailers?

2.       What makes Nordstrom salespeople stay with the company?

Appendix D      Developing a Business Plan                                                                                                                     Road ID Will Speak for You

When Edward Wimmer was a college student training for a marathon, his father's advice to “wear some form of ID” while running didn't impress him until he suddenly had to jump into a ditch to avoid an oncoming truck. Then the wisdom of his father's words struck him. “I was almost hit by a truck and nobody knew where I was,” he recalls.

After graduating, Wimmer came up with engravable Velcro-equipped tags that attach to wrists, ankles, running shoes, and even dog collars. Partnering with his dad, he created a company called Road ID, whose products have become popular among athletes who travel light while training, often leaving identifying items such as cell phones and wallets at home. Some loyal customers are simply proud of their sport. “Every cyclist wears one of these,” says the owner of one Georgia triathlon shop. “I wear mine all the time. It shows who you are. It is like you are saying, ‘I am a cyclist.’”

On the practical side, the identification and vital statistics engraved on Road ID products have proven invaluable for athletes who have suffered an illness or accident that left them unable to communicate while competing or training. Testimonials on its Web site attest to the benefits of wearing “some form of ID.” Says Greg Friese, an emergency medical services educator who works with the firm, “There is nothing worse than having a John or Jane Doe as a patient.”

Started as an online business, Road ID has updated its business plan several times, not only because it keeps outgrowing its headquarters and has seen its sales increase about 50 percent a year since 2002. First it expanded from the Web site to small kiosks in sporting goods stores. Then it began sponsoring thousands of running and cycling events and set up promotions on Facebook and Twitter. Currently it's reaching out to first responders with Friese's help. That fits well with Road ID's two-part mission statement: “One, to educate outdoor enthusiasts … about the importance of wearing ID. Two, to provide these athletes with innovative identification products that they will want to include as part of their gear.”

Wimmer hopes to make ID as common as seatbelts and sees continued growth ahead, so more changes in the company's business model are probably likely.1

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