Nordstrom Inc. today announced a new business strategy called Closer to You, in which the department store leverages key lessons learned from COVID-19, including an increased focus on digital and the off-price business.
Presenting the virtual investors today in 2021, CEO Erik Nordstrom said the retailer’s digital revenues have already increased – from 30% in 2019 – and represent 50% of its total sales. As the company researches fundamental changes in demographics and the preferences of its core customers, it expects Nordstrom Rack – and its connectivity to core stores – to grow in importance.
« [Our] new direction is focused on the full Unleash the power of the first digital platform we built by significantly expanding the openness of who we serve and where and how we serve them, ”Erik Nordstrom told investors. “We have two powerful, interconnected brands that offer our customers a unique value proposition. We have built on this advantage through the investments we have made to create a connected experience for our digital and physical assets. “
connected
Black History Month 2021: Keeping Promises to Do Better
Should department stores follow Saks’ lead and outsource their digital businesses?
How Nordstrom, Patagonia, Kith, and more retailers honor MLK Day
Since the announcement of the market strategy in 2018, the head of Nordstrom has expanded the integration of Nordstrom Rack « faster than planned ».
« Nordstrom Rack is the leading price target and offers sought-after products and a treasure hunt at one convincing price Price, « he added. « It is important that Nordstrom Rack also serves as the entry point into our platform as the largest source for [newcomers] of Nordstrom customers. » Regarding the general digital acceleration, the chief executive pointed to the continued acceleration of omnichannel services such as online purchase, in-store collection, roadside collection and contactless payment options; and efforts to expand the company’s dropshipping capabilities.
“We started collecting orders online at Nordstrom more than ten years ago enables store fulfillment and further scales and optimizes the customer experience, ”he said. « In particular, we recently added Nordstrom and Nordstrom Rack to fulfillment and order pick-up. »
The board said the company’s strategy was limited to three areas: Extending the rollout of its market strategy to its top 20 Markets representing 75% of sales and integration of Nordstrom Rack’s assets; Expanding Nordstrom Rack’s reach by expanding its price range and better linking physical and digital inventory to grow additional revenue to $ 2 billion over the long term; and increasing the « digital speed » of the overall business of Nordstrom Inc.
Overall, Nordstrom expects medium-term sales of 17 billion US dollars. Expansion of profit margin with the potential to maintain EBIT margin at 6% or more in the future; a « significant improvement » in ROIC; and « consistently » generate an annual operating cash flow of more than 1 billion US dollars.
Nordstrom today reiterated its outlook for the fourth quarter of 2020 and continues to assume that sales for the reporting period will be in the low range of 20% compared to decrease compared to the previous year and the operating cash flow and earnings before interest and taxes will be positive. The company also unveiled its financial outlook for fiscal 2021, calling for sales growth of more than 25%, including retail sales and credit card revenue, with digital accounting for 50% of total sales and positive EBIT.
© 2021 Fairchild Publishing, LLC, a subsidiary of Penske Business Media, LLC. FN and Footwear News are registered trademarks of Fairchild Publishing, LLC. All rights reserved.
Supported by
WordPress.com VIP
Ref: https://footwearnews.com
