Nordstrom’s salespeople are typically well groomed and dressed, polite and helpf

Question

Nordstrom’s salespeople are typically well groomed and dressed, polite and helpful, and known for their attention to detail. They are selected for their ability to interact with customers in a positive way. During the inter- view process for new employees, one of the most important questions asked of candidates is their definition of good customer service. Thank-you cards, home deliveries, personal appointments, and access to personal shop- pers are the norm at Nordstrom. There is a no-questions-asked returns policy, with no re- ceipt required. Nordstrom’s philosophy is that the customer is always right. The company’s salespeople are also well compensated, with good benefits and commissions on sales that range from 6.75% to 10% depending on the department. Top salespeople at Nordstrom have the ability to earn over $100,000 a year, mostly in commissions. The customer service ethos is central to the culture and organization of Nordstrom. The organization chart is an inverted pyr- amid, with salespeople on the top, and the CEO at the bottom. According to the CEO, Blake Nordstrom, this is because “I work for them. My job is to make them as successful as possible.” Management constantly tells stories emphasizing the pri- macy of customer service at Nordstrom in order to reinforce the culture. One story relates that when a customer in Fairbanks, Alaska, wanted to return two tires (which Nordstrom does not sell), bought a while ago from another store on the same site, a sales clerk looked up their price and gave him his money back! Despite its emphasis on quality and luxury, Nordstrom has not taken its eye off operating efficiency. Sales per square foot are $400 despite the large open-plan nature of the stores, and inventory turns exceed 5 times per year, up from 3.5 times a decade ago. Both of these figures are good for a high-end department store. Management is constantly looking for ways to improve efficiency and customer service. Today it is putting mobile checkout devices into the hands of 5,000 salespeople, eliminating the need to wait in line at a check- out stand.

a. Describe Nordstrom’s market segmentation strategy.

b. Explain Nordstroms’s source of competitive advantage in terms of cost, differentiation, and added value.

c. Explain the strengths and weaknesses of nordstronr’s approach to implementing its “generic” strategy.

Explanation / Answer

Market Segmentation refers the process of dividing the total heterogeneous market into small and accessible homogeneous segments in order to cater particluar needs of that segment.Nordstrom has managed to make service its strongest selling point, and it certainly seems to have been the smart choice.

Nordstrom segmentation strategy base was derived by using geographic, demographic, and psychographic segmentation. The resulting customer base is comprised of people in suburban and urban areas, young adult to middle aged, with a mid to high steady income, female, sophisticated and fashionable, and Caucasian.

Based on Nordstrom’s marketing strategy, it seems clear that they are, and will continue to be, a very successful company. They have created a clear competitive advantage over their competition by offering excellent customer service and flexible return policies. Most people are well aware of the Nordstrom brand and its’ reputation for quality and service. In addition to the quality of its products and services, Nordstrom stores offer a comfortable and friendly atmosphere. Stores are decorated with sleek, sophisticated, classy, and streamlined decor that make the shopping experience relaxing and enjoyable.

The customer focus at Nordstrom has led to the retail giant having a reputation for an absurdly great customer experience design. In fact, the Nordstrom marketing strategy uses customer experience design as a key difference maker. The company is perhaps as known as much for its experience design as it is for the merchandise it sells.

Nordstrom has managed to make service its strongest selling point, and it certainly seems to have been the smart choice. Nordstrom truly sets itself apart with its exceptional customer service, and its top-quality salespeople. Above all else, the service Nordstrom offers is what sets the company apart from its many competitors; Nordstrom has long set the bar that other companies look to for what they should be doing.

Nordstrom's largest competitive advantage is their customer service. You can order any of their products online and have them shipped to their store for free. Also, they have good tailors and cobblers to repair any item you may have purchased there. I purchased a purse from them, after a year, the zipper didn't work, so their cobbler repaired it for free. One of the more famous stories of Nordstroms return policy is when a customer purchased snow tires from a tire store. The tire store later went out of business, and Nordstroms purchased the building and land. The customer who purchaed the snow tires, returned to the defunct tire store (then Nordstroms) and attempted to return their snow tires. Nordstroms accepted the return.

some of the strengths of Nordstrom are –

Weaknesses

Nordstrom is best understood as a “best in class” retailer driven by established merchandising expertise, strong execution, first mover advantage in its omni-channel initiative, and targeted demographic and geographical positioning. Nordstrom pays close attention to what consumers want, and reacts quickly and appropriately.

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