At the 2022 NRF Big Show in New York, Nordstrom President and Chief Brand Officer Pete Nordstrom provided an overview of the retailer’s revamped merchandising strategy which recently included expanded assortments, the arrival of several direct-to-consumer brands and retail partnerships. competitors. One collaboration he discussed during the session was his new contract with Fanatics.
Last November, Nordstrom announced that it had formed a partnership with Fanatics to enter the sports licensing business for the first time. As part of the deal, Fanatics products became available on its website, Nordstrom.com.
“It’s interesting,” Nordstrom said of the Fanatics deal. “It’s a big business, and the whole sport is connected, whether it’s through colleges or professional teams. Our customers also buy this stuff.
The partnership, he said, has reduced risk for Nordstrom because orders are fulfilled and shipped by Fanatics, and Fanatics owns the inventory.
“We were able to enter into business with them in a way where we didn’t have ownership of the product, but can serve as a platform to offer it to our customers online and see where it takes us in stores. They have been excellent partners.
He said the Fanatics deal “reflects where we can go and how things have evolved and changed from the traditional legacy of businesses like ours.”
Another unique partnership for Nordstrom was announced last July with Asos to bring the UK-based retailer’s brands to its stores and allow Asos customers to collect and return its products from Nordstrom and Nordstrom Rack stores.
Nordstrom said the collaboration came about because it had existing business with Topshop, which Asos bought out of bankruptcy. In talks about continuing the partnership with Topshop, Nordstrom and Asos discussed a bigger opportunity with the retailer.
“As we spoke to them, it was inspiring and exciting to see how they do business and their clarity on who their customer is (their 20-something customer). We also have that customer in large numbers. And I think that every retailer here can understand that a big part of our job is to acquire it as well, and it’s about getting young customers to engage with your brand.
Asos sold online in the United States but did not have physical stores. This collaboration marked Asos’ first sale in another retailer’s store.
Nordstrom said the opportunity to add more brands and expand categories is partly because online has become a bigger sales driver for Nordstrom. Previously, the constraints created by the four physical walls of a store often capped expansion. For example, Nordstrom recently made a bigger push into the home and jewelry categories. In the past, expanding these categories would have meant reducing in-store shelf space for its core apparel and footwear offerings. Online shopping, which now accounts for about 45% of Nordstrom’s sales, “has paved the way for us to do more.”
The changes also reflect a more open mindset from Nordstrom’s management. The Nordstrom president remembers when previous generations of his family, including his father, wondered why the store was selling a “competing” brand like Brooks Brothers.
“The thing is, customers don’t see it that way,” Nordstrom said. “Customers look at it like, ‘I like this brand.'”
For example, he suggested Madewell, the J. Crew-owned brand that Nordstrom began selling in its stores in 2015. He quoted one customer commenting, “Wow, now I can buy my favorite brand from my favorite store.
Nordstrom is often the first, and sometimes the only, wholesale account of the hot DTC brands. Asked about its success in securing access to DTC brands, Nordstrom said the retailer delivers “lots of customers” and “high-quality customers” and allows DTC brands to avoid marketing expenses to reach those customers. clients.
However, he noted that all of these brand partnerships need to complement both sides.
“We’re interested and willing to work with new brands and have that sense of flexibility to do what we can to partner up, and that’s been great. The perfect scenario for us is to have a well-known and highly sought-after brand that you can’t find in many places. I don’t think we’re good at publicizing an unknown brand. But we are good at growing and improving a known brand… We welcome these opportunities to work with new brands like this. It’s a fun part of the job.
Photos courtesy of Nordstrom