eCommerce

Nordstrom Makes Trunk Club A Bit More Costly As It Tightens Up eCommerce Operations

Nordstrom’s Trunk Club is going to get a bit more spending, as the service is now charging a $25 try-on free and shortening the window for returning unwanted goods.

The latest update to the terms of service indicates that the $25 fee can be credited toward a purchase and that items that are not bought must be returned within five days. Previously, Nordstrom customers had 10 days, and the try-on was complementary.

Trunk Club has been counted as one of the bigger eCommerce winners of late, as it managed its exit via a $350 million acquisition by Nordstrom. Since launch, the program has expanded to cover women’s clothing and accessories. But since that high-profile purchase, Trunk Club has yet to turn a profit for its new parent (it is the one unit of Nordsrom that has not), according to reports in Chicago Business Journal, and apparently, its tolerance for the service as a loss leader has run out. Nordstrom was one of the first brick-and-mortar shops to offer free shipping and free returns, though, these days, it looks like it is working hard to tighten up its eCommerce operations and cost structure.

The souped-up requirements come following Nordstrom’s closure of Trunk Club’s large Chicago-based fulfillment center. Further announced measures to increase the margins on eCommerce sales are limiting online offerings to include only best-selling items and to improve its supply chain.

The good news is there is some early evidence that the moves are working, as Nordstrom saw Q2 results that were a marked improvement on Q1. However, those improvements still represent losses. Nordstrom same-store sales fell 1.2 percent in Q2, which was better than expected but still heading in the wrong direction.

But the retailer has also shown strength. ECommerce sales continued to show double-digit growth and the off-price Nordstrom Rack line and flash-sales site HauteLook saw big growth — a 5.3 percent increase in same-store sales and an 11.2 percent jump in net sales, respectively.

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