Retail

Nordstrom Beats Q1 Estimates Amid Focus On Digital

Nordstrom

As Nordstrom ramps up its digital efforts, the department store retailer reported better-than-expected first-quarter earnings. The company reported earnings per share of 51 cents and revenues of $3.47 billion, compared to 44 cents and $3.46 billion.

On Thursday (May 17), Co-President Blake Nordstrom said in a post-earnings conference call, “Our first-quarter results reflected our ongoing efforts to integrate our digital and physical assets to serve customers in new and relevant ways. Our overall sales performance was in line with our expectations.”

The retailer delivered total sales growth of 5.8 percent, but the company also saw an 18 percent increase in sales enabled through digital capabilities compared to the previous year. The digital efforts are intended to expand customer reach, as well as engagement that “uniquely positions us to increase market share and drive growth,” Nordstrom said in the call.

In its top markets, the retailer is further integrating digital and physical assets across areas of its supply chain, technology, marketing and merchandising. The goal is to deliver differentiated services and experiences, Nordstrom said.

As part of its digital efforts, the company has recently named Ken Worzel as chief digital officer. Nordstrom said, “Ken is instrumental in driving our digital strategy as we continue to evolve our business. He will also continue in his role as President of Nordstrom.com.”

The company also opened a full-lines men’s store in Manhattan three levels and 47,000 square feet that is chock-full of the latest service experiences, such as express return kiosks, same-day delivery and buy-online/pick-up in store.

“We know a market like New York doesn’t need just another place to buy a pair of pants,” Peter Nordstrom, company co-president, had told The New York Times.

The store, which is near many luxury apartments under construction, will feature both shoe shiners and digital screens that can show custom-made jackets on a shopper’s avatar. In addition, the store has multiple tailors on staff. Shoppers can even make returns through digital kiosks without interacting with a staff member.

In terms of inventory, the location stocks men’s clothing, along with shoes and grooming supplies. The store stocks items at a variety of price points, including Samuelsohn suits  starting at about $1,000  and Vans sneakers at around $50.

“We’re off to a good start,” Nordstrom said on the call, adding that Manhattan is a “premier retail destination” and noting that the men’s store opening comes ahead a planned New York City flagship store that is scheduled to open in the fall of 2019.

In its off-price business, the company has rolled out Nordstrom Rack in Canada. It has already seen “terrific results” from three store openings in the Toronto and Calgary markets and is looking to open three more Canadian stores in the fall.

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