Digital Transactions Now 37% of Nordstrom’s Total Sales, CEO Says

Digital sales are climbing steadily at Nordstrom, and displaying a consistent upward trajectory.

During the company’s second-quarter earnings call Tuesday (Aug. 27), CEO Erik Nordstrom said digital sales increased 6.2%, accounting for 37% of total sales and the fifth consecutive quarter of improvement.

“As we have shared previously, growing the digital customer journey is a key part of our strategy to drive Nordstrom banner growth,” Erik Nordstrom said during the earnings call. “In April, we successfully launched our Marketplace and have since added over 15,000 items to our digital offering and nearly 100 new brands. While we’re pleased with the initial response from our customers, Marketplace is not yet a material driver and we will continue to scale it in the months ahead.”

Nordstrom’s second-quarter sales increased 3.4%, to $3.78 billion while comparable sales grew 1.9%. Nordstrom Rack grew its sales 8.8% while its comparable sales rose 4.1%. During the second quarter, Nordstrom opened five new Rack stores, bringing the year-to-date total to 11, with 12 more new Rack stores set to open before the holiday season.

“The Rack banner’s digital business is a differentiator in off-price retail, enabling our customers to shop when and how they want,” Erik Nordstrom explained. “We’ve built and refined industry-leading digital capabilities at NordstromRack.com, which delivered strong results in Q2. An expanded merchandise offering of great brands at great prices, combined with a focus on in-stock rates, drove the results.”

Erik Nordstrom pointed to enhancements to search and discovery, a balance of price points, particularly online, and a focus on in-stock rates as key elements sparking digital growth.

“It works for us because it’s a part of our bigger ecosystem,” he said. “We see more opportunities to engage more with consumers and gain a larger share of wallet.”

Nordstrom’s biggest event of the year, its Nordstrom Anniversary Sale, was held from July 15-Aug. 5 and included new arrivals from the most coveted brands across women’s, men’s, children, beauty and home on sale. Nordy Club loyalty card members had Early Access beginning July 11.

“Our Anniversary Sale is a unique event that rewards and engages our customers with brand-new product from the best brands, marked down for a limited time,” Pete Nordstrom, the retailer’s president, said during the call.

“The sale is meaningful to our best customers, who look forward to the event each year. We are always humbled by the stories we hear from customers every year. We have learned about generations of shoppers that make the sale an annual family event, planning their summer activities around it.”

Pete Nordstrom noted 75% of the company’s Icon and Ambassador Nordy Club members participated in the sale.

“Anniversary sales were driven by newness and fall fashion from the brands that matter most to our customers, including our Nordstrom private brands,” he added. “Growth in beauty sales provided support to anniversary success, and the active category, which includes shoes and apparel, continued to show strength throughout the event, registering double-digit growth.”

Nordstrom officials remain focused on expanding its New York City flagship, which is the top-performing store year-to-date. Notably, the first Icon Lodge has opened to cater to the highest tier of Nordy Club members, offering a premium experience with complimentary food and drink.