Deep Dive Into the Retail Personalization Index: Nordstrom

They’re generally massive organizations so it’s not surprising that department stores often struggle with transitioning to the digital world. You may not know that if you’re a Nordstrom shopper.

Patrick McCarthy, who retired from the company after 30 years as their top seller of all time, wrote the book on Nordstrom’s world class customer service. Literally. He teamed up with business writer Robert Spector to publish The Nordstrom Way to Customer Service Excellence in 1996. And when service is a company’s key differentiator, they’ll do everything in their power to perfect the customer experience.

That was apparent when we launched the Retail Personalization Index, where Nordstrom tied for fifth with eBay and REI. The brand’s digital experience includes a highly-personalized onboarding that filters data across channels, robust editorial content, relevant retargeting, and same day abandoned cart emails. Nordstrom’s product recommendations, which often include complementary items to “complete the look”, go beyond collaborative filtering, which we called out in our guide, Crossing the Digital Divide: 6 Best Practices for Department Stores and Marketplace Retailers.

Nordstrom Personalizes On- and Offline Shopping Experiences

In stores, Nordstrom deploys personalization with beacons that alert customers when items from their carts are back in stock nearby. Additionally, sales associates have access to their browsing data in order to make better recommendations.

Nordstrom beacons

Omnichannel is a strong point for Nordstrom, which has 9 million loyal customers who regularly shop on multiple channels. Speaking of loyalty: according to the brand’s most recent Security and Exchange Commission filing, Nordstrom Rewards has increased 35% since 2016. And members account for more than half the brand’s sales.

Over the past year, email is where Nordstrom saw the biggest improvement. Today, they personalize welcome streams, which note acquisition sources and other sign-up data. These omnichannel investments are paying off; the company saw its best performance since 2015 during Q2. Thanks to that boost in revenue and sales, Nordstrom is valued at a whopping $14 billion.

Going forward, we expect to see even more enhancements. In March, Nordstrom acquired a personalization-focused conversational commerce platform and a digital selling tool called BevyUp. The latter is made for mobile clienteling and incorporates a special app for salespeople that will launch later this year.

2018 Retail Personalization Index

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