Jamie Nordstrom, President of Nordstrom Stores, participated in the Albers Executive Speaker Series on November 12 th . Nordstrom was appointed President of Nordstrom Stores in May, 2014. Prior to that, he was President of Nordstrom Direct starting in 2005. A fourth generation family member, Jamie began his career in the stockroom of the Bellevue, Wash. store in 1986. He worked in sales in shoes through high school and college, and went on to hold numerous positions with the company in store and buying management.
Jamie started his remarks by reviewing the history of the company and the work of the three previous generations of Nordstrom's to get it to where it is today. I take that back - he actually started his remarks by referencing the release of the company's latest earnings report that day, which had triggered a 20% drop in the stock price, so it was clear that being at Seattle University was going to be the best part of his day!
From its very beginnings as a shoe store, Nordstrom has focused on gaining customer loyalty, not around price, but around service. With that philosophy, it became a very strong brand in the Northwest. But in 1971, in order to facilitate the transfer of the company from the second to third generation, the family took the company public and that required growth. Thus began the nationwide expansion of Nordstrom to where today they have 320 locations in the US and Canada.
Despite the results of the last quarter, Nordstrom has to be considered one of the best retailers out there. Jamie provided insights on how they see customers changing and how they are responding.
Not all the Options - in the good old days, the customer went to the store and selected from the available options. Nowadays, a customer can check his or her phone for a wider selection. You must get better at providing more options (like locating items from other stores).
Informed Customer - in the good old days, you could tell a customer anything about an item and they would not know the difference. Nowadays, a customer can check his or her phone and know more than the sales associate, including prices at the competition.
Price Transparency - in the good old days, you would watch the prices of your competitor down the street. Nowadays, a customer can check his or her phone and find the price anywhere. All the more reason to compete on service, not price!
Jamie noted that when competing on service, one has to realize that the definition of great customer service is changing over time. Same day shipping and curbside pickup matter today but were not expected in the past. He also cautioned that customers are not so much looking for speedy service, as they are looking to control their time. He gave a great illustration of how in the good old days, you would call for a cab and wait and wait, wondering when it would arrive. Now you can use Uber and you can see exactly when the driver should arrive. Both could take the same amount of time, but you feel better about the wait for Uber.
In the question and answer session, he was asked when Nordstrom would be expanding outside the US and Canada. His answer was -- not any time too soon. They first have to get it right in those two markets and Asia and Europe seem to be well served these days.
When asked about preserving the culture of Nordstrom, Jamie said he likes their strategy of combining long time employees who have worked their way up (like him!) with new hires that bring new skills and experience at other organizations. The culture is to be nice to one another and support one another in taking risks and trying new things. While being nice internally, they also like to pound the competition and win! They emphasize that retailing is a "team sport" and you need to be part of the team.
Interestingly, he mentioned that our previous speaker, Alan Mulally, former President and CEO of Ford Motor Company, came to Nordstrom several years ago and spoke of his "One Ford" strategy. They realized that Alan was also talking about their culture, so since then they have started a "One Nordstrom" campaign!
When asked about the future of on-line retail, Jamie responded that e-commerce is in its infancy. He also noted that from 2005 to 2010 they ran the on-line business as a mature business, managing expenses and net income and not spending for growth. That changed in 2010 and now they are investing heavily in their on-line business, which has become their engine for growth.
A question was posed about which customer the company should be focusing on. Jamie noted that few customers buy only high end items. Instead, they mix and match items of different price points, so you will often see someone with $30 pants and $400 boots. It's not about getting all of someone's business. Instead of price, customers are really looking for something new (as I write this, I am wearing my new brown pants from Nordstrom for the first time!), so Nordstrom aims to provide the hottest and latest merchandise.
When asked about his leadership style, Jamie responded that the best leaders support people to be more successful. They make others believe they genuinely care about them and are invested in their success.
Finally, the question came about the stock price. Jamie responded that it was a bad quarter, with growth coming in at 1% instead of the 6-7% range they had been seeing, and it is not uncommon for a bad quarter to show up. The key to responding is to manage inventories through these ups and downs and he said they are very good at that. He added he felt very good about their ability to handle a bad quarter.
When it rains in Seattle, the turnout for the speaker series always takes a hit, but we had a very large crowd in attendance. That shows you the power of the Nordstrom brand among our students! Jamie is just one of four Nordstrom's at the top of the organization. Would the turnout have been any different if it were Blake, Erik, or Pete? Probably not, and the message would surely have been the same! It was an evening of great insights on the retailing industry!