Clearly from the financial statements Nordstrom needs more control over pricing. The inclusion of ProfitLogic for pricing optimization is one alternative for example, to better harvest demand at the optical price point.
Go after the $300+ denim market globally more aggressively and with more concerted strategies today. In their latest financials and in their latest earnings calls, Nordstrom reports that even they are even surprised by the number of $300+ jeans being sold. As Nordstrom has a stable $100+ range of denim, the company needs to consider building out a strategy of bringing in a new designer to add more flair to the jeans.
Focus on multi-channel management to ensure all customers have an identical high-quality experience with each Nordstrom touch point. The many channels that Nordstrom sells through including the Web, their stores, discount stores and boutiques makes for a challenging strategy of unifying responses across all channels. Nordstrom needs to focus on preserving their culture in these channels and actually promoting it.
Continued expansion plans yet focus on sales per square foot of $400 or more. The trending on this specific metric is critical if the company is to continue growing profitably and with a maximizing of their retail floor space. In 2007, sales per square foot were $365, high for the last twenty years, much far above the low of $319 per square foot in 2001.
Summary
Nordstrom is an excellent example of a company that has turned their culture into a strong competitive advantage and differentiator (Antonacopoulou, Kandampully, 2000).
Nordstrom's culture reinforces a much stricter set of norms and values than any manager could impart or enforce; that's because the employees tell each other they are different than any other retailer in that they focus on doing what in their good judgment will assist the customer best (Spector, McCarthy, 2001). While the company has challenges with growth in the future, their key metrics of performance, customer loyalty, customer lifetime value, and sales per square foot continue increasing due to the prudent and insightful use of pricing, supply chain, and product information quickly.
Appendix a Fiscal Year-based Financial Analysis
Nordstrom Inc. Ratio Analysis
Profitability Ratios
Return on Equity (%)
Return on Assets (%)
Return on Investment
Gross Margin
EBITDA of Revenue (%)
Operating Margin (%)
Pre-Tax Margin
Net Profit Margin (%)
Effective Tax Rate (%)
Liquidity Indicators
At the center of Nordstrom's success is their ability to create a culture that focuses on enhancing the lifetime value of the customer by delivering exceptional service and an attitude to do whatever it takes
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