Nordstromfinalbook

Page 1

NORDSTROM


“Never judge a book by its cover; open it up. If you treat a kid who is buying a $19.95 belt the same as a businessman buying a $1,995 Oxford suit, you will be successful. That kid might become a customer for life.” Project Brief

The purpose of this project was to obtain an in depth knowledge of a retailer of choice with the goal of creating a 6 month buying plan for said retailer. Kelly Murphy and Annika Dupree collaborated over a time period of 10 weeks in order to research an internal and external analysis of Nordstrom and interpreted that information to form a corporate buying plan, as well as plans for two individual Nordstrom stores, and an assortment plan for women’s shoes.

~Robert Spector The Nordstrom Way to Customer Service Excellence


Contents Early Beginnings Brand Identity Size and Scope Product Category Customer Profiles Competitors SWOT Buying Plan Assortment Plan Risk Statement

04 07 10 13 15 19 27 31 37 51

04 Early Beginnings


In 1887, a 16 year old John W Nordstrom arrived

in the US from Sweden in pursuit of the American dream. This dream became a reality in 1901, when he joined forces with Carl Wallin and the dynamic duo opened Wallin and Nordstrom in Seattle, Washington. Initially a shoe shoe, Wallin and Nordstrom rapidly expanded and soon encompassed everything from shoes to apparel for men, women, and children. The company was passed down from generation to generation of Nordstrom sons and was eventually renamed Nordstrom Inc. Today, Nordstrom continues to prosper as a major department store and is famous for its excellent customer service.

05

04

06


07

Core Mission “At Nordstrom, our goal is to provide outstanding service everyday, one customer at a time.�

Brand Identity 08


Nordstrom centers their core

mission based on the philosophy of founder John W. Nordstrom with his belief that the customer should be offered the best possible service, selection, quality and value. They fulfill this mission in all aspects of their customer service from returns to daily encounters with customers.

09

10 Size and Scope


In terms of the retail segment, Nordstrom Inc operates Nordstrom, Nordstrom Rack, Hautelook, Jeffrey Boutique, and Truck Club Men’s Outfitters. In the credit segment, Nordstrom operates a federal savings bank, Nordstrom FSB, a private label credit card, two co-branded Nordstrom Visa credit cards, and a debit card for Nordstrom purchases.

11

78,000 employees 349 store in 40 states and Canada 122 full line stores 216 Nordstrom Racks 2 Jeffrey Boutiques 2 clearance stores $14,498,000 annual sales in 2016 Biggest market: California

12


13

Revenue Breakdown by Product Category 32% Women’s Apparel 23% Shoes 17% Men’s Apparel 11% Women’s Accessories 11% Cosmetics 3% Kid’s Apparel 3% Other

Product Category 14


15

Overview Upper Middle Class College Educated Fashion conscious Willing to pay more for good customer service Wants a personalized shopping experience Appreciates a sales associate who knows them and what they like

Customer Profiles 16


Karen Robinson Karen Robinson married her college sweetheart from the University of Arizona and shortly after the lovebirds welcomed triplets, two boys and a girl. Though Karen was aspiring to become a journalist, she sacrificed her career to stay at home and raise the triplets. Karen loves her children, but often finds she needs a break and heads out to Nordstroms to spoil herself on shoes and handbags. Aftering dropping her two boys off at soccer practice, Karen brings her daughter along for a shopping spree and tomato soup at Nordstrom Cafe.

-Age: 42 -Status: happily married with triplets -Occupation: suburban soccer mom -Upper middle class

17

Brooke Davis Brooke Davis knew from a young age that she had a fallback in life, her trustfund, however, Brooke believed in the power of hard work and thus set her goals toward becoming a doctor. She was accepted into the University of California on a full ride scholarship and after graduating in the top of her class, was accepted into the residency program at Massachusetts General Hospital in Boston. When Brooke isn’t wearing scrubs she spoils herself in her favorite designer clothing from Nordstrom’s. In her little free time, Brooke likes to peruse Nordstrom and reward herself for her hard work with a new outfit.

-Age: 30 -Status: married to her work -Occupation: Completing her residency at Massachusetts General Hospital in Boston

18


19

As a whole, department stores have seen a huge decline in sales in 2017, while sales at non-store retailers have been gradually rising. Many department stores have reacted to this decline with an increase in markdowns and scaling back their stores. Nordstrom challenges competitors by refusing to settle with markdowns or scaling back and instead continues to offer the best customer service along with a wider variety of product than their competitors offer.

Competitors

20


Stores

Net Sales 2016

21

$14.5 billion

334

$27 billion

53*

$4.9 billion

46

$11.6 billion

160

22


Women

Shoe Totals

11,287

4,313

4,239

2,910

Brands

425

105

109

119

Sale

1,307

334

115

764

3,606

1,445

1,820

888

Brands

170

67

82

81

Sale

429

31

38

248

2,293

166

824

521

Brands

87

13

35

38

Sale

144

0

13

106

Men

Children

23

24


Pumps

$$

Pricing

25

Overall Women’s Shoes

$$$

$$

$$$

$44.47 $1,850

$19

$3,495

$55.30 $1,850

$18

$2,125

$60

$2,850

$45

$3,850

$80

$2,545

$26

$4,495

26


27 SWOT

28


S Customer service Keeping up with technology Fitting rooms of the future Text-to-buy convenience Strong portfolio of brands and private labels Keeps up with popular trends and designers via pop-up shops inside Nordstrom stores

29

W Higher operating costs Potential weakness Nordstrom is opening more storefronts while other department stores are closing theirs Scaling back on promotions

O Increase private labels Further experimentation with AR/VR Improved delivery methods

T Current retail environment is promotion heavy Decline in mall foot traffic Competitive environment Other luxury retailers selling similar products, Nordstrom has to distinguish themselves from the rest Nordstrom has smaller marketing resources Online retailers posing threat to all brick-and-mortar stores

30


31 Buying Plan 32


Corporate Plan 2017 Sales Results S/S Planned 2018 Sales Results S/S Percent Change Turn Average Stock

33

$7,249,000,000 $7,466,470,000 3.5% 4.55 $2,160,122,341

S/S 2017

$3,479,520,000

S/S 2018

$3,378,613,920

% Change

-2.9%

Online Sales

$1,519,235,300

Stores Plan

$3,190,881,790

Markdowns

$303,331,541

Markdowns as Percent to Sales

28%

New Stores

2

Shoes

$777,081,202

Women’s Shoes

$466,248,721

34


6 Month Buying Plan Women’s Shoes Total Receipts Stock to Sales Beginning on Hand (Retail) End on Hand Markdown Rate Markdowns Turn

35

March

April

May

June

July

Total

Sales Distribution 12%

14%

20%

21%

15%

18%

100%

Sales

$55,949,847

$65,274,821

$93,249,744

$97,912,231

$69,937,308

$83,924,770

466,248,721

BOH

$190,229,478

$221,934,391

$317,049,130

$332,901,586

$237,786,847

$285,344,217 $264,207,609

EOH

$221,934,391

$317,049,130

$332,901,586

$237,786,847

$285,344,217

$264,207,609 $276,537,297

MD%/Month

7%

12%

14%

16%

23%

28%

100%

MDs

$6,201,107

$10,630,470

$12,402,215

$14,173,961

$20,375,069

$24,804,431

$88,587,257

$171,020,030

$121,504,416

$16,971,453

$137,869,746

$87,592,593

$628,814,108

February

$466,248,721 $628,814,108 3.4 $264,207,609 $276,537,297 19% $88,587,257 1.76

Retail of Receipts $93,855,867

36


37

Assortment Plan 38


Women’s Shoe Categories

39

Sandal Vendors

Total Receipts

$628,814,109

100%

Steve Madden

14%

$13,205,096

Heels

$113,186,540

18%

Top Shop

12%

$11,318,654

Sandals

$94,322,116

15%

Jeffrey Campbell

10%

$9,432,212

Vince Camuto

8%

$7,545,769

Sam Edelman

8%

$7,545,769

Dolce Vita

7%

$6,602,548

Birkenstock

5%

$4,716,606

Comfort

$88,033,975

14%

Boots

$69,169,552

11%

Booties

$44,016,988

7%

Flats

$44,016,988

7%

Naot

4%

$3,772,885

Sneakers/Athletic Wear

$44,016,988

7%

Frye

4%

$3,772,885

Wedges

$31,440,705

5%

BP

4%

$3,772,885

Pumps

$25,152,564

4%

Bedstu

3%

$2,829,663

Mules & Slides

$25,152,564

4%

Free People

3%

$2,829,663

Oxfords & Loafers

$12,576,282

2%

Joie

2%

$1,886,442

Ankle Wrap

$12,576,282

2%

Jimmy Choo

2%

$1,886,442

Stuart Weitzman

2%

$1,886,442

Espadrilles

$9,432,212

1.5%

Badgley Mischka

2%

$1,886,442

Wedding

$9,432,212

1.5%

Tory Burch

2%

$1,886,442

Slippers

$6,288,141

1%

Shellys London

2%

$1,886,442

All Other (55 Brands)

6%

$4,716,106

40


1 Detailed Assortment

Top Three Sandal Vendors

Doors

Colors

Units Per Style

Ticket

Total Retail

Ruby Strappy Slide

125

3

55

$70

$756,000

Takeaway

80

3

55

$60

$1,237,500

Bianca Lace Up

125

3

55

$70

$1,443,750

Cache

125

4

55

$75

$2,062,500

Cece

125

3

55

$80

$1,650,000

Dakota

125

2

55

$80

$1,100,000

Kasen

125

4

55

$80

$2,200,000

Gila

80

3

45

$90

$972,000

Rachel

80

3

45

$90

$972,000

Carolyn Lace Up

60

2

40

$80

$384,000

Anne Embroidered

60

2

40

$70

$336,000

Jace Embroidered

20

1

40

$110

$88,000

$14,404,875

41

42


2

Doors

Colors

Units Per Style

Ticket

Total Retail

Favorite Flat Gladiator

125

5

55

$110

$2,268,750

Frayed Ringed Toe Loop

125

3

55

$80

$1,100,000

Hawaii Criss Cross

125

2

55

$35

$1,203,125

Thong

125

2

55

$70

$962,500

Hope Laceup

125

2

55

$40

$550,000

Kite

125

2

55

$100

$1,375,000

Platform

80

3

45

$75

$810,000

Wraparound Platform

80

2

45

$95

$684,000

Studded Slide

80

3

45

$68

$734,000

Studded Three Strap

80

2

45

$85

$306,000

Daisy

60

2

40

$48

$230,400

National

60

2

40

$100

$480,000

Vienna

60

2

40

$90

$432,000

Fenella

20

3

40

$60

$144,000

43

$11,280,175

3 Doors

Colors

Units Per Style

Ticket

Total Retail

Espadrille Slide

125

3

55

$100

$2,062,500

Malia

125

5

55

$50

$1,718,750

Sarasi

125

3

55

$110

$2,268,750

Despina

125

3

55

$125

$2,578,125

Cordia

80

1

45

$155

$558,000

Amina

20

1

40

$175

$140,000

$9,326,125

44


Scottsdale Storefront

Scottsdale Store Sales

$223,799

Scottsdale Store Receipts$301,831

45

Steve Madden Ruby Strappy Slide Cece Bianca Laceup Kasen Cache Dakota Top Shop Favorite Gladiator Fray Ringed Toe Loop Hawaii Criss Cross Thong Hope Kite Jeffrey Campbell Sarasi Espadrille Sandal Despina Malia Bed Stu Artemis Soto Free People Harper Torrence Sam Edelman Gemma Gigi

Color

Units

Ticket

Total Retail

3 3 3 4 4 2

65 60 53 50 48 48

$70 $80 $70 $80 $75 $80

$13,650 $14,400 $11,130 $16,000 $14,400 $7,680

5 2 3 2 3 2

66 60 55 50 48 48

$110 $80 $35 $70 $40 $100

$21,780 $9,600 $9,625 $7,000 $5,760 $9,600

3 4 3 3

65 59 48 45

$110 $100 $125 $50

$21,450 $17,700 $18,000 $9,000

3 4

45 36

$125 $125

$16,875 $18,000

3 4

43 36

$128 $78

$16,512 $11,232

5 5

43 36

$100 $60

$21,500 $10,800

Total Retail Sum $301,694

46


New York Flagship

47

Flagship Store Sales

$2,461,786

Flagship Store Receipts

$3,320,128

48


49

Steve Madden Gila Ruby Strappy Slide Cece Cache Dakota Carolyn Rachel Bianca Laceup Anne Embroidered Jace Embroidered Kasen Takeaway Top Shop Favorite Gladiator Vienna National Hope Laceup Daisy Fray Ringed Toe Loop Platform Kite Studded Three Strap Fenella Thong Studded Slide Hawaii Criss Cross Wrap Around Platform

Color

Units

Ticket

Total Retail

3 3 3 4 2 2 3 3 2 1 4 3

475 450 440 410 400 380 350 316 250 179 135 130

$90 $70 $80 $75 $80 $80 $90 $70 $70 $110 $80 $60

$128,250 $94,500 $105,600 $123,000 $64,000 $60,800 $94,500 $66,360 $35,000 $19,690 $43,200 $23,400

3 2 2 2 2 2 3 2 2 3 2 3 5 2

515 500 480 450 425 400 390 355 325 290 250 150 130 115

$110 $90 $100 $40 $48 $80 $75 $100 $85 $60 $70 $68 $35 $95

$169,950 $86,400 $96,000 $36,000 $40,800 $64,000 $87,750 $71,000 $55,250 $52,200 $35,000 $30,600 $22,750 $21,850

Jeffrey Campbell Despina Sarasi Amina Malia Espadrille Cordilla Bed Stu Artemis Soto Sam Edelman Tai Gemma Gigi Tory Burch Miller Blossom Estella Jimmy Choo Nickel Veto Badgley Mischka Crystal Embellished

Color

Units

Ticket

Total Retail

3 3 1 5 3 1

515 480 400 300 200 150

$125 $110 $175 $50 $100 $155

$193,125 $158,400 $70,000 $75,000 $60,000 $23,250

4 3

235 175

$125 $125

$88,125 $87,500

3 5 5

325 275 250

$90 $100 $60

$87,750 $137,500 $75,000

5 1 1

250 220 175

$195 $200 $295

$243,750 $44,000 $51,625

1 2

85 79

$575 $850

$48,875 $134,300

1

80

$175

$14,000

Total Retail Sum $3,320,050

50


51 Risk Statement

Due to the decline in foot traffic in department stores for 2017, we feel Nordstrom is in a state of risk rather than opportunity. Nordstrom prides itself on quality, variety, and the best possible customer service and therefore does not offer many markdowns. The 2017 consumer is price conscious and is often not willing to spend top dollar for full price and prefers to go to stores with more markdowns. We feel Nordstrom Inc should focus on its Nordstrom Rack storefronts, however take caution as many of its compeittors are now entering the off price retail market. As for the Nordstrom retail segment, we believe Nordstrom should continue to be strategic in opening Nordstrom storefronts.

52


NORDSTROM Kelly Murphy Annika Dupree

53

Nordstrom Six Month Buying Plan Women’s Shoes

FASM 245 Retail Buying Simulation Professor Michael Cohen Spring 2017


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