Photo: Wikimedia Commons
As Nordstrom celebrates its 110th anniversary, we take a look at what this luxury goods provider can teach the broader marketplace about growth, expansion, and maintaining a consistent and loyal customer base.Nordstrom reflects the “steady-as-she-goes” business model. Originally founded as a shoe store in Seattle, Washington, Nordstrom has effectively evolved with its relatively traditional and affluent customer base by building out stores (instead of growth-through-acquisition) and executing a controlled yet profitable expansion into the broader consumer base through the Nordstrom Rack, Jeffrey Boutique, and Last Chance stores.
It’s this last point that provides the greatest object lesson in probability to the luxury goods marketplace. By offering up “luxury-for-less” – without keeping the majority of product “in-house” on those “unsightly” sales racks – through the above-listed final distribution points, Nordstrom has effectively maintained its reputation as a luxury-goods provider to its “power shopping base” while also branching out into the “value-shop” marketplace that’s come to dominate 21st century consumerism.
Brands/stores like the Gap, Macy’s, and H&M would be wise to study Nordstrom’s case history. This large-yet-nimble department store has managed to evolve with its customer base while never losing focus on its ultimate value proposition. No matter what month, year, decade, or century, the shopper knows what s/he is getting when s/he steps into a Nordstrom.
Wish the same could be said about the above-listed stores.
NOW WATCH: Ideas videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.