Upscale retailer Nordstrom certainly has maintained a loyal following.
What’s more, its successful loyalty program accounts for 44% of company sales.
Members of the Nordstrom Rewards loyalty program shop three times more frequently and spend four times more on average than non-members. Nordstrom opened approximately 350,000 new accounts in the second quarter. With 4.5 million active members, sales from members rose 10% in the second quarter.
“Our Nordstrom Rewards loyalty program is an important way for us to create new and strengthen existing customer relationships,” Michael G. Koppel, Chief Financial Officer and Executive Vice President for Nordstrom, said during the company’s Aug. 13 second-quarter earnings conference call, according to Seeking Alpha. “Early access to shop the anniversary event continues to be an important benefit, attracting 7% more new members. As we look ahead, we are planning to expand our program to include a tender neutral option for customers, which is targeted for next year.”
Blake Nordstrom, the company’s Co-President & Director, said that the customer is “at the center of our strategy as we focus on creating a differentiated experience in each of our businesses. While we’ve been pursuing distinct strategies to grow each business, we're also working to link them together to provide our customers with a seamless experience. This is important because we know that when customers engage with us across multiple touch points, their lifetime value and spend increase significantly.”
Nordstrom registered a 9% total sales growth in the second quarter.
“We are focused on further integrating our businesses through service and experience, product, and capability,” Nordstrom explained. “Our recent initiatives around stores and mobile, along with our Trunk Club acquisition, are ways to create a more relevant experience with our customer. We consider full-line stores to be the core of our brand, providing our customers with a high level of service they expect from us. Not only are we serving more customers through new stores, we are benefiting from synergies across our channels.”
Mobile is an important enabler of convenience as customers increasingly desire a more seamless shopping experience, Nordstrom noted.
“Of the U.S. population, two-thirds own a smartphone and roughly one-half shops on their device, presenting a meaningful opportunity for us with over 90% of our customers using smartphones,” Nordstrom explained. “To evolve with our customers’ rapidly changing expectations, we’re rolling out new features at a rate three-times faster than last year. In addition to our ongoing mobile enhancements, we launched a unique text-to-buy feature for our salespeople, enabling customers to buy product via text. As customers continue to want a more integrated shopping experience, we view mobile as a long-term priority to provide a richer experience for our customers.”
From a merchandising perspective, Nordstrom said the company is focused on integrating the business to provide customers with a differentiated offering.
“This is enabled by our vendor partnerships, where we can offer a one-stop-shop for distribution across channels and categories,” he explained. “Through these partnerships, we’ve been able to better serve customers by complementing our curation in store with breadth online. For the past several years, we’ve expanded online selection by over 20% annually through key brands that are resonating with customers. These brands also help us create excitement and attract new customers.”