Trends in retail operations

By Jan Teague, President/CEO
Washington Retail Association

The Retail 11 conference was held this week with Jamie Nordstrom kicking off the event discussing the fast-paced challenge of retail technology and providing customer service to the company’s growing Internet business. Nordstrom is a 110 year old company that prides itself on service.

“We don’t let off the gas on the culture of our company,” said Jamie.

But what has changed in the last ten years is the definition of service. Stores can’t just be good shopkeepers anymore. They have to have a more global view even if they just have one store. “The problem is that the pace of change requires you to think like a growth business or you will get eaten by those who are,” said Jamie.

Customers are becoming very savvy about items in the store. They know their prices and they know where they can find choices. The Internet has brought transparency to the market and given customers more choices. This prompts retailers to be thinking ahead about their values and practices. In Nordstrom’s case, this means that the great customer service is a core value that requires the company to continually focus its practices to match. Consumers now access online sales through Facebook, tweets and other experiences that all drive customers to a specific product or store.

Jamie sees 80 percent of Nordstrom’s growth as a company to be in the online business. Square footage growth has slowed down and is not expected to recover soon. He pointed to a number of examples where companies have been successful. Customers like the new technology and things like flash sales. Online weekend sales are “going gangbusters,” Jamie said. The challenge is to find ways to talk to customers so Nordstrom can continue to improve its service.

Jamie also noted that if operating margins shrink, so be it. It’s been a sobering wake up call to see how the Internet has changed everything – how you talk, invest, and figure out tomorrow’s success. The event was co-sponsored by the Washington Retail Association. Opus Law Group and the University of Washington Foster School of Business.

(Editors note: This story appeared in the Washington Retail Association newsletter on June 15.)