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09/22/2015

Nordstrom President Announces Aggressive Mobile Enhancement Strategy

For the past decade, Nordstrom has been aggressively investing in technology meant to provide customers with a seamless shopping experience. Executives plan to increase those efforts going forward, primarily focused on increasing the retailer's mobile capabilities.

Nordstrom has made large investments in a perpetual inventory system that enabled the company to target the multi-channel shopper as far back as 2002. The company is continuing to stay ahead of the curve. Last year, CFO Mike Koppel stressed that digitizing their brand was still a top priority. "We plan to invest $3.9 billion in capital over the next five years as we focus on serving more customers through store and online growth," he said. "An important element is our technology investments, which represent $1.2 billion or 30% of our capital plan."

That plan seems to have picked up steam. Last month, co-president Blake Nordstrom indicated that the company is adapting its investment strategy based on consumer trends. He pointed towards expanding the company’s mobile platform as a main focus.

"Mobile is an important enabler of convenience as customers increasingly desire a more seamless shopping experience," Nordstrom said. "Of the US 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.

"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 a 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.”

Nordstrom’s intense focus on technology seems to stem from the fact that the retailer is already seeing tangible results from past efforts to elevate the brand’s online customer experience. Last year, Nordstrom saw its web sales increase by 25.5%, which was comfortably above the national average e-commerce growth rate of 15.4% (U.S. Commerce Department). Online transactions alone accounted for a total of 18.0% of Nordstrom’s net sales.

With their substantial success in e-commerce, executives at Nordstrom now seem to be opening locations with the hope that each new full-line store will also increase online sales. Nordstrom recently noted that Nordstrom’s new stores in Ottowa and Calgary sparked meaningful online gains in those regions. “Technology is also an integral enabler of the customer experience, representing a critical element in linking our enterprise,” he said. “Just as importantly, we are investing to assure a strong technology platform that delivers the necessary flexibility and scale to achieve our growth ambitions.”

The company plans to open three stores in Toronto within the next two years.