Nordstrom Reports 23% Q2 Gain in Ecommerce

Content Manager

Nordstrom reported a healthy 23% increase in ecommerce sales for the second quarter, accounting for more than a third of the company’s total sales, which were up 7% over last year. The company reported $162 million in earnings for the quarter, up 46% from $110 million in 2017.

“We had robust digital sales growth for the quarter, reflecting our market leading presence and significant progress toward our long-term goals,” said co-president Blake Nordstrom on an earnings call. “We remain on track for 2018 to be an inflection point for profitable growth.”

Nordstrom saw sales gains of over 25% in its Nordstromrack.com and Hautelook.com ecommerce sites.  Sales from Nordstrom Rewards members represented 58% of Q2 sales, up from 56% last year.

“When customers engage with us across stores and online, on average they spend five times more and profitability per customer doubles,” Nordstrom said. “Through our focus on our top markets we’re combining the scale of our national infrastructure with our local assets of people, product and place to drive increased customer engagement and gain market share.”

Nordstrom said the company is starting in Los Angeles, its largest market. It will bring all of its digital and physical assets together and continuing to invest in supply chain as well.

Comp sales increased 4% in Q2, driven by growth across both full-price and off-price products. Full price saw a 4.1% comp gain. The company also saw a heightened shift of customers shopping online during its anniversary sale from July 20-Aug. 5.

“Digital sales accounted for more than 40% of our event,” Nordstrom said. “On the first day of early access for our Nordstrom cardholders, we had our biggest day ever online, exceeding our previous record by 80% at 10 times our average daily demand.”

Nordstrom said while the company worked hard to manage its systems for peak demand, it did experience website issues due to unprecedented levels of demand on the first day of the event. “While our team resolved this, we know we disappointed many of our customers and in response we offered cardholders 10 points per $1 on purchases made on the first day of the anniversary,” he said.

From a merchandising perspective, Nordstrom’s partnership with brands strengthen its product margin. Sales from strategic brands grew 13% in Q2, representing about 45% of its full-price business.

Nordstrom said the company has identified sites for its West Coast fulfillment center, scheduled to open in late 2019. “These investments in our supply chain network will help us address our opportunities to better serve customers, improve our efficiencies and leverage inventory in our local market,” he said.

In July, the company said two new local concept stores will open in Los Angeles this fall. They represent part of Nordstrom’s local market strategy to engage with customers through enhanced services such as buy online pickup in store, alterations, store reserve and personal styling.

Partner Content

Hincapie Sportswear Finds Omnichannel Success in the Cloud - Netsuite
For more and more companies, a cloud-based unified data solution is the way to make this happen. Custom cycling apparel maker Hincapie Sportswear has leveraged this capability to gain greater visibility into revenue streams, turning opportunities into sales more quickly while gaining overall operating efficiency. Download this ecommerce special report from Multichannel Merchant to more.
The Gift of Wow: Preparing your store for the holiday season - Netsuite
Being prepared for the holiday rush used to mean stocking shelves and making sure your associates were ready for the long hours. But the digital revolution has changed everything, most importantly, customer expectations. Retailers with a physical store presence should be asking themselves—what am I doing to wow the customer?
3 Critical Components to Achieving the Perfect Order - NetSuite
Explore the 3 critical components to delivering the perfect order.
Streamlining Unified Commerce Complexity - NetSuite
Explore how consolidating multiple systems through a cloud-based commerce platform provides a seamless experience for both you, and your customer.