Nordstrom

The retail brick and mortar industry is more and more threaten by numerous e-commerce platforms. E-commerce platforms have greatly improved their services by proposing extensive catalogs, free shipping and free returns which appeal more and more to the new generation. To take on this challenge and in line with their innovative culture Nordstrom is putting to a test different innovations focused on customer experience. Nordstrom uses the Kaizen tool as they are in constant research of ways to improve their customer experience.Following are some examples of their constant effort to take on e-commerce platforms and stay competitive among other department stores.

Nordstrom was one of the first to partner up with Uber's new platform "Uber Rush". This service allow customer to get their order delivered by Uber employees. This new service reduces one of the main pain point of the customer journey in pick up orders which is to go to the store itself. By integrating Uber pick up option Nordstrom eliminates this pain point. This new way of moving their inventory directly to consumers is an advantage for Nordstrom as they once again innovate to provide the best customer experience by reducing unnecessary movements and possible waiting time.

This new type of store is based on a reflexion on the customer journey map. Nordstrom evaluated their in-store experience and developed a new concept store that changes the overall consumer journey and experience. we can relate that reflexion on the customer journey map to the one of the Amazon Go store. Indeed as seen on the "Amazon Go" case, the online giant brought its business offline by introducing a cashierless experience to its customers. These two company worked on introducing concept stores that would disentangle shopping for consumer products and having a unique experience.

Inventoryless store:This concept store acts as an enhanced pick up spot for Nordstrom consumers. Indeed, in this store consumers can come to pick up items selected online as well as return them on the spot. They can also benefit from multiple other services described in the video. This store has therefore no inventory but act as an offline platform available for customers.

Customer centric experience:This new concept store is concrete statement from Nordstrom that they are very customer-centric. Indeed, Nordstrom Local is the result of an extensive work on the customer journey map. This concept store is designed for consumers who live in city centers and do not want to drive to malls and/or waste time going through multiple racks of different items. In the video enclosed you can clearly see the multiple services that they offer that are designed to smooth the Nordstrom shopping experience.

Following the company culture on innovation and customer centricity Nordstrom is rethinking the customer experience in many of their regular department stores. Nordstrom is chasing the "wow effect" by offering new features such as tailoring, cross-channel shopping and new return options. The company thrives on innovation and improvement made possible by constant tests and feedback collection. Nordstrom is demonstrating agile capabilities in their way testing, collecting feedback and acting quickly on them. This specific quality allow them to be fast in their adaptation to customers' changing habits.

Nordstrom is renown in the industry to deliver the best customer service. Indeed, customer service specialists uses Nordstrom's as an examples to follow and teaches the company's techniques.Nordstrom's customer centricity and will to deliver the best customer experience relates to the Ritz Carlton case where customer service is at the center of their strategy. Indeed, in the Ritz Carlton case we've seen 10 lessons on service excellence and out of those i've chosen to illustrate and describe 2 main concepts that we can clearly identify at Nordstrom." Hire and reward people who can effectively build relationships with customers". This lesson from Ritz Carlton is directly applied in the Nordstrom hiring policy. Nordstrom wants to hire people that fits their company culture as one of the best in customer services from their field. See the video on Nordstrom guidelines to deliver customer excellence."Treat the customer as if they were guests" this second lesson is about how you should see your customers. Seeing your customers as guests in your stores changes your all perspective on the service you want to provide and makes you want to go the extra mile to satisfy their needs. The example of the Diamond ring (next video) is the definition of going the extra mile to provide excellent service.

In this video made from a customer service expert we learn about the 5 tips put in place by Nordstrom in order to deliver the best service in any of its stores.1) Use good judgement in all situationEmployees are encouraged to deal with customer situations using their own judgement as they are trusted to carry the company's business culture2) Hire rightNordstrom only asks one question "what's your definition of customer service" in order to evaluate if they have the right mindset to carry out the company's vision3)Employee empowermentNordstrom empowers employees to act on their own as they are trusted to use good judgement at all times.4)The devil is in the detailsNordstrom knows that little details can make the difference when it comes to services.5)Be better than the competitionWith the competition of online retailers Nordstrom knows that by delivering exemplary customer services it can differentiate itself.

In the enclosed video we can find the famous example of the diamond ring where Nordstrom employees helped a consumer find her missing diamond inside the store. This example shows the determination of Nordstrom employees to help consumers to have the best experience. This story also strengthen their reputation as customer service experts.

Nordstrom is a 119 year old company that has successfully maintained their reputation has innovative and customer-centric brand. From our study we understand that Nordstrom applies Kaizen in every part of its supply chain and operation.This company has continuously rethought and reinvented how they produce, sell and organize the customer journey inside its stores.Customer experience & Excellent Service:Nordstrom has always been one of the most creative retail store when it comes to creating customer journey. In this analysis of the customer experience we understand that Nordstrom developed multiple features to improve major pain points of its customer journey map thanks to a highly adaptable supply chain model and an emphasis on customer centricity.Operational Innovation:In this specific point we understand that Nordstrom is keen to new partnership that helps them innovate in their operation.Triple ANordstrom is a clear example of Triple A supply chain as they have successfully integrated Agility , Adaptability and Alignment in their operation and company culture.SRMEven thought Nordstrom has multiple suppliers it has successfully managed to provide clear information and guideline that represents the company values. Nordstrom also invests in new technology to develop further the communication with their suppliers.Lean ManagementThe department store has integrated multiple elements of lean operations has they are more and more oriented towards efficiency and waste reduction. The company also applies Kaizen in every part of their operation which is in sync with their company culture.

Nordstrom has invested in new technologies to improve their supply chain management. In this case, Nordstrom acquired a small part of the Supply Chain software company Dsco. This software main feature is the "Drop Shipping" which allow a company to ship directly from the factories of the manufacturer into the hands of the consumer. This capacity limits Nordstrom's inventory costs while allowing a faster delivery for their consumers.This investment and implementation represents a true operational innovation that affects Time, Cost and Customer satisfaction

Nordstrom is an example of Triple A supply chain management as they invests in each of the 3 qualities. Following are examples on how they invest to constantly improve each one of them.

Agility:Nordstrom is demonstrating signs of agility as they have designed their supply chain to quickly meet a changing demand and have contingency plans in case of crisis.Their ability to adapt to the changing habits oh customers can be seen in their constant innovation in customer experience. Please explore the customer experience part to see more examples and details.Nordstrom is also on top of crisis management as it is illustrated in the enclosed link. In this statement we follow the experience of a customer that was the victim of hacking in the Nordstrom system. They handle the crisis at every step from warning the customer, dedicating a special phone number to help them check if their was any fraudulent activities and finally by giving them a compensation. In the end Nordstrom managed to transform a crisis in an opportunity to show their efficiency and how much they value their customers which is rewarded by a high customer satisfaction as can prove this citation from the statement:"It's an impressive gesture—even for those of us accustomed to Nordstrom's exceptional customer service."

Adaptability:Nordstrom demonstrates its adaptability by being able to adjust its supply chain to the companies' business vision. Indeed, they use intermediaries such as DSCO to develop "drop shipping" technologies to shorten the delivery process. We also learn in the attached article from their own website that they developed partnerships with Attabotics and Tompkins Robotics to improve their storage capabilities as well as the sortation process. These partnerships allow them to develop new logistics processes and is a statement of their capacity to adapt.

Alignment:Nordstrom's strategy when it comes to vendors relationship is to be as transparent as possible. In the enclosed article we can see that Nordstrom is using a new B2B platform called NuOrder to streamline its buying process. This new way of exchanging information between Nordstrom and its vendors enhances their collaboration which increases their partnership performances.

The Nordstrom "Partnership Guideline" is an example of Supplier Relationship management. In this guideline Nordstrom explains the minimal requirement to be a supplier of their brand. The conditions present in the guideline reflects the company values and culture. Nordstrom's guideline is in accordance with the law but it also goes further by introducing environmental clauses that enforce their point of view on ecology.This partnership agreement can be related to the IWAY from IKEA. As we've seen in the IKEA case, the company developed a set of guidelines that help them guide their suppliers and set Ikea's expectation regarding their SRM.

Nordstrom's main objective is to build mutually beneficial and successful relationship with their suppliers. To achieve this objective Nordstrom advocates the use of standardized norms common to the industry. By using these standardized norms Nordstrom wants to insure that their supply chain is easily understandable. Indeed, Nordstrom wants to create an environment where products and information can move along the supply chain smoothly and in an efficient manner.Here are some examples of the standards they use:Universal Product Code (UPC)/International Article Number (EAN),Electronic Data Interchange (EDI)GS1 US standards (includes those formerly known as VICS).As see previously in Triple A/ Alignment Nordstrom is also using new way of communication with its vendors in order to increase visibility and improve relationship performance.

Nordstrom shows signs of lean management:As we can find in the article Nordstrom's VP Supply Chain Strategy System and Engineering Ngoc Phan pushes for flexibility, leveraging their existing space and operational simplicity.Flexibility:To achieve flexibility Nordstrom uses agility to adapt quickly to changes in the consumer demand and to stay competitive vis a vis the competition.Leveraging the existing space:To make the most of their existing physical assets we can imagine that a lean company such as Nordstrom uses tools such as value stream mapping and Kaizen to effectively take advantages of those existing assets.Operational Simplicity:Nordstrom wants to make its operations as simple as possible in order to increase productivity and to be able to adapt to changes. They also want to reduce training time to make it more efficient.