Nordstrom to Focus on Rack Concept, Small-Format and Digital

At its virtual investor event on Feb. 4, Nordstrom executives outlined the company’s long-term growth strategy, “Closer to You,” which focuses on its off-price Nordstrom Rack division, digital and small-format stores like Nordstrom Local.

Nordstrom plans to focus on three areas where it sees the greatest opportunity, including:

  • Winning in Nordstrom’s Most Important Markets: Nordstrom is extending the rollout of its market strategy to its 20 top markets (from its current 10), which represent approximately 75% of sales, integrating Nordstrom Rack assets and further evolving the company’s distribution capabilities;
  • Broadening the Reach of Nordstrom Rack: The company will expand the range of price points offered at Nordstrom Rack and better connect physical and digital inventory in order to increase selection as well as improve profitability. The company expects Nordstrom Rack to contribute approximately $2 billion in incremental sales over the long term; and
  • Increasing Nordstrom’s Digital Velocity: The retailer will grow its assortment, delivering personalization at scale and increasing linkages between digital and physical assets. The company expects its digital business to represent approximately 50% of total sales going forward.

The Digital-First Platform: ‘Closer To You’
To deliver on its growth priorities, Nordstrom said it plans on “unlocking the full potential of its digital-first platform, with a focus on gaining deeper insights, acquiring new customers, offering more choices and delivering better service,” according to a release. This includes:

  • Deeper Insights: The retailer will leverage its technology platform to create a unified view of the customer, product and inventory. These efforts are designed to provide personalization at scale and enhance the overall customer experience.
  • More Choices: By expanding its product offering, particularly in high-growth categories, the retailer said there is potential to increase total selection from approximately 300,000 customer choices to more than 1.5 million; and
  • Better Service: Nordstrom plans to translate its hallmark top-notch service to the digital realm, offering a seamless and interconnected experience to deliver meaningful, personal connections with customers wherever and however they choose to shop.

Through these efforts, Nordstrom hopes to accelerate revenue growth, expand profit margins, improve returns and generate cash flow.


“We have a unique business model with two powerful brands, highly integrated digital and physical assets, incredible brand partners and employees who are truly unmatched when it comes to their commitment to the customer,” said Erik Nordstrom, CEO of Nordstrom in a statement. “Looking ahead, we are building on the strengths of our market strategy to fully unlock the potential of the digital-first platform we have built to better serve customers, gain market share and drive profitable growth.”

The company also introduced its fiscal year 2021 outlook:

  • Revenue, including retail sales and credit card revenues, is expected to grow more than 25%, with digital representing approximately 50% of total sales;
  • EBIT is expected to be positive; and
  • Leverage ratio is expected to be approximately 3X by year-end.

Featured Event

Join the retail community as we come together for three days of strategic sessions, meaningful off-site networking events and interactive learning experiences.



Access The Media Kit


Access Our Editorial Calendar

If you are downloading this on behalf of a client, please provide the company name and website information below: