Nestled among its Q4 2023 earnings was the news that Nordstrom plans to add a third-party marketplace to the Nordstrom.com website in April.
“By reimagining the way we work with our brand partners, we’ll grow our curated online assortment to serve more customers on even more occasions through increasing our use of unowned inventory,” said CEO Erik Nordstrom on the earnings call. “Marketplace will allow customers to shop more products and sizes from their favorite brands while providing them more access to new and emerging brands.”
The addition of a third-party marketplace has become a common tactic for major department stores — including Macy’s, Saks, Kohl’s and Hudson’s Bay — to grow their digital share without the expense of holding additional inventory, and that’s clearly what Nordstrom is aiming to do as well: “Expanding our assortment through unowned inventory has the potential to drive GMV growth in addition to providing compelling economics,” said Nordstrom on the call.
The company reported better-than-expected earnings for Q4 2023, which ended Feb. 3, 2024, with net sales increasing 2.2% over the same quarter last year. The increase was driven in particular by the company’s off-price banner Nordstrom Rack, where net sales were up 14.6% over Q4 2022. The company’s digital business remains strong, accounting for 36% of sales in fiscal 2023. Looking ahead to 2024, however, the company projected a potential decline, which caused Nordstrom shares to take a dive in after-hours trading on Wednesday.
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“We’re very, very focused on driving digital growth,” said CFO Cathy Smith on the earnings call. “We know that things like choice count matter there ,and so we’re excited about the marketplace that Erik shared in the remarks. That will help obviously drive choice count.”
