American retailer Nordstrom is known for its legendary customer service. With over 280 stores across the United States – and 3 in Canada by the end of 2015 – the 114 year old business might be the rare example of a major department store chain doing everything right. Year after year, the company places high...
American retailer Nordstrom is known for its legendary customer service. With over 280 stores across the United States – and 3 in Canada by the end of 2015 – the 114 year old business might be the rare example of a major department store chain doing everything right.
Year after year, the company places high in consumer satisfaction studies, this year taking the top spot on the American Customer Satisfaction Index (ASCI), gaining 4% in its satisfaction score. And at a time when most American’s feel less satisfied with the service they receive from retailers, Nordstrom’s ability to develop customer engagement is impressive.
So how do they do it?
Customer Data
Nordstrom takes great care to understand product and brand relationships, figuring out how to promote the right brand and product to the right customer, maximizing profits in the process.
The company collects volumes of data from their website and stores, as well as through their social networks, Facebook (836,260 followers), Instagram (1.2 million followers), and Twitter (49.2 thousand followers).
The company has taken their data collection process a step further, creating their very own “Innovation Lab” which utilizes data from across all channels to augment and enhance the customer experience. Among it’s various creations, the Innovation Lab has created an app that provides employees with customer profiles based on information customers provide if they so chose.
The app enables employees to access information related to customer purchase history, preferences, and even what they shopped for but couldn’t find. Armed with more information about each customer, store employees can tailor their service to the specifications of the customer.
Customer Champions
Robert Spector, author of The Nordstrom Way to Customer Service Excellence, has studied the shop for decades.
A key lesson he shares in his book is the way in which the company empowers its employees, or “Nordies” as they are sometimes called. Upon employment with the company, Nordies receive a card on which is written the one rule that all employees must abide by: “Use good judgment in all situations.” The company’s employees are given complete freedom to take care of customers and, if a mistake is made, at least it will be made in the customer’s favor.
It is this kind of service that regularly places Nordstrom at the top of satisfaction rakings. Despite the store’s generally higher prices and lack of sales (“We don’t do the 50%-off-everything-in-the-store sale,” former chairman Bruce Nordstram once said), Nordstrom clearly resonates with customers, delivering a high-end shopping experience like no other.
The company shows that customer satisfaction is not all about promotions and gimmicks. The key to pleasing customers comes down to one simple thing – offering quality service.
Quality service has provided Nordstrom with a clear competitive edge. Indeed, it could be that the retail giant is better known for its service than the actual merchandise it sells. In many ways, Nordstrom is the ultimate service-drives-sales business, weathering economic downturns and changes to the retail industry.
By rethinking the “business-as-usual” attitude of most retailers, Nordstrom has carved out its own niche, finding smart and innovative ways to:
- Help customers find what they are looking for faster.
- Help customers check out faster.
- Build a personal relationship with each customer.
- Create a unique and branded shopping experience.
- Provide customers with opportunities to spread positive word of mouth.
Customer Innovation
Nordstrom invests quite a bit of time and money on customer-centered innovation, with its Innovation Lab receiving much attention.
Working with customers, the Innovation Lab’s “data scientists” have designed, among other creations, an iPad app to help shoppers select sunglasses and a real-time cross-channel inventory app that helps customers see when and where a product is available and, if ordered, when they can expect to receive it.
And, of course, customers can buy items they see on the retailer’s Pinterest and Instagram accounts, a digitally-savvy move which further improves the retailer’s reputation, especially with younger, social media-minded shoppers.
The company’s goal is to create the finest in-store and on-line shopping experience possible. For instance, the Nordstrom app allows shoppers to reserve clothes they like and find them hanging in a fitting room upon entering the store.
Then, mobile check out makes it simple for employees to see customers through the payment process, rather than sending them to a cash register to complete their transaction.
However, if a customer pays at a register, they can be assured an equally high level of service, as all employees are instructed to never push a bag across a counter but, instead, walk the bag around a counter and hand it to the shopper.
These are all small touches, but the accumulative power of multiple small gestures like these cannot be overlooked. Customers want to feel valued and it’s the retailer’s ability to do just that time and again which has made customer satisfaction Nordstrom’s real point of differentiation.
As President Blake Nordstrom once famously said, “It’s not about us being ranked on top or ‘best in class.’ It’s about what’s best for the customer. In fact, forget ‘best in class’. The customer is consistently raising the bar, and since they are setting the standard, we’re constantly resetting ours’ upward.”
