Nordstrom Finds Freedom in Alternative Wholesale Packages – RetailWire

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January 20, 2022

Pete Nordstrom, Nordstrom’s president and chief brand officer, said the luxury retailer has embraced non-traditional types of retail partnerships, characterized by collaborations with Asos and Fanatics, in part to keep up with the “endless march” of online business , but also as part of a more open mindset regarding sales arrangements.

Mister. Nordstrom, speak at a session at the NRF Big Show, recalled the days when previous generations of his family wondered why the store was selling a “competitor” like Brooks Brothers.

“The fact is, customers don’t see it that way,” Mr. Nordstrom said. “Customers see it like, ‘I like this brand.'”

As an example, he cited Madewell, which first began selling within Nordstrom in 2015. “One of the most common things we heard from customers who just confirmed the whole idea was, ‘Wow, now I can buy my favorite brand at my favorite store,'” he said.

E-commerce growth has also opened up opportunities for expansion. Customers may find a full range of a brand’s offerings online, but minimal or no in-store inventory due to space constraints. early 2021, Nordstrom predicted that its online offering could potentially expand to 20 times what it offers in-store, versus three times as it focuses on direct shipments, concessions and revenue-sharing deals.

SAccording to Mr. Nordstrom, such alternative arrangements must be a “win-win situation” for both sides.

In its online-only partnership with Nordstrom, Fanatics fulfills and ships all orders and owns inventory to reduce risk for the department store retailer. Under the Asos deal, the UK-based online retailer retains operational and creative control, but the two companies share ownership to ensure collaboration.

Nordstrom has numerous partnerships with DTC brands that also aim to complement each other.

“The perfect scenario for us is to have a well-known, high-demand brand that you don’t find in many places,” Mr. Nordstrom said. “I don’t think we’re good at popularizing an unknown brand. But we are good at making a well-known brand bigger and better.”

The retailer also relies on personalization to offer online browsers a curated experience despite expanding the offering. “It’s good to have a lot of choices, but it’s not good to have something overwhelming,” Mr. Nordstrom said.

DISCUSSION QUESTIONS: Do you see more benefits or risks in Nordstrom’s efforts to secure brands through non-traditional wholesale arrangements? Do such flexible sales regulations make much more sense today than they did 20 years ago?

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“Retail partnerships with DTC brands is a model where I suspect we will see a lot of experimentation and subsequent success for all parties.”

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