Encouraged by the early success of its reserve online, try on in store offering, Nordstrom Inc. plans to roll out the service to more than 40% of its store locations by the end of this year.
In the immediate future, co-president Blake Nordstrom told analysts on the retailer’s Q2 2017 earnings call Thursday that the retail chain will offer the service at four additional stores in the Chicago area and the six in Seattle where it piloted the mobile service. Nordstrom began testing reserve online, try on in store in its Seattle locations last fall.
The feature allows shoppers to choose items in Nordstrom’s mobile app, and store associates will set aside those products in a dressing room so shoppers can then come into the store and try those items on before deciding to purchase them.
“It’s really, really encouraging, mostly because about 80% of the customers who try it do it again,” president of stores Jamie Nordstrom said, according to a transcript from Seeking Alpha. “The repeat rate is really high, which means customers like it. Customers like having more ability to shop on their terms.”
Nordstrom, No. 17 in the Internet 2017 Retailer Top 500, may be expanding the service to get more online shoppers into its full-line stores. Online sales through Nordstrom’s flagship Nordstrom.com grew to $819 million during the second quarter ended July 29, up 19.9% from $683 million during the same time last year.
It was a different story for its stores, however. Sales in its full-line retail locations during the quarter declined 4.6% to $1.887 billion during the quarter from $1.978 billion during the same time last year.
Through the first half of the year, Nordstrom.com sales grew by 16.0% to $1.367 billion from $1.178 billion in the year-ago period, while full-line store sales declined 5.4% to $3.369 billion from $3.560 billion last year.
Despite the fact that online sales are growing and store sales aren’t, co-president Blake Nordstrom said he views stores as key to the retail chain’s success.
“Nearly 80% of customers who shop with us across multiple channels began in our stores,” he said. “Our local market assets, our stores, salespeople, product and services, are the core of our brand and play an important role in engaging with our customers.” Co-president Erik Nordstrom also said that more than 60% of the retailer’s full-price online returns and more than 80% of its off-price online returns wind up getting returned to one of the retailer’s stores.
Nordstrom reported total online sales (Nordstrom.com and its off-price Nordstrom Rack and HauteLook brands) in Q2 of $1.018 billion, up 21.2% from $840 million during the same time last year. Online accounted for 27.4% of sales during the quarter, compared with 23.4% a year ago.
For the first six months of 2017, Nordstrom’ reported combined online sales of $1.764 billion, up 17.5% from $1.501 billion a year ago. E-commerce has accounted for 25.2% of sales so far this year, compared with 22.1% in the first six months of 2016.
Blake Nordstrom said he and his team were particular buoyed by the retailer’s annual Anniversary Sale, which opened to the general public on July 21 and ended Aug. 6, so the first half of the sale was included in the retailer’s Q2 results. Blake Nordstrom said Anniversary Sale orders fulfilled through its buy online, pick up in store service increased 50% compared with last year’s sale, while overall online sales during the sale period grew more than 20% year over year.
- Net sales of $3.717 billion, up 3.5% from $3.592 billion last year.
- A comparable sales increase, including bricks and mortar and online, of 1.7%, compared with a 1.2% decline.
- Net earnings of $110 million, down 6.0% from $117 million.
For the first six months of 2017, Nordstrom reported:
- Net sales of $6.996 billion, up 3.1% from $6.784 billion last year.
- A comparable sales increase of 0.6%, compared with a 1.5% decline.
- Net earnings of $173 million, up 6.1% from $163 million.