Nordstrom Inc. is testing 24-hour curbside pickup in select markets during the holiday season to draw more online shoppers to its stores.
The service will be available in ten markets starting next month, running from December 16-24. Nordstrom began testing curbside pickup at 20 stores in 2015 and has since expanded the offering to all of its stores.
Nordstrom co-president Blake Nordstrom said the 24-hour curbside service is geared toward Nordstrom shoppers who are pressed for time and may not be able to make it to a store during normal business hours.
“During this holiday period, we believe the strength of our digital capabilities along with our local market assets, our people, product and place represent a significant competitive advantage in serving our customers,” he said, according to a transcript from Seeking Alpha. Nordstrom specifies in a press release that a shopper who chooses to pick up an online order in store can call or text a specific curbside pickup phone number 10 minutes before she gets to the store location. Once the shopper arrives, an employee will meet her at her car with her order. Nordstrom stores are not open 24 hours, and executives didn’t specify how much the service will cost or how it will work. A spokeswoman did not immediately return a request for comment.
Sucharita Mulpuru, vice president and principal analyst at Forrester Research Inc., says curbside pickup hasn’t yet caught on in retail in part because retailers haven’t aggressively marketed it. Even if Nordstrom markets this service, it’s unlikely to have a big impact.
“It’s a fraction of online orders, my guess is sub-10% for any retailer that even offers it,” she says. “On the other hand, the people who use it love it, usually busy moms who don’t want to get out of their cars when they are running errands with kids in tow. It’s a service you’d expect Nordstrom to have, and for that reason this is a great idea for them, even if few people use it.”
Nordstrom, No. 17 in the Internet Retailer 2017 Top 500, reported total online sales of $746 million during its fiscal third quarter ended Oct. 28, up 13.7% from $656 million during the same time last year. Online accounted for 21.1% of sales during the quarter, compared with 18.9% last year.
For the first nine months of 2017, Nordstrom reported online sales of $2.510 billion, up 16.4% from $2.157 billion last year. Online has accounted for 23.8% of sales so far this year, compared with 21.0% last year.
Blake Nordstrom said the retailer has continued to expand its reserve online, try on in store service to more than 50 of its 117 Nordstrom stores because shoppers have responded positively to it.
“Our customers appreciate its speed and convenience,” he said. “It frees up their time, and if they choose to do additional shopping in our store, this results in a material lift in their spend.” Blake Nordstrom did not specify how much extra shoppers who utilize the reserve online, try on in store feature spend while in-store.
What’s noteworthy for Nordstrom is that, through the first nine months of fiscal 2017, the retailer has nearly doubled its profits compared with the year-ago period, while at the same time growing total and online sales. Chief financial officer Anne Bramman attributes the gain in profits in part to unspecified improvements the retailer has made in its order fulfillment process.
“We’ve made operational improvements to reduce split shipments and canceled orders,” she said. “This has resulted in a better customer experience while reducing our average cost per unit. Our omnichannel business model provides for favorable economics related to driving customer spend, reducing the cost of serving customers and elevating the Nordstrom and Nordstrom Rack brands.”
- Net sales of $3.541 billion, up 2.0% from $3.472 billion during the same time last year.
- Sales through its full-price Nordstrom.com online store of $534 million, up 7.4% from $497 million.
- Sales through its off-price NordstromRack.com and HauteLook online stores of $212 million, up 33.3% from $159 million.
- Net income of $114 million, compared to with a loss of $10 million.
For the first nine months of 2017, Nordstrom reported:
- Net sales of $10.537 billion, up 2.7% from $10.255 billion during the same time last year.
- Sales through Nordstrom.com of $1.901 billion, up 13.5% from $1.675 billion.
- Sales through NordstromRack.com and HauteLook online stores of $609 million, up 26.3% from $482 million.
- Net income of $286 million compared with $153 million.