Nordstrom SWOT Analysis [Update 2022] ❤️

Nordstrom SWOT Analysis: Nordstrom Inc (Nordstrom) is a fashion store that specializes in specialty items. Inventory and supply chain; multi-channel selling and loyalty programs are among the firm’s main strengths, even though a decrease in sales is a major reason to be concerned.

The retail market online in the US as well as the market for apparel within the US and expansion efforts will likely provide an opportunity for growth for the business. 

However, competition is fierce and a rise in organized crime in retail, as well as the cost of manpower in the US, may impact its business operations.

Background of Nordstrom

To conduct a thorough Nordstrom SWOT review is crucial to have the right details about the business. 

Nordstrom is among the top US-based fashion retailer brands that have been operating for over 90 years. 

The company began its journey as a shoe shop but gradually grew into a retailer that sells clothing and footwear bag accessories, cosmetics and perfumes, and more.


Overall Overview of Nordstrom

Company’s Name Nordstrom, Inc.
Company’s Former Names Wallin & Nordstrom (1901-1967), Nordstrom Best (1967-1973)
CEO Erik Nordstrom
Company Type Public
Year Founded 1901
Number of Employees 74,000 (2018)
Annual Revenue $15.86 (2018)
Founder John W. Nordstrom
Area Served US, Canada, Australia, Puerto Rico
Headquarters Seattle, Washington, US
Operating Income US$ 837 million (2018)

By 2020, it will have over 100 shops in operation within the USA. The company has partnered with a number of strong affiliates, including Faconnable, and HauteLook, to improve the retail market.

Milestones/Development Timeline of Nordstrom

1901 The establishment of Nordstrom.
1960 Seattle Shop became the largest retailer of shoes in the United States.
1963 Women’s apparel is introduced
1966 The launch of children’s and men’s clothing.
1971 The company was listed on the stock exchange.
1973 The expansion of the company across the country was initiated
1975 Nordstrom in Alaska
1998 Nordstrom begins their online business
2000-2007 Nordstrom owner Faconnable
2005 Nordstrom buys the majority stake in Jeffrey
2011 The company purchases HauteLook
2012 Nordstrom is the sole major US retailer that sells Topshop as well as Topman.

The SWOT analysis of Nordstrom

The clothing and fashion market is constantly changing so the brands have to be able to adjust to the ever-changing retail environment. 

As the company has changed dramatically since the start of its operations, Nordstrom’s SWOT analysis will identify the future business strategies the company could implement to ensure its standing among the leading retailers. 

Nordstrom’s SWOT analysis’s main objective is to determine its strengths and weak points and be aware of threats to hinder its growth.

Strengths In The SWOT Analysis Nordstrom’s  

❤️ Multi-Purpose Portfolio Its range comprises Nordstrom Rack (discount stores), Haute Look, and Trunk Club ( subscription box service) with Bevy Up, allowing the company to satisfy the needs of its clients in the modern time.

❤️ exclusive brands and luxury designer merchandise From clothing to shoe bags, handbags, and jewelry, Nordstrom has positioned itself as a premium department store, which sells high-end merchandise and brand names that are considered to be premium.

❤️ Strong Strategic Partnership Nordstrom has set itself apart from the competition by partnering with small, but strategically-oriented brands like Top Shop, Allbirds, Greats, Reformation, Stella, Dot, and Glossier that are digitally native and direct to consumers. A greater number of customers are coming to Nordstrom for these brands which boost sales 30 percent more quickly than brands that are not strategic.

❤️ Strong growth and financial position: While other department stores face ongoing declines in sales, however, Nordstrom’s financial standing is solid with an estimated 15.9 billion in revenue (2019) and is growing at a steady pace thanks to the efficiency of its rack stores, online stores, and special sales for anniversary, pop-up shops and other promotions.

❤️ Great Customer Care: Personalized VIP Customer Service is among Nordstrom’s main strengths. Sales associates greet customers when they arrive at the store, and help with finding the products they are looking for.

❤️ Excellent Return Policy Nordstrom has an excellent (no no-questions-asked) refund policy which helps customers be more confident about making a purchase.

❤️ A pioneer in the field of innovative Customer Service: Nordstrom was among the first department stores in the US to embrace and utilize digital technology to enhance the ultimate customer experience. To enhance the Omni-experience the company opened a brand new NYC flagship store, which allows customers to try on clothes online and use a Trunk Club that lets customers personalize the clothes prior to placing an order in-store or on the internet.

❤️ Competitive Fulfillment Alternatives Nordstrom provides free delivery on all orders, without a minimum amount to purchase. However, Nordstrom competitors, for instance, Macy’s has $75, and C. Penney has a minimum purchase requirement to be eligible to receive free shipping. With the growing amount of shoppers shopping online, Free shipping offers Nordstrom an advantage in the market.

❤️ High Ecommerce Penetration Sales at department stores, Nordstrom comes in second place in E-commerce sales, only being beaten by Neiman Marcus. Presently, $4.7 Billion (30 percent of the overall $15.9 billion revenue) is generated by online sales.

❤️ An effective BOPIS Strategism Nordstrom offers customers the option to purchase online, and or at the store (BOPIS). This is not just it is the most profitable option for the business, but it also meets the growing demands for convenience.

❤️ Nordy Club Membership Program Nordstrom’s customer loyalty program and reward program is growing. With this program, customers are able to earn points, enjoy exclusive offers, and receive customized services. The program is home to more than 13 million users (2019). They contributed around 2/3 of the revenue. Nordstrom may make a lock-in for its customers.

❤️ High Corporate Reputation: Nordstrom helps the local communities where it conducts business by making donations of hundreds of millions to hundreds of non-profit organizations across the U.S., Canada, and Puerto Rico. Alongside giving to Good+Foundation, Nordstrom pledged $5 million in community and investment grants in New York City by the close of 2020.

 Weaknesses In The SWOT Analysis Nordstrom’s  

❤️ High-end Merchandise: Nordstrom has nurtured the image of its brand as a luxury store and has a wide selection of designer brands. The cost-intensive nature of the majority of its merchandise entices people with lower incomes and middle incomes to competitions such as TJ Maxx.

❤️ With a limited global presence Nordstrom has only locations within the US as well as Canada, which effectively restricts its operations in North as well as Central America. Any changes in the economic climate in these areas could be catastrophic for the financial viability and the sustainability of the company.

❤️ The lack of diversification Nordstrom is a major player in luxury clothes shoes, accessories, and footwear and is thus exposed to the possibility of massive losses since it’s ‘put all its eggs into the same basket.’

❤️ High-risk and expensive investments: Nordstrom invested over $500 million in its brand new seven-story tall landmark Manhattan retail store. In this day and age of online shopping, the number of customers who visit retail stores is decreasing. Building a high-end brick-and-mortar shop is a risky venture. In the event that the Manhattan store is unsuccessful in the end, more than half-billion is lost.

❤️ brand dilutionNordstrom keeps expanding the number of discounted discount outlets i.e. Nordstrom rack the last-chance clearance and In 2019, the company had 249 off-price stores Full-line stores totaling 132 (Nordstrom,, Trunk Club). This tactic exposes Nordstrom to branding discoloration.

 Opportunities In The SWOT Analysis Nordstrom’s  

❤️ Exploit E-commerce: More and more customers are purchasing online. Nordstrom could focus on expanding its online shopping platforms and boost online sales further.

❤️ Attract Customers of a Younger Age: Nordstrom has the possibility of expanding its customer base by adopting strategies to target younger customers by leveraging iconic brands. According to Nordstrom, the average age of customers was 42 and its young customers (18 to 34 years old) make up only 36 percent of the customer base.

❤️ Expanded in Emerging Markets: Tapping into emerging markets within Asia as well as Latin America will provide Nordstrom with an excellent chance to profit from the increasing worldwide demand for luxury items. This will also aid with expanding its reliance on that US market.

❤️ Growth through Acquisition The large majority of department stores are struggling to compete with the retail market. Nordstrom has the potential to leverage its massive financial resources to purchase smaller stores that have the potential for growth in a short time.

❤️ Diversify Portfolio Nordstrom’s services and products are limited to footwear, clothing, and accessories. It is able to diversify its offerings to include products from different areas like sportswear ( Nike, Adidas) and furniture.

 Threats In The SWOT Analysis Nordstrom’s  

  • Retail Apocalypse Euromonitor’s data indicate department store sales have seen a series of declines over the last five years. The sales of department stores decreased by 4.8 percent during the initial nine months of 2019 as per the department of commerce. If the retail industry’s apocalypse is not stopped over the next few months, Nordstrom can lose not just its profit margins and viability but also its very existence.
  • Strong competition: Neiman Marcus, Bloomingdales, Saks fifth avenue, Macy’s, JC Penney, TJ Maxx, Kohl and a host of other competitors have been giving Nordstrom a tough time for its money. As competition increases, Nordstrom can lose a large portion of its customers.
  • E-commerce giant – Amazon: Many of the premium brands, that were exclusively sold at high-end stores are now through Amazon. This poses a threat to luxurious stores that are high-end such as Nordstrom.
  • Rental Clothing Subscriptions and Resales of Luxurious Items: There are several new categories of competition that are emerging in the marketplace.
    • Subscription to rental services like renting runways
    • Social marketplace online for high-end items like Threadup Poshmark and others.
  • Counterfeit products: As the accessibility and the quality of counterfeit products are rising it could be a significant threat to Nordstrom’s top-quality products. As per the United States Government Accountability Office report that around $1.38 Million in counterfeit products were taken in 2016 by Customs and Border Protection in the year 2016.
  • Economic Depression: The experts believe that the current economic stability is the “calm before the storm” because of the declining trend in the Consumer Confidence Index over the last three years. This is a negative signal for Nordstrom due to the fact that its high-end items will be one of the first non-essential expenditures that will be reduced or eliminated or substituted with lower-cost alternatives during shorter periods of time.
  • Corona Outbreak of Corona The outbreak is already affecting the economic stability of the world by disrupting the supply chain, travel as well as retail.

There Are Limitations To SWOT Analysis For Nordstrom

While it is true that the SWOT analysis is extensively used to plan strategic strategies, However, it has its fair share of drawbacks.

  • Certain abilities or aspects of an organization can be both a strength as well as a weak point at the same. This is among the main drawbacks of SWOT analyses. For instance, changing environmental regulations could be an issue for the company but however, but it could also be an opportunity in the sense that it can allow companies to be in a position to compete with their competitors or even gain an advantage over competitors, if they are can develop its products more quickly than its competitors.
  • SWOT doesn’t provide a way to gain competitive advantages and therefore it shouldn’t be a complete solution.
  • The matrix is merely an idea to begin an analysis of how the proposed strategies can be implemented. It also provided an evaluation window, but not any implementation plan that is based on Nordstrom’s strategic competitiveness. Nordstrom
  • The SWOT model is a static analysis that analyzes the existing conditions and a small number of potential modifications. As the environment, circumstances, as well as threats, and strategies, evolve, the dynamics of a competitive setting cannot be analyzed in a single report.
  • SWOT analysis can make a firm overemphasize the importance of a single external or internal aspect when formulating strategies. There are interrelations among the most important external and internal aspects that SWOT cannot reveal, but could be crucial in determining strategies.

A SWOT Analysis That Is Weighted For Nordstrom

Given the previously identified weaknesses of the SWOT analysis/ matrix, the management of corporations has decided to assign an appropriate amount of weightage for every weakness and strength of the business. 

Companies also evaluate the probability of events happening in the near future and the impact they can be on the performance of the company.

This technique is known as a weighted SWOT analysis. It is superior to basic SWOT analysis as With weighted SWOT analysis Nordstrom managers are able to focus on the most crucial elements and ignore the less crucial ones. 

It also eliminates the problem of the long list, which is when organizations make an extensive list, but none of the elements are considered to be crucial.

Important Takeaways

Nordstrom’s SWOT study indicates that the business is in need of improvement opportunities that will accelerate the growth of their business, however, they must consider the dangers that are posed to them. Here are a few suggestions for the company to speed up the growth of their business:

❤️ The company must operate globally and has more physical stores and eCommerce sites that aren’t American. They could benefit from the growing Asian marketplace for retail.

❤️ Nordstrom ought to consider having cheaper products, as it will allow their customers to be more accessible. Its Nordstrom SWOT analysis shows that the company’s costly merchandise is among the major shortcomings that hinder its ability to reach the masses.

❤️ The brand must focus on its online marketing capabilities. It is possible to expand their reach significantly by utilizing their online services to create international reach.

Create a SWOT analysis diagram or any other diagram in a matter of minutes! There are numerous SWOT symbols and templates to pick from and creating the SWOT analysis diagram can be very easy.

Conclusion Nordstrom SWOT Analysis  

After conducting a comprehensive review of the SWOT analysis of Nordstrom We’ve concluded that Nordstrom is indeed America’s most renowned retailer of luxury goods. 

Its competition and rental clothing and pandemics, as well as the lack of diversification, are just a few of the biggest issues. 

Nordstrom must diversify its product line and broaden its market in order to tackle these increasing problems.

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