At Nordstrom Lines Just Aren’t Cool Anymore
Nordstrom has seen substantial benefits from implementing mobile point of sale devices. The question remains whether they will continue to rely on technological innovation to drive future performance.
The traditional retail model has drastically changed over the past couple of decades. Technology has served as a major driving force in enabling much of this change. Further, the emergence and growth of large e-commerce retail players such as Amazon and EBAY has added a new layer of convenience and has influenced consumer purchasing behavior. So when consumers can purchase virtually any good or service by pressing one button, the last thing they want to do is wait in long lines at a brick and mortar retail store. Nordstrom, a company intently focused on superior customer experience, recognized the need to limit customer check-out wait time in 2011 and made a large investment in mobile point of sale devices. These devices enabled employees roam freely and check out customers from anywhere in the store. Nordstrom was the first fashion retailer to utilize this type of technology and reaped many financial and operational rewards for this strategic decision. Retails stores like Apple and Home Depot were also early adopters of mobile point of sale devices, all of these companies introduced point of sale devices to enhance the customer experience and challenge the traditional bounds of the a retail store.
Nordstrom announced the roll-out of the mobile point of sale devices in early 2011 as part of a broader technological investment into their stores which included enhancing in-store wi-fi capabilities and upgrading the company website. The mobile device was essentially a modified iPad touch with a credit card reader attached and allowed the employees to roam freely around the store to both assist customers with purchasing decisions and help them check out. The initial deployment tested the technology in certain store locations and led to the eventual roll out of 6,000 devices over their 117 full-line stores. The full roll out included more mobile devices than registers and ran parallel with the integration of the store and online inventory which provided the option for Nordstrom to ship products directly to the customer during the point of sale. The mobile device also allowed for customers to receive their paperless receipt through email.
What started as a means to increase efficiency and decrease customer wait times led to an overall improvement in business performance. The point of sale devices limited the time that customers had to think about their purchases before they reach the register. This is a critical factor in a high end store where purchasing decisions often involve a few hundred dollars and are can be impulsive splurges which often result in high abandonment with increased wait time. After the implementation of the devices, Nordstrom decreased the abandonment rates and saw the average purchase price and number of items sold go up significantly. Nordstrom leveraged this platform to reinforce their business model of superior customer service and extend the capabilities of their operating model by creating additional capabilities upon which to execute on their customer promise. Nordstrom’s foray into digitization of the checkout process compliments there e-commerce platform and allows the company to better compete with its pure play online competitors. Further, mobile devices have positively contributed to Nordstrom’s bottom and top line as they are less expensive that traditional cash registers and enables Nordstrom to do more with less employees. As a result of the massive benefits experienced by Nordstrom and other early adopters, many large retailers have followed suit and implemented mobile point of sale devices.
Given the massive rewards that Nordstrom experienced from its digital transition, the question remains whether Nordstrom will continue to invest and leverage technology as an competitive advantage. While luxury goods are more insulated from competitive e-commerce players than traditional retailers, I believe that they must continue to innovation to remain competitive and grow sales.
Student comments on At Nordstrom Lines Just Aren’t Cool Anymore
Thank you for detailing how Nordstrom continues to improve customer service through mobile POS systems. I am a bit surprised to read this because while I have seen the mobile POS in full force at Nordstrom Rack stores, I have not yet seen mobile POS at any Nordstrom stores I have visited so far. I am curious as to whether they began rolling this out but then scaled back, or perhaps store associates feel more comfortable with their computer POS systems where they can get more information, despite having mobile POS available. I would be interested to know how the implementation and execution has gone for them, as Nordstrom is very unique in that they have so many different check-out counters, one or two in each department. This is unlike a Home Depot or Sephora store where you have only 1 (or sometimes two in the case of a two-story Home Depot) check out area where all the POS systems are lined up, and you have about 3-6 associates working at the check out lines. I imagine it would be harder to implement the mobile POS systems in a department store like Nordstrom where there are so many more people to train and so many more devices needed for each area of the store (shoes, cosmetics, mens, womens, athletic, etc).
I also think Nordstrom has a lot of opportunity when it comes to customer data and integrating and creating a seamless experience for the customer. One recent example was that I was trying to make a purchase in the store, but I did not have my newest Nordstrom credit card. It took almost 15 minutes for the associate to resolve the issue, and she had to make a phone call three times and take down my SSN, address, birthday, etc. I would think Nordstrom, in their efforts towards digitization, will need to invest in CRM in a big way.
Thanks for the article! I see significant synergies between digitalizing the POS transaction and collecting improved customer data – allowing them to even better integrate the information they have from all parts of the business to ultimately serve the customer. Having a customer’s email, knowing what they’ve purchased now and historically, and even being able to track the very point in the store where the purchasing decision is made, are all data elements that will allow Nordstrom to continue to fulfill their customer promise “to provide a fabulous customer experience by empowering customers and the employees who serve them.” 
Like Yarden, I haven’t personally witnessed remote POS devices at Nordstrom, only at Nordstrom Rack. I would assume that long queues and the negative associations of those on customer conversion and experience are a bigger deal at Nordstrom Rack, which has a higher volume of sales. I will definitely be on the lookout for these devices at Nordstrom itself during this Thanksgiving holiday sale season!
Great insights into how Nordstrom is trying to enhance its brick and mortar experience! I agree that reducing lines, especially during peak seasonal periods, is a great focus to increase both customer service and conversion. I have personally left stores empty-handed because of long lines. I also think having tablets as a source to showcase all of Nordstrom’s products that may not be available in-store can help increase sales, especially if an item comes in several color variations.
I worry though if having a sales force armed with these mobile POS platforms could create a negative customer experience because of their commission-induced pay? I personally have felt pushed aggressively into buying items at Nordstrom and it contributed to a negative shopping experience. Also, could having customer payment information on these mobile platforms cause privacy and security issues? Is Nordstrom doing anything to protect customer data? I read a great article on how Nordstrom is ‘spying’ on its customers via WiFi so hopefully it has proper regulation and standards to protect its customers and do what is right for them.
Thanks for this post on how a high-end retailer like Nordstrom is also using technology to improve customer experience. The mobile POS should be a tool not only for the moment of the sale but for the employee to get useful information about the client from the moment the customer arrives at the store. Previous shopping history, for example, might be used by the employee to suggest additional products or visiting other sections of the store. It might also make a more personalized experience, for example by not having to ask the address if the item is going to be shipped home. The mobile POS can integrate all the data Nordstrom already has of their customers into the store experience.
However, I was wondering what else Nordstrom is doing to get the customer into the store. Can technology be used to improve the shoppers’ experience while looking for a product? Why would someone go to Nordstrom to buy instead of Amazon other than the fitting room?
This is an interesting approach for a clothing retailer to adopt in the face of increasing popularity of online channels. I think brick and mortar stores will always maintain the advantage of allowing customers to physically try on clothes and make immediate purchases rather than have to wait 24 hours for their goods to be shipped. However, I am definitely one of those customers who has abandoned purchases while waiting in line and gone home to make an online purchase. In some cases, I actually end up making the purchase from a different store’s website in which case the brick and mortar store bears the cost of sales associate’s time spent convincing me to make the purchase but none of the revenue. In that respect, I definitely see the value of offering customers the convenience of a mobile check-out but also think this is a great morale-booster for sales associates as it improves measurement of their performance. While to Eric’s point, this may make associates more aggressive in closing sales, I also think there is value to making it easier to attribute customers’ purchases to individual sales associates’ efforts. A win for customers and employees alike!
Thank you for a very interesting article on Nordstrom’s investment in its POS devices at store locations! I was especially interested in the effect that the implementation of the mobile POS devices had on abandonment rates and number of items sold. It makes a lot of sense that people would be less likely to second guess purchase decisions if the sales rep who has been helping them is able to facilitate their purchase on the spot. However, I wonder if rates of return for items also went up. Customers might feel pressured to buy items they have not properly vetted, and therefore might simply return these items at a later date. Due to the fact that Nordstrom has such a liberal return policy (items are able to be returned for years after purchase, with or without tags), it may be difficult to track the actual impact of the implementation of the POS devices. Overall though, I think the mobile POS devices are a great step in the right direction for Nordstrom. The next frontier is definitely a focus on digital sales, both on mobile devices and PCs.