November 25, 2014
Nordstrom ends half-yearly sales
Shifting to a promotional calendar similar to other department stores, Nordstrom is replacing its major half-yearly sales in favor of six annual clearance events around the holidays.
For decades, dating back to its early days as a shoe retailer, Nordstom held six half-year sales across key categories. Men’s clothing was held in mid-June and December; women and kids in late May or early June and early November; and shoes was held in February in September.
Under the new plan, Nordstrom will hold six clearance events encompassing all departments and online aligned with the key shopping holidays: President’s Day, Memorial Day, Father’s Day, Labor Day, Veteran’s Day and the day after Christmas.
The popular Anniversary Sale in July remains unchanged.
Nordstrom indicated the half-yearly sales worked for customers famiiar with the chain, but not for new customers expecting clearance sales after the holidays. The change is also expected to result in a more fluid seasonal movement of inventory.
On the company’s third-quarter earnings conference call last week, Jamie Nordstrom, president, stores, said the half-yearly "model really kind of handicapped our ability to improve our flow of fresh new regular price goods. We saw some opportunities to improve that because we know that’s what our customers want. And that’s what drives our business. So we think by evolving how we clear merchandise, we can improve our flow of regular priced goods."
He stressed that the shift wasn’t about adding promotions. "In fact, what you’ll see is over the next year we’ll actually have less days with clearance on our floors than we did with the old model."
One possible downside identified in reports is that Nordstrom may face more head-to-head competition over promotions with Macy’s and other department store competitors.
"Once you start to go promotional, it’s very difficult to put that genie back in the bottle," Neil Stern, senior partner at McMillan Doolittle Retail Consultants, told the Puget Sound Business Journal.
- Coupons, Promotions & Sales – Nordstrom
- Nordstrom Q3 2014 Earnings Call Transcript – Seeking Alpha
- Nordstrom reshuffles its traditional half-yearly sales – The Seattle Times (tiered sub.)
- Nordstrom nixes big semi-annual sales – Puget Sound Business Journal
- Nordstrom nixes Half-Yearly sales, replaces them with six clearance events – The Oregonian
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Recent Discussions
Discussion Questions
What do you see as the pros and cons of Nordstrom shifting to a traditional clearance calendar? Do you think gained inventory efficiencies will offset any promotional risk?
Poll
This is being done to get in line with other stores, as huge clearances are now commonplace at Macy’s and Kohl’s. Nordstrom wants to make sure their customers can get these store-wide deals just like Macy’s customers do, and this I believe will help them move more product in the stores. My wife lives for the clearance sales at Macy’s (she should get a job there), and many others do too. I am a Kohl’s shopper, and love the 30 percent off sales with the $10 back on every $50 spent, and I believe Nordstorm is recognizing the need to get in line with this concept. Profitability may be in question, but the huge markups on this stuff will offset the discounts with extra volume.
Obviously the pro is that they will get more traffic, particularly from aspirational shoppers.
The con is that they begin to lose their identity and become just another large chain. That would be a sad day, but in truth, they’ve been heading that way since they got more aggressive about expansion.
Being a Nordy’s freak I estimate that this will help, especially with gaining new Nordstrom shoppers. This may eliminate the big pre-sale private event for major shoppers, but hey if it helps Nordstrom improve their reach and margins then great. Macy’s men’s online is improving quite a bit in brand assortment. They both still have more customer focus that Neiman-Marcus, at least in my region.
I thought Rack stores were their vehicle to “improve flow of fresh new regular priced goods”? Slugging it out with everyone else on every holiday puts them squarely in the promotional slug where mediocrity reigns.
The idea that they need to do this in order to stay relevant and garner market share is bogus. Look at Victoria’s Secret. They have two semi-annual sales, no outlets and they control 40 percent of the lingerie market. Quality and service are the best differentiators. Isn’t that Nordstrom’s stock-in-trade?
First of all, I’m sure Jamie Nordstrom meant they would have fewer, not less, days of promotion.
The move to a traditional clearance calendar may upset a fair number of Nordstrom loyalists without attracting a compensatory number of new shoppers. It also, as the article states, puts the chain in a head-to-head pricing policy battle with its direct competitors.
Somehow I’ve thought of Nordstrom as being somewhat above the whole perpetual markdown, heavy discount wars, but when you step onto the enemy’s home turf you have to be prepared to fight on their terms.
And no, I don’t think inventory efficiencies offset the risk, Just look at the competition’s experience.
Nordstrom has done well as Nordsrtrom. Not sure how well it will do as Macy’s or Kohl’s.
Matching promotions with other retailers may be attractive to new consumers to Nordstrom, but it does nothing to differentiate Nordstrom as a distinctive retailer. It may be a good idea to push merchandise but the young people are going to expect a LOT of new merchandise after the sale. Maybe Nordstrom could take a page out of Zara’s playbook and just introduce the new merchandise six times a year in limited amounts and have consumers realize that if they do not buy it when they see it, it will be gone. That would emphasize their exclusive image more than adding more sales.
“This is being done to get in line with other stores.” What will differentiate the culture at Nordstrom? Will they also begin squeezing vendors for markdown money? Are they going to go down-market with their brands and products next, because of their zeal for share of the Macy’s customer’s wallet?
Yes, such clearance events are commonplace at Macy’s, J.C. Penney and Kohl’s (but only on days of the week ending in the letter “y”) but the long term result has been a lack of quality in the products they offer as a result of the high/low pricing tactics.
And can any chain on sale 300 days a year seriously expect the consumer to believe they are holding a “clearance” event?
I have always appreciated Nordstrom because they were one of a select list of stores that still avoided the overly promotional mindset. Sad to see they are now following the herd.
It’s not often that the RW story itself so neatly identifies the pros and cons, and if someone missed them, we all seem to agree on the biggest—in being like other stores, you become like other stores. First the piano players went, now this…someone pass me the eggnog before another tradition goes out the window.
Noted that there was a lot of discussion regarding the impact of this marketing change to Nordstrom’s culture. I admit it is a change in their marketing and may come as somewhat a shock to loyal Nordstrom shoppers. However, having the additional sales does not mean their culture of customer service has to change.
Oh no! Tell me it’s not so! The last bastion of retail ingenuity has just folded. They used to stand out as unique, but now they’re becoming a follower. Woe is me…nothing to wait for anymore.
The Nordstrom people are pretty darn smart and know what they are doing. They are keeping their annual event and adding additional ones. Sounds like it benefits their customers. It does start to mix them in the pack with other retailers, but still makes sense. They will compete with other retailers during traditional sale times. But, the Nordstrom experience is what the customer wants and expects. That’s hard to compete with.
Shoppers want deals and while Nordstrom won’t have as many days of sales, it will have the opportunity to compete with the promotions at Macy’s and similar department stores.
I think having an increased number of shorter sales is a great trade-off that will probably benefit Nordstrom because there will be a greater sense of urgency and more chances to save.
I don’t see any real cons of the switch, besides the fact that the retailer will have to work harder to promote its sales. Macy’s “1 day sale” model is very well known and Nordstrom will have to find what works for its business in particular.
Having more chances to get older inventory out of stores and online will be an opportunity to learn what moves and when. I’m interested to see the outcome of this.
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This is being done to get in line with other stores, as huge clearances are now commonplace at Macy’s and Kohl’s. Nordstrom wants to make sure their customers can get these store-wide deals just like Macy’s customers do, and this I believe will help them move more product in the stores. My wife lives for the clearance sales at Macy’s (she should get a job there), and many others do too. I am a Kohl’s shopper, and love the 30 percent off sales with the $10 back on every $50 spent, and I believe Nordstorm is recognizing the need to get in line with this concept. Profitability may be in question, but the huge markups on this stuff will offset the discounts with extra volume.
Obviously the pro is that they will get more traffic, particularly from aspirational shoppers.
The con is that they begin to lose their identity and become just another large chain. That would be a sad day, but in truth, they’ve been heading that way since they got more aggressive about expansion.
Being a Nordy’s freak I estimate that this will help, especially with gaining new Nordstrom shoppers. This may eliminate the big pre-sale private event for major shoppers, but hey if it helps Nordstrom improve their reach and margins then great. Macy’s men’s online is improving quite a bit in brand assortment. They both still have more customer focus that Neiman-Marcus, at least in my region.
I thought Rack stores were their vehicle to “improve flow of fresh new regular priced goods”? Slugging it out with everyone else on every holiday puts them squarely in the promotional slug where mediocrity reigns.
The idea that they need to do this in order to stay relevant and garner market share is bogus. Look at Victoria’s Secret. They have two semi-annual sales, no outlets and they control 40 percent of the lingerie market. Quality and service are the best differentiators. Isn’t that Nordstrom’s stock-in-trade?
First of all, I’m sure Jamie Nordstrom meant they would have fewer, not less, days of promotion.
The move to a traditional clearance calendar may upset a fair number of Nordstrom loyalists without attracting a compensatory number of new shoppers. It also, as the article states, puts the chain in a head-to-head pricing policy battle with its direct competitors.
Somehow I’ve thought of Nordstrom as being somewhat above the whole perpetual markdown, heavy discount wars, but when you step onto the enemy’s home turf you have to be prepared to fight on their terms.
And no, I don’t think inventory efficiencies offset the risk, Just look at the competition’s experience.
Nordstrom has done well as Nordsrtrom. Not sure how well it will do as Macy’s or Kohl’s.
Matching promotions with other retailers may be attractive to new consumers to Nordstrom, but it does nothing to differentiate Nordstrom as a distinctive retailer. It may be a good idea to push merchandise but the young people are going to expect a LOT of new merchandise after the sale. Maybe Nordstrom could take a page out of Zara’s playbook and just introduce the new merchandise six times a year in limited amounts and have consumers realize that if they do not buy it when they see it, it will be gone. That would emphasize their exclusive image more than adding more sales.
“This is being done to get in line with other stores.” What will differentiate the culture at Nordstrom? Will they also begin squeezing vendors for markdown money? Are they going to go down-market with their brands and products next, because of their zeal for share of the Macy’s customer’s wallet?
Yes, such clearance events are commonplace at Macy’s, J.C. Penney and Kohl’s (but only on days of the week ending in the letter “y”) but the long term result has been a lack of quality in the products they offer as a result of the high/low pricing tactics.
And can any chain on sale 300 days a year seriously expect the consumer to believe they are holding a “clearance” event?
I have always appreciated Nordstrom because they were one of a select list of stores that still avoided the overly promotional mindset. Sad to see they are now following the herd.
It’s not often that the RW story itself so neatly identifies the pros and cons, and if someone missed them, we all seem to agree on the biggest—in being like other stores, you become like other stores. First the piano players went, now this…someone pass me the eggnog before another tradition goes out the window.
Noted that there was a lot of discussion regarding the impact of this marketing change to Nordstrom’s culture. I admit it is a change in their marketing and may come as somewhat a shock to loyal Nordstrom shoppers. However, having the additional sales does not mean their culture of customer service has to change.
Oh no! Tell me it’s not so! The last bastion of retail ingenuity has just folded. They used to stand out as unique, but now they’re becoming a follower. Woe is me…nothing to wait for anymore.
The Nordstrom people are pretty darn smart and know what they are doing. They are keeping their annual event and adding additional ones. Sounds like it benefits their customers. It does start to mix them in the pack with other retailers, but still makes sense. They will compete with other retailers during traditional sale times. But, the Nordstrom experience is what the customer wants and expects. That’s hard to compete with.
Shoppers want deals and while Nordstrom won’t have as many days of sales, it will have the opportunity to compete with the promotions at Macy’s and similar department stores.
I think having an increased number of shorter sales is a great trade-off that will probably benefit Nordstrom because there will be a greater sense of urgency and more chances to save.
I don’t see any real cons of the switch, besides the fact that the retailer will have to work harder to promote its sales. Macy’s “1 day sale” model is very well known and Nordstrom will have to find what works for its business in particular.
Having more chances to get older inventory out of stores and online will be an opportunity to learn what moves and when. I’m interested to see the outcome of this.