How Drop Ship Helps REI and Nordstrom Achieve Digital Growth

CommerceHub

For REI and Nordstrom, 2020 was a year of tremendous change and learning. Both retailers relied on digital channels to see them through and have leaned into the opportunity that drop ship affords in terms of driving and accelerating digital growth.

In a recent discussion, hosted by NRF and sponsored by CommerceHub, both retailers opened up about the shift to digital and how they’re supporting it with drop ship.

Tom Kimmet, Director of Enterprise Vendor Services and Operational Excellence at REI said, “Prior to the pandemic, our digital business was X, it skyrocketed for a while and now it’s stabilized at 2.5xX so that’s an enormous shift for us. As we look forward, drop ship is going to be hand/glove with what we’re going to be doing to help bring brands to market in the outdoor industry, to cultivate relationships and focus on our sustainability initiatives.”

He continued, “Drop ship gives us scale. Customers want selection and fulfillment options, drop ship helps us meet these needs. We currently have 40 brand partners and our goal is to reach 70 partners in 2021.”

For Christopher Koeppel, Director of Alternative Models at Nordstrom, “expanding upon our physical assets, connecting to sellers that have products digitally has enabled us to tell a richer, better brand story and connect with digitally native brands that don’t do wholesale. We can serve customers in a bigger way with products we can’t get our hands on via wholesale.”

“Drop ship is a partnership. You’re leveraging someone else’s inventory and expecting them to deliver to your customer. You have to be committed to supporting the brands. When looking for a brand partner, what matters most is finding one that is truly brand-centric and giving them the runway to do their jobs. Embrace partnering differently with brands.”

Christopher added that with, “more brands moving to DTC (direct-to-consumer) and moving away from traditional retail relationship, how we’re able to engage and ensure we’re the partner of choice for the brands that work with us becomes more critical.”

“At Nordstrom, 2021 is about embracing these new models (drop ship) to learn and scale into key brand categories. It’s about selection growth, but we have to walk this line carefully, we don’t want to inundate the customer. We’re a curator so we have to figure out: ‘how do these pieces fit?’ Wholesale has been a phenomenal vehicle for us for over 100 years and all these models like drop ship complement it, but we can’t rely only on wholesale because it strains our ability to offer more products.”

Watch the video roundtable here to learn more.


About the Author

CommerceHub

CommerceHub is a leading ecommerce enablement platform connecting supply, demand and delivery that helps retailers and brands increase sales by expanding product assortments, promoting products on the channels that perform, and enabling rapid, on-time customer delivery. CommerceHub helps its robust network of thousands of retailers, brands, and distributors achieve over $30 billion in Gross Merchandise Value annually.