Nordstrom and REI have a long-standing track record of success in traditional physical retail. In fact, they are beloved for their in-store experiences and curated selections. But they’ve also embraced digital channels and have bridged the connection between physical and digital exceptionally well. They recently shared their journey to drop-ship success during a roundtable discussion hosted by NRF and sponsored by CommerceHub.
While the REI and Nordstrom customer may be different, the benefits both of these retailers have experienced since embracing drop ship are parallel in a lot of ways.
Test and learn. Tom Kimmet, Director of Enterprise Vendor Services and Operational Excellence at REI said that “drop ship is important for learning more about the REI customer. Being able to test out categories/brands is key, we know we need to understand what does our drop-ship customer look like and what is their loyalty to REI.”
“We are all about ‘testing a brand in’ and drop ship helps us do this effectively. Our brand partners test with our customer segment and this is how we find brands that are going to resonate with our customers and provide them with the products they’re looking for.” Chris Koeppel, Director of Alternative Models, Nordstrom
Pivot quickly. 2020 was the year of the pivot. For two months, REI’s physical stores closed. They shifted to digital and needed to quickly put in place a curbside offering. Without the access to brand partners via drop ship, the customer experience could have been impacted.
Add a rich story to the brand experience and build community and customer loyalty. Chris shared that at Nordstrom catering to customers, “high expectations of items being in stock and getting great service is at the core of Nordstrom’s brand promise. It’s how we’ve established a ‘cult following.’ Drop ship enables us to connect with new customers. It gives us the ability to have room to incubate, try things out and acquire new customers.”
Get closer to the customer and give the customer what they want. Tom noted that, “Customers want selection. Drop ship gives REI breadth of assortment so we can get customers what they want.”
Chris sees the “need to access the inventory to tell customers what’s available and when they can have it as most important. Fast doesn’t always mean you’re doing it right. We have to understand the customer need and do what they need in that moment.”
“That’s why we think carefully about how to make sure that we’re the platform of choice for our brands—making it super attractive to our brand partners and making it so our customers think of us first when they’re shopping.”
Another great example of getting closer to customers for Nordstrom has been by adding drop ship to Nordstrom Rack. “This has become a new source of customers for us—a younger, different demographic that may not venture into a Nordstrom store. Drop ship makes it so we’re able to engage with all different types of customers, wherever they’re at in their life journeys.”
Watch the video to learn more about the power of drop ship in this insightful discussion here.