Multichannel

Nordstrom vs Marks & Spencer: Who Wins Omnichannel?

Nordstrom

Last week at the Shop.org Summit in Denver, two venerated department stores from either side of the Atlantic presented their experiences and visions in adapting to a multichannel world. One came out on top.

With a combined 240 years of retail experience between them, department store retailers Nordstrom and Marks & Spencer presented their versions of ‘omnichannel’ at the 2012 Shop.org Summit in Denver, Colorado.

In the blue corner, from the UK, Director of Multichannel David Walmsley presented a keynote on behalf of Marks & Spencer. In the red corner, from the USA, Jamie Nordstrom, great grandson of the original founder, presented the Nordstrom take on omnichannel.

Both opening gambits were redolent of pretty much every keynote presentation on retail I have ever sat through (and I’m in both business publishing and events, I see a LOT of presentations).

“Focus on the customer,” both David and Jamie enlightened the 3000 or so delegates.

“Wow!” whispered the retail CEO, nudging his executive assistant. “Write that one down Mary, that is gold. We have to stop focusing on the width of the escalators and start focusing on the customer. Who knew?”

Following that standard opener, each presenter steered attendees down two distinct paths, both focusing on the ‘omnichannel’ plans of their respective companies. There was no mention of ‘spin and bullshit’.

Marks & SpencerAt the end of Jamie’s presentation on Day 2 of the conference, the distinction between the two businesses was evident. For mine, Nordstrom proved far more strategic and committed to omnichannel success for the long term. Conversely, Marks & Spencer appeared focused on tactics and trials, invoking the buzz term “rapid iteration” which is code for “we’ll try anything and everything even though 90% of it won’t work, and hopefully something will stick”.

Marks and Spencer is no slouch when it comes to e-commerce – $700 million in revenue comes from online, accounting for 10% of the company’s revenues. It’s a huge chunk Australia’s department stores would love to claim, but I was surprised at the lack of cohesive strategy and insights offered during the M & S presentation.

Enter Jamie Nordstrom. He reiterated that Nordstrom has one goal every year – to improve customer service. However, what Nordstrom was able to do successfully was outline how the 111-year-old bricks and mortar retailer has embraced digital culturally, practically and cohesively to create a true omnichannel business.

NordstromNordstrom cited the strategic partnerships with digital start-ups like flash sales site Hautelook (which it acquired for $180 million) and more recently Bonobos, a stylish menswear pureplay retailer. This enabled the group to acquire supreme digital talent and integrate digital smarts into the traditional retail business.

Like many retailers with store networks, Nordstrom faced the same internal battle over who gets credit for a sale. The solution? “Shut up, people – we need to offer customers a competitive omnichannel experience, not bicker over who gets store credit.”

I’m sure stores have heard this one before too. “But won’t the online channel cannibalise store sales?” Jamie’s people asked.

The response: “Let’s worry about Amazon cannibalising our sales, not ourselves cannibalising ourselves. Let’s keep our customers happy and in the Nordstrom family however they wish to shop with us.”

The takeaway from both presentations is that both retailers are fully invested in omnichannel for the long term. Nordstrom, whose online sales are just approaching $1 billion per annum, will be spending that amount over the next five years to support its e-commerce infrastructure.

In 45 minutes Jamie painted a convincing picture of a company that fully understands where the omnichannel world is going, what customers want and the strategy to profit from this evolution. By contrast, David from Marks & Spencer seemed committed to a program of tactical experimentation over strategic innovation, without a clear and committed long term view.

If M & S and Nordstrom were to go head to head (and in the flat earth economy it’s likely), my money would be on Nordstrom.

Grant Arnott

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Grant Arnott is publisher of Power Retail. Other hats include Co-Founder of Click Frenzy, Global Head of The Media Pad, and adoptive father of a fast-growing Golden Retriever. Grant has a specialist business publishing background spanning more than a decade, and contributes regularly to a multitude of print and digital business media. Follow Grant on Twitter and Google+ or connect with him through LinkedIn

3 Comments

    • Gaurav Patni
    • Gaurav Patni
    • 20th September

    Glad to know your verdict, Grant :-)
    I had the opportunity to work first-hand on Nordstrom’s omnichannel development (3 years in a full time role), and also consulted briefly at M&S. Comparing the two, I’d say your observation is right on the money.

    Reply
  • Norsdstrom has been innovating in cross-channel customer service for more than a decade. Building upon their very strong customer service principles, they were one of the first to integrate stores to web via ‘clientelling’ (eliminating hand-held ‘black books’), and to integrate their data warehouse to help their staff to deliver personalised service. As an employee of Blue Martini I was lucky to be privvy to some of those early initiatives. It’s laughable that Gerry Harvey says he has to do omni-channel because his shareholders expect it, or for Bernie Brookes to say he’s omni-channel because he has a new website on the way. This isn’t about shareholders, or technology. It is, and always has been, about the customer.

    Reply
  • (Make that ‘Nordstrom’!!)

    Reply

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