Nordstrom Case Study

• Issues at Nordstrom

  • having stores in Canada was a distraction to management
  • Poor result - needed to improve business model to adhere to the Canadian market
  • Competition with other stores
• Shrinking Middle Class

  • Stagnated income
  • income didn't increase per year
• Why did Nordstrom leave Canada

  • No potential for profitability
  • Sales depended on tourisms on the West Coast and from China
  • Pandemic
  • Competition from Hudson's Bay
  • Expanded too fast
  • 97% of the sales were from USA
  • Nordstrom rack- clearance (not appealing)
  • Could not get good real estate
  • Market is not there for luxury due to the shrinking middle class
• What did Nordstrom do wrong

  • Didn't understand Canadian market - misjudged Canadian luxury market
  • exclusive value of their products - that type of customer not available in large in Canada
  • If they wanted an exclusive experience, customers who could afford it would not be lined up at Nordstrom, they'd be at Gucci
• Is there a place for the traditional department stores in N.A. today

  • YES
  • People like convivence
  • Everything in one spot
  • If you have money for LV you probably have money for YSL
  • Return rate is lower in person
  • Different buying pattern
  • NO
  • Less demand due to shrinking middle class - either at Gucci or Walmart
  • Selling to a shrinking market
  • Not keeping up with trends or customer preferences
  • People wanna buy dupes of high end items
  • Only want one luxury item