Writing Sample #3 (Educational)

Information:

• Institution: UC San Diego

• Major: International Studies- International Business

• Course: MGT 105: Product Promotion and Brand Management

• Assignment: Brand Assessment

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Since 1901, the mission statement for Nordstrom Inc. has been dedicated to, “provide outstanding service every day, one customer at a time;” making exceptional customer service one of the company's most admirable brand elements in the retail industry (Nordstrom History). After emigrating from his hometown in Sweden to The United States of America, John W. Nordstrom was a 16-year-old immigrant who experienced the American Dream before becoming a successful entrepreneur. From an old shoe-repair store to one of the world’s biggest fashion retailers, Nordstrom has strengthened their brand equity with more than 225 stores operating around the globe, engaging in the production of high-end “footwear, houseware, clothing, bedding, furniture, cafe, jewelry, and beauty” in order to satisfy their customer needs and wants through high levels of brand association (Nordstrom Retail Profile). Due to the Nordstrom wide variety of selection, their biggest parity-of-difference is their ability to attract a large target market. Although the company often targets itself more towards upper-class shoppers, through other branches such as Nordstrom Rack and loyalty programs, Nordstrom Inc. is able to accommodate more consumers. In addition to remarkable customer service, Nordstrom also has a high value for perceived quality as they consistently emphasize their superiority in the fashion industry. However, recently Nordstrom has experienced some political controversy with the current President of the United States, which have the potential to harm the company’s brand image. Because of Nordstrom’s ability to adapt and innovate in the fashion industry, while also constantly delivering incredible customer service and quality, the company has the potential to improve and differentiate themselves from their competitors.

Some of Nordstrom competitors include upscale department stores such as Neiman Marcus, Bloomingdales, Saks Fifth Avenue, and Lord & Taylor, who likewise specializes in the distribution of high-end fashion. However, Nordstrom has differentiated themselves from their competitors, not only by strategically positioning the brand back-story and venturing to off-price retailing through Nordstrom Rack, but the company has also gained partnership with FiftyOne Global Ecommerce in order “to penetrate the global market with its high-end fashion selection” (Storify). In recent years, there has been an increase in e-commerce, as consumers favor online shopping more than physically going to the stores. With the accessibility of the internet, more individuals find online shopping more convenient and easy than having to deal with the stressful environment of traditional shopping. During the first quarter of 2014, “more than 75 percent of shoppers” prefer to use the internet as a medium of shopping compared to other methods of shopping, contributing to the expansion of e-commerce (Gramigna). Additionally, online websites such as Amazon have dominated the retail industry, with an accumulated sales of “$16.3 billion, which is more than the combined online sales of Macy's, Nordstrom, Kohl's, Gap, and Victoria's Secret parent L Brands in the same period” (Peterson). In modern society, many consumers prefer online shopping over traditional shopping, especially with special offerings such as overnight shipping. From globalization, Amazon allows consumers to purchase clothing from different places around the world, however, Nordstrom is a more credible business who specializes in high-end clothing. With the addition to impeccable customer service, Nordstrom primarily market luxury brands will have better quality than most of the clothing items sold through Amazon. One method Nordstrom uses in order to combat Amazon is that they also offer overnight shipping and a loyalty reward program.

Although many shoppers prefer online shopping compared to traditional shopping, the brand attraction One of the benefits Nordstrom uses to manifest themselves in the customer mind-set is their loyalty program, which allows Nordstrom customer to enjoy an array of special events and discounts in-store and online. In addition to aesthetically pleasing visual merchandising, Nordstrom uses the customer loyalty program in order to gain more footfall in traditional shopping. By becoming a Nordstrom cardholder, customers are able to gain points for their purchases and use them towards other benefits (Nordstrom). Members with the most points have the accessibility to private sales and events, as well as complimentary services, like free dinner and tailoring. Because of its loyalty program, Nordstrom has branded themselves to be exclusive, which further attract high-end shoppers.

Furthermore, although forecasting sale revenue in the fashion retail industry is often difficult due to the unpredictability of the consumer market, inventory turnover and gross margin return analysis allows Nordstrom to perfect their pricing strategies. Nordstrom generates their revenue from two different segment- retails and credit- as retail contribute to “97% of Nordstrom’s revenues, while the Credit segment [accounts] for only 3%” (Bailey). Products sold at Nordstrom are more expensive, however, they use great customer service and quality to attract consumers. Nordstrom favors value-based pricing, “attempting to sell the right product at the right price,” which helps “ uncover the right blend of product quality, product costs, and product prices that fully satisfy the needs and wants of consumers and the profit targets of the firm” (Keller). Since Nordstrom branded themselves to be a luxury brand, consumers are willing to spend more money on premium prices for their product. Besides merchandising private products, the store also holds a variety of luxury brands such as Ferragamo, MCM, Burberry, while additionally giving customer difference choices in fast fashion like Topshop, Free People, and Adidas. Since the company gives consumer special rewards, more individuals are more willing to shop at Nordstrom and pay the premium prices for the product they want. In order to attract more customers, Nordstrom often offers private sales and pop-up collaboration to attract more consumers to become a member.

In the fashion retail industry, a company must be innovative and continue to be ahead of current fashion trends. More companies enjoy using temporary retail establishments or pop-up stores since more they are recognizing the benefits of pop-up shops, as they primarily generate buzz from large crowds (Vong). As one of Nordstrom’s marketing strategies to advance brand equity, they use pop-up collaborations in order to expand their brand name and target market. For instance, due to the recent globalization of Korean culture, many consumers have become captivated with the latest furor of Korean Fashion (K-fashion), Korean Music (K-POP), and Korean Beauty (K-Beauty) which includes the innovation of skincare, makeup, and hair care industry, making the products highly desirable to consumers. Nordstrom has recently introduced their collaborative pop-up with more than “500 products (including some being sold in the U.S. for the very first time) for the next seven weeks,” which includes popular Korean brands such as Too Cool for School, Glow Recipe, and Onnu (Wu). Korean skincare is usually referred to as the “future of skincare,” as critics often rave about the innovation of these beauty products; however, most of these products are only available in South Korea (March). With the usage of pop-up collaborations, Nordstrom has the ability to brand themselves as innovate as they have the influence to bring different brands into their stores. From the usage of pop-stores, Nordstrom can increase their revenue and keep consumers intrigued with their brand. Another prominent pop-up collaboration that distinct Nordstrom from their competitors is the unveiling of Gentle Monster into their stores, as they are the only department stores who carry these luxury sunglasses (Lipton). Since Nordstrom expands its inventory with collaborations such as K-Beauty and Gentle Monster, the company is able to generate more awareness and excitement from consumers. In addition, since most of these items are only sold at Nordstrom, the company has branded itself to be more unique compared to other luxury department stores, as they have a better selection. One of Nordstrom best brand attributes is that they have the ability to differentiate themselves from other department stores through loyalty programs and a huge inventory. However, although Nordstrom has prestigious brand recognition, recently they have been popular in the media for some political controversy.

Due to Donald Trump’s flagrant speeches, his election into the presidency for the United States of America has sparked controversy; both domestically and internationally. As a result of individuals’ discontent with the election, several weeks into Trump’s presidency, protesters use the “#GrabYourWallet campaign” in order to boycott all Trump-related businesses; Nordstrom being one of the main businesses to be financially affected (McGrath). The campaign is used as a medium for boycotters to voice their opinions about some of Trump’s policies, and illustrate the influence of consumers. Since numerous individuals are dissatisfied with President Trump and his policies, they boycotted all business with Trump affiliations, as consumers demanded business to discontinue business with the Trump family. However, after Nordstrom decided to discontinue the sales of Ivanka Trump’s product in their stores, Nordstrom experienced a “backlash on social media, with some Trump supporters calling for a boycott” (Arnott). Nordstrom’s conflict with political issues will harm the company financially, as well as, the company’s brand recognition. A company must refrain from political issues, as consumers may be offended by a company’s political opinions, which can cause damage to the brand’s image. Since Nordstrom decided to discontinue the sale of all Ivanka Trump products, the company have lost valued customers to other department stores, such as Macy’s, who still sells Trump's products. However, Nordstrom used the immigrant background of founder John W. Nordstrom, stating that immigrants “unique qualities brings a richness that allows [Nordstrom] to better reflect and serve the multicultural communities,” that develops and strengthens the company (Arnott). Through Nordstrom’s statement against the backlash of consumers from discontinuing Ivanka Trump’s product, the company illustrates strong ethics and morals, which strengthens the brand status. Often times, companies face adversity after associations with politics, however, Nordstrom would be an ideal example of a company that efficiently dealt with the situation and moved on, focusing more on their ethics than their profit.

As the world becomes more technically advanced, many companies are using different means of the technological platform in order to advertise their products to consumers. Nordstrom uses social media as their main platform of advertising to millennials; while they depend more on word-of-mouth from customers to appeal to older consumers (Nordstrom Retail Profile). From Nordstrom excellent customer service to their generous return policy, the company enhances consumers’ experience at their stores in order to gain more publicity. According to the Professor of Marketing, Kevin Lane Keller, in the textbook “Strategic Brand Management,” some of the best “brands are able to avoid extensive advertising or lavish marketing campaigns, relying more on word-of-mouth and publicity.” Nordstrom has been able to strive away from expensive campaign ads to strengthening customers tides through great experiences. Customer satisfaction allows for a company to save in advertising since consumers are willing to share their shopping experiences with others. From personal experience, Nordstrom stores consistently deliver prodigious customer service and benefits for their customers.

Besides the customer service aspect of Nordstrom, the company also provides excellent benefits, such as price matching and generous return policy. Since customer satisfaction plays an important role at Nordstrom, they do not have a time limit for returns or exchanges. Although limitless returns and price matching have the potential to harm the business’ profit, Nordstrom has branded itself to be one of the leading retail department in terms of service. Personally, Nordstrom has allowed me to return products that I purchased a couple of months ago, regardless of the item were resellable. Furthermore, the store often hosts private events with special discounts and high-end catering for individuals part of their reward program. As consumers gain more points, some of the other rewards for being a Nordstrom member includes a free dinner or spa.

Over the years, Nordstrom has developed and strengthened its brand equity to appeal to consumers. Their mission statement states that they will provide excellent customer service, which distinguishes them from their competitors. Nordstrom Inc. constantly innovates themselves in order to stay ahead of trends and attract a larger consumer base. Although Nordstrom has experienced some political backlash, the company’s ability to illustrate ethics allows them to gain the trust of the consumer market. Overall, because of its efforts in customer service and word-to-mouth advertising, Nordstrom has maintained excellent brand management.