How does this partnership fit into Nordstrom’s current brand management strategy?
How does this partnership fit into Nordstrom’s current brand management strategy? Will it appeal to its target markets? How will it allow Nordstrom to differentiate itself from the competition?
According to a Business Insider article written in 2014, Nordstrom’s brand management strategy was, to reach millennial customers. The introduction of brands like Topshop, as well as the expansion of Nordstrom’s outlet business has brought the bran exposure among the younger generations. The hopes of bringing in consumers through the outlet aspect, is that as they mature and gain more discretionary income, they will transition to the full-line stores (Lutz, 2014).
Nordstrom’s introduction of Topshop and Topmen worked to bring “Fast Fashion” into Nordstrom’s target market. According to Pete Nordstrom, president of merchandising, , “Fast fashion implies cheap, and that’s not what we’re after, it wasn’t about how we sell a bunch of really cheap T-shirts. It’s about how we deliver credible new fashion to the customer” (Clifford, 2012). The addition of fast fashion brands helped to differentiate them from their competitors through the acquisition of a line from a popular brand in the UK that was was working to gain more footing in the United States. The lines that it brought into Nordstrom allowed for more exposure, advertisement of exclusive items sold only at Nordstrom, and allows both brands to explore the demographic and market segmentation that they may appeal to.
Is this a risky move for Nordstrom considering the downward sales trends for Topshop in the UK?
I’m sure there was some risk involved it this decision, especially considering the downward sales trends for Topshop, but Topshop is still available at Nordstrom so it must not have been as risky as it could have been. I think the risk involved incorporating a fast fashion brand into a long standing, traditional retail giant, but with millennials quickly influencing the market space, what risk existed was quickly mitigated.
References:
Clifford, S. (2012, Jul 13). Conservative Nordstrom to sell trendy Topshop fashions. International Herald Tribune, 15. Retrieved from ProQuest
Lutz, A. (2014). Nordstrom’s Simple Strategy For Beating Everyone Else In Retail. Business Insider. Retrieved from https://www.businessinsider.com/nordstroms-business-strategy-2014-10
Respond to…
Currently Nordstrom brand management has been focused on more upscale and conservative fashion and not focused on discounted items. A good clothing department store should always be offering new and updated merchandise. Nordstom traditionally would appear to attract the older, more distinguished shopper. However, they also do well at attracting the younger generations and one way they do would be to bring in trendy brands such as Topshop. The Millennials will be a driving force in Nordstom’s online business and are a large group that purchase from Nordstom Rack divisions. Topshop and Topman will be sold at Nordstrom stores and through Nordstrom.com where younger generations prefer shopping and now have more to choose from with this new partnership.
Nordstom has been known for its excellent and personalized customer service. They are not known for selling cheap discounted clothing. So, if they continue to follow this original brand management strategy, they should do a good job at standing out from the competition. What appears differently about this partnership with Topshop is that new merchandise will be delivered on a weekly basis, which will encourage customers to come in more frequently. More importantly, Topshop has agreed to only sell some styles exclusively to Nordstom which gives them a competitive edge. I don’t believe it is a risky move. They will still carry their original merchandise but sprinkle in trendy options for younger consumers.
Clifford, S. (2012, Jul 13). Conservative Nordstrom to sell trendy Topshop fashions. International Herald Tribune, 15. Retrieved from ProQuest
Respond to…
How does this partnership fit into Nordstrom’s current brand management strategy? Will it appeal to its target markets? How will it allow Nordstrom to differentiate itself from the competition?
Nordstrom, in large part, is recognized as an upscale department store with a great focus on service. Its target shoppers are middle age professionals, men, and women. Keep in mind that Nordstrom is a conservative department store chain.
Topshop brand does not fit into Nordstrom’s current brand management strategy because of the type of goods that are being sold, but it will help them reach a younger market.
The addition of Topshop fashions will open a trendier and younger market for Nordstrom. Topshop is a British fast fashion chain with a rock ‘n’ roll flair. Nordstrom has identified a strategic way to capture new customers and share a marketplace. As cited by Clifford “Department stores want to bring in young shoppers, and partnerships like this is a popular way to do it.” (Clifford, 2012. para 5.)
The union of these two companies will allow Nordstrom to be more relevant within a specific demographic that, prior to this addition they did not have. Topshop customers would probably not consider Nordstrom as a place to shop. In addition, Nordstrom will provide Topshop with a quick turnover look as it will be able to provide trendy looks for the carrier oriented clientele, and by remaining up-to-date with new fashion trends. These fashion styles are already known by the shoppers allowing the sale/move of these products to be faster as new trends are also released
The fact is that the partnership will allow a faster new fashion sale, luring the youthful customers, fresher marketing ads; enabling both companies to remain current with trends and wardrobes shifts.
There is some concern about the lack of discounts from Nordstrom stores and how this would affect their position in the market (Clifford, 2012). Even though this partnership comes with a greater risk for Topshop, as it pertains to Nordstrom’s brand, it will secure their brand and place them as a top competitor in the market. Only a selection of the brands distributed by Topshop will be exclusively distributed by Nordstrom.
This type of marketing strategy is practiced by other department stores like J.C Penney, incorporating fast- fashion brands in order to increase sales (Clifford, 2012).
Nordstrom will be different from its competitors because it will have products for the younger generation and carrier-driven customers. Professionals and teenagers will be able to shop in one place as they purchase clothes. It is a fact that youthful customers spend more than their parents in clothes, this is why it is a good way to increase revenue as the youth and their parent shop together.
Is this a risky move for Nordstrom considering the downward sales trends for Topshop in the UK?
The parent company, Arcadia Group business experienced a drop in sales. In the month of November and the annual revenue, sharing report indicated a 38 percent decrease and sales showcase a drop (Clifford, 2012). Even though this event is unfortunate for this parent company, Topshop continues to excel in the current market and sales. It was indicated that the U.S business market has a healthy condition and Topshop is expecting to grow 1 billion in business. In addition, the oldest Topshop store located in New York reported sales between forty to fifty million dollars (Clifford, 2012). Nordstrom will certainly benefit from the current increase in sales that Topshop is generating as an independent business. Moreover, both companies will be sharing their customers. A win-win situation for these companies. Nordstrom must maintain its brand identity in order to reduce all risk associated Topshop brand. Regardless of the differences, this partnership should prove to be a great addition to the Nordstrom line and Topshop younger clothing style.
Reference
Clifford, S. (2012, Jul 13). Conservative Nordstrom to sell trendy Topshop fashions. International Herald Tribune, 15. Retrieved from ProQuest.
