Ahead of its Thursday (Feb. 4) meeting with analysts and investors, Nordstrom said it anticipates a 25 percent hike in sales this year as it focuses on smaller-format stores as part of its “Closer to You” growth agenda.
“We have a unique business model with two powerful brands, highly integrated digital and physical assets, incredible brand partners and employees who are truly unmatched when it comes to their commitment to the customer,” Erik Nordstrom, chief executive officer of Nordstrom, said in a press release on Thursday (Feb. 4).
“Looking ahead, we are building on the strengths of our market strategy to fully unlock the potential of the digital-first platform we have built to better serve customers, gain market share and drive profitable growth,” he added.
The Seattle-based upscale retailer’s new “Closer to You” long-term growth agenda includes expanding the company’s off-price chain, Nordstrom Rack, and advancing online sales, both expected to be the company’s biggest growth opportunities in the future.
Nordstrom’s market strategy will extend to its top 20 markets, which generate about 75 percent of sales. Some 50 percent of the anticipated revenue increase in 2021 is expected to come from online sales, compared with 33 percent in 2019. Longer-term, Nordstrom expects revenue to grow in the low single digits annually from 2019 levels.
This year rang in with a decrease in department store sales, with Nordstrom showing a reported 22 percent drop in net sales for the nine-week holiday period that ended Jan. 2. Nordstrom was the first retailer to earn most of its wealth from digital stores. Around 11 percent of orders from Nordstrom.com were picked up in the store, and that figure was boosted to 20 percent during the week of Christmas. Some 9 percent of store pickups came from NordstromRack.com orders.
Following the 2020 holiday shopping season, data showed that department stores struggled more in the shift to digital. For example, while overall sales were up 3 percent during the season, department stores were down 10 percent. And while eCommerce sales were up 49 percent for the season, department stores saw only a 3 percent increase.