LEARN HOW U.S. RETAILER NORDSTROM TAKES CUSTOMER SERVICE TO THE NEXT LEVEL
“Let me get my manager!” This all-too-common line is such a frustration for customers that it’s become a staple of television sitcoms. It’s also something you’ll never hear at Nordstrom.
The upscale, Seattle-based fashion department store, which is now gradually entering the Canadian marketplace, famously hits its customer service mark by giving its employees the autonomy to instantly make whatever decision will best solve the problem.
The company’s employee handbook doesn’t actually contain just a single line, “Use your best judgement in all situations,” as some sources have erroneously reported, but that concept is one of the core pillars of its service philosophy.
John Nordstrom got into retail when he and a partner opened a shoe store in Seattle in 1901, and based his business on service, selection, quality and value.
After he retired in 1928, his sons built it into the largest independent shoe store chain in the U.S. In the 1960s they purchased two clothing stores and merged them with their shoe business. In 1971 the company went public, and in 1988 opened its first location on the east coast.
With so many retailers in the market, Nordstrom uses its customer service to stand out. It employs people it can trust to make decisions, and then it gives them the power to do so.
Ten years later, it established its online presence at Nordstrom.com., which today is the fastest-growing part of its business, including its mobile shopping apps.
Nordstrom currently has stores in 39 states, as well as in Ottawa and Vancouver, and will open three stores in Toronto this year and next. Its business also includes its lower-priced Nordstrom Rack, luxury boutique Jeffrey, and personalized online service Trunk Club. It designs and contracts to manufacture its clothing lines in addition to brand names, and runs its own credit card and reward programs.
With so many retailers in the market, Nordstrom uses its customer service to stand out. It employs people it can trust to make decisions, and then it gives them the power to do so.
It doesn’t have an official return policy, instead handling returns “on a case-by-case basis with the ultimate objective of satisfying the customer” and without time restrictions, according to its website. Having the receipt is helpful but not required.
The website goes on to say that “We’ll always do our best to take care of customers — our philosophy is to deal with them fairly and reasonably; we hope they will be fair and reasonable with us as well.” Purchases made online can be sent back or returned to any store. (Nordstrom Rack has a more conventional 90-day, receipt-required, unused-only policy.)
The strategy has served the company well and generates most of its word-of-mouth advertising.
The most famous story is of a branch in Alaska that refunded a customer for tires bought elsewhere, even though Nordstrom has never sold them.
It’s almost certain that it never actually happened, but it illustrates Nordstrom’s success with its service: as outlandish as the story is, people believe and repeat it because it sounds like something the company would do.
But Nordstrom doesn’t just send people onto the sales floor and tell them to make people happy.
There are rigid standards that employees have to meet, which can include such mundane-sounding tasks as how to properly use the paging system, coming out from behind the register to hand over shopping bags instead of lifting them over it, walking customers to places instead of pointing to them, and being the “front line” between customers and third-party suppliers.
If a courier company hasn’t delivered an order, the Nordstrom employee will find out why, rather than telling the customer to call the carrier.
Of course, not everything runs smoothly. The company still gets complaints about its service in spite of how hard it tries, although it personally replies to each one it receives.
In 2014 it had to settle a $7.65-million class-action lawsuit for not paying commissioned sales staff for work they were expected to do before and after store hours. And it’s currently dealing with an overall in-store shopping slowdown that has hit hard at several retailers, including rivals Macy’s and Saks.
Despite its popularity, the company expands slowly, especially into new areas such as Canada where it takes the time to understand the unique market. That’s in sharp contrast to Target, for example, which blew in full-tilt but closed less than two years later when it failed to realize what Canadian customers were expecting in its stores.
But where Nordstrom is cautious with brick-and-mortar, it is aggressive online. It funnels about 30 per cent of its capital expenditures into its Internet business and created an in-house department to develop its shopping apps.
Store employees carry iPads that let them instantly search inventory, or check out a purchase on the spot without sending the customer to a cash register. The company also closely monitors Pinterest, a website where users collect photos of things that interest them.
Not only can shoppers tap their devices to buy from Nordstrom what they see on Pinterest, but also when items start trending on that site, store employees are instructed to move that stock to a prominent place in the store and hang red tags with the Pinterest logo on them.
Gradually rolling out its “fitting room of the future,” Nordstrom uses interactive touch-screen mirrors that can display products or call for a salesperson.
All of this is tied into the company’s focus of appealing to younger buyers who have grown up in an online world, and who aren’t interested in the traditional store environments familiar to their parents and grandparents. Older shoppers appreciate Nordstrom’s level of customer service, but younger ones expect it.
Nordstrom’s success boils down to one key factor: a strict and consistently-reinforced set of standards for customer satisfaction.
“We’ll always do our best to take care of customers — our philosophy is to deal with them fairly and reasonably; we hope they will be fair and reasonable with us as well.”
Employees are selected and trained within a rigid framework that gives them the knowledge and then the autonomy to do whatever’s needed to complete the transaction.
Nordstrom admits it’s always learning how to do better, but stands by the ideal that if a mistake is made, it has to be in the customer’s favour.
DEALER TAKEAWAYS
Obviously auto dealerships can’t mimic Nordstrom’s exact business model, but several of its policies could potentially work for your store.
- Empower employees: Hire those capable of responsibility and then give it to them. Customer satisfaction rises when employees cut through the red tape to get the job done.
- Train consistently and continually: Employees can’t do the right thing if they don’t know exactly what they’re supposed to do.
- Respond to customer complaints: Every complaint requires an answer. This includes online, where responding level-headedly to comments and trying to solve the problem makes your effort visible to others.
- Act on your customer’s behalf: Whenever possible, talk to your third party providers and suppliers instead of giving your customer their phone numbers.
- Invest in the Internet: Customers today do most of their automobile shopping long before they ever set foot in your store. Make sure you have the best possible online presence.
