Nordstrom Saw Digital Gains Over the Holidays As COVID Hurt Brick-and-Mortar Business

Sales at Nordstrom Inc. took a tumble during the holiday shopping season, but the retailer’s digital business continues to pick up more shoppers.

The department store announced yesterday a roughly 22% drop in sales for the nine weeks ended Jan. 2. (That figure was in line with the company’s expectations.) E-commerce, however, advanced 23% over the prior year and represented 54% of total sales, compared with 34% during the same period in fiscal 2019.

What’s more, approximately 11% of Nordstrom orders were made via buy online, pick-up in store services, which grew more than 20% during the week before Christmas. At NordstromRack.com, about 9% of orders were picked up in stores. More than 30% of customers’ online orders, it added, were fulfilled by its brick-and-mortar locations.

“We’re encouraged by the increasing momentum throughout and following the holiday season as we continue to unlock new ways to better serve customers on their terms with greater convenience and connection,” CEO Erik Nordstrom said in a statement. “By leveraging order pickup and store fulfillment capabilities across our two brands of Nordstrom and Nordstrom Rack, we’re seeing benefits to our customers as well as to our business.”

He added, “We’re deeply appreciative of our team’s focus on providing customers with a strong holiday offering during these challenging times.”

Department stores have been hit hard by the coronavirus pandemic: Lockdowns forced the temporary closures of nonessential retailers across the country for several weeks and subsequently drove consumers to e-commerce giants like Amazon.com or big-box chains such as Walmart and Target. A surge in COVID-19 cases further threatens companies like Nordstrom, which only recently became a “majority-digital business.”

“We would not be where we’re at today if it wasn’t for COVID,” Erik Nordstrom told analysts during a conference call in late November. “That got us very focused on embracing the new world where we’re a majority-digital [business].”

Following the results of its holiday performance, the Seattle-based retailer expects to deliver positive earnings before interest and taxes as well as operating cash flow for the fourth quarter. It is set to host its virtual investor event on Feb. 4 and report Q4 numbers on March 2.

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