How Nordstrom’s Anniversary Sale Became a Retail Phenomenon

In an industry filled with price promotions and shopping incentives, there’s nothing like Nordstrom’s Anniversary Sale.

“Anniversary is an event of scarcity. That creates excitement,” said Jamie Nordstrom, president of stores.

Nordstrom’s last Anniversary Sale ran from July 12 to Aug. 8, and each year after the event concludes, the retailer begins prepping for the next one. It’s about a year in the planning, and no small feat to pull off. It’s staged across the entire Nordstrom 100-unit department store fleet, and on Nordstrom.com.

The Anniversary Sale gives Nordstrom’s most loyal, highest-spending customers a first crack at shopping designer discounts on new fall styles, at 25% to 40% off. Other loyal but less-spending cardholders get access soon after, and eventually all shoppers get access to the event.

For Anniversary Sale, designers and brands — some of which typically have a large selection on the Nordstrom floor — might have three items, creating a sense of urgency and exclusivity. Nordstrom locations designate areas for Anniversary Sale merchandise and it’s always signed well. The very next day after the event, the remaining Anniversary merchandise reverts to full price.

The Anniversary Sale is Nordstrom’s biggest volume event, or sometimes its second biggest depending on the outcome of the holiday sale. The two events are usually close in volume, but always different in character, with Anniversary being more of a loyalty event and unique in the retail industry.

During the 2021 Anniversary event, sales increased 1% compared with 2019. “A compelling merchandise assortment, combined with new and differentiated services and experiences, contributed to strengthening customer engagement and improving financial results during our Anniversary Sale,” said Pete Nordstrom, president and chief brand officer of Nordstrom Inc. One hundred brands were added to the Anniversary assortment.

“In the past, it was primarily a fall and back-to-school load-up, with a lot of coats and sweaters,” said Jamie. “People don’t need that anymore. Over the last 10 years or so, you are able to buy in real time what you want and need. It’s more evolved to wear-now, with a broader aperture of merchandising.”

The executives said traffic and sales trends during the sale were strong across both digital and stores as customers responded positively to the expanded selection, better in-stock rates on top-selling items and enhanced capabilities, including convenient pickup options at Nordstrom and Nordstrom Rack stores.

This year, the timing of the event shifted. It straddled both the second and third quarters of 2021, resulting in a negative impact of about 200 basis points on the company’s total net sales in the second quarter compared with fiscal 2019. Adjusting for this timing shift, sales trends improved by about 900 basis points relative to the first quarter.

The Nordstrom Anniversary Sale has become an industry phenomenon, not only because of its popularity and revenue potential, but because of its unique format that hasn’t yet been copied by competitors. Retailing in July is typically in the doldrums and most department stores have racks of clearance and no new merchandise

But the sale is not a promotion or clearance. New fall merchandise is stocked just for this event, with buyers getting orders from vendors when department stores typically don’t get them, and Nordstrom achieving a surge in volume in an otherwise soft sales period.

The Anniversary Sale dates back to the early 1960s with Nordstrom’s acquisition of Best Apparel, which had been running an “anniversary” sale since the mid-1940s. Nordstrom has adapted the formula over the years, such as extending the length of the sale and providing early access for cardholders.

“Most of our focus is how to make the Anniversary Sale even more fun, how to create more engagement,” said Jamie. “Our customers love it because it’s fun. We’ve got to make sure we don’t lose sight of that aspect. You’ve got to get there first to get the best selection. It’s like concert tickets — you’ve got to get them before they’re sold out.”

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