Nordstrom Earmarks 15% of its Capital Budget to Develop Online Channels

The high end retailers have realized the importance of the internet and e-commerce as an alternative channel for direct sales. Nordstrom Inc., the upscale department store that has been ranked 34 in the Internet Retailer Top 500 Guide, had taken over the private sale site in February for about $180 million. The high valuation of the site indicates the importance e-commerce sites have acquired over the years. It is the fastest growing segment for a retailer and that’s the reason they are earmarking large sums of money for expanding their presence on the net and upgrading the techno logy regularly to provide a unique experience to the customers who encourage luxury spending.

Michael Koppel, CFO of Nordstrom, while talking to the media, highlighted the fact that 15% of their entire capital budget of $2.5 billion has been earmarked for investment in better technology, primarily for e-commerce. He stressed on the fact that the return on investment from e-commerce is higher than stores and much quicker. The future growth will come online and it is no surprise that it is cornering greater investments. Through the company aims to give upscale shoppers more ways to purchase luxury brands online.

Jamie Nordstrom, president of Nordstrom Direct is committed to developing a more personalized shopping experience for each customer. The internet, though is a small portion of their overall sale, it is driving the growth of new customers for the Nordstrom brand. It is only a matter of time before the online channel becomes the major part of their overall sales. Their increased activity on the net has resulted in smart growth in sales. For the second quarter ending on July 31 the sales have increased 12.5% to $2.7 billion. With an improvement in operating margins their net income saw an increase of 19.9% to $175 million.

Written By
More from Mayuri

Hermès Moves into Luxury Real Estate by Decorating an Apartment in Singapore

Luxury real estate has to project its exclusivity to appeal to the...
Read More

Leave a Reply

Your email address will not be published. Required fields are marked *