Two ways Nordstrom is adapting to the Amazon era

Key Points
  • Nordstrom will soon offer shoppers across the U.S. the option to "reserve online and try in stores."
  • The retailer is investing in new ways to bridge its physical and digital businesses.
  • E-commerce is expected to grow 8 to 12 percent this year, compared with retail growth of 3.7 to 4.2 percent, according to the National Retail Federation.
Two ways Nordstrom is adapting to the Amazon era
Two ways Nordstrom is adapting to the Amazon era

As shopping continues to shift away from brick-and-mortar stores to e-commerce, Nordstrom is investing in technology to connect its physical stores to digital.

Specifically, Blake Nordstrom, the company's co-president, announced plans to expand a "Reserve Online and Try in Stores" option from a handful of stores in Seattle to Chicago, immediately, and then to Nordstrom stores in all 50 states.

The company also added a feature to its mobile app that allows shoppers to scan an item in-store, but fulfill the order online. This is handy in cases where they want a different color or size than what's in stock, for example.

Traditional retailers have experimented with but been generally slow to adapt their businesses to e-commerce and mobile shopping behavior.

Meanwhile, Amazon is ramping up its efforts in apparel. It already has a $3.4 billion share of a $200 billion apparel market in the U.S., and realized a 25 percent increase in apparel sales last year, compared with industry-wide growth of just 3 percent, according to One Click Retail estimates.

It's becoming common for retailers to allow site users to buy online and pick up items in stores. But few retailers also allow users to shop from their phones within stores like Nordstrom is doing, or to reserve items just to try them on.

Nordstrom's second-quarter earnings, out Thursday, met Wall Street expectations, a rare feat for these days.

According to an Ernst & Young analysis conducted for the National Retail Federation, U.S. retail is expected to grow between 3.7 and 4.2 percent this year, while online and non-store sales are expected to grow more rapidly, between 8 and 12 percent.