Nordstrom’s Best Practices and Behavior.

Nordstrom’s Best Practices and Behavior.

Abstract.

Nordstrom Inc. is a fashion retailer of shoes, apparel, and accessories for every group of individuals, young to the elderly. The company operates via multiple retail distribution channels, boutiques, discount stores, catalogs, and via the internet. Additionally, the company offers its products via subsidiaries, debit cards, credit cards, and private labels.  Erik Nordstrom leads the company’s executive management team as the CEO, who also serves as the Co-president and Director with Peter E. Nordstrom as the other Co-President and Director.

Over the past few years, the company has undoubtedly made changes to how they present themselves in terms of merchandise selection, among other changes worth with many of these changes regarding attempts towards customer satisfaction and desire for more modern and updated fashion varieties. However, the question is, among all these changes, what makes the company unique? What are the best practices that the company focusses on to stay at the top of other fashion companies? The likes of Saks Incorporated, Dillard’s Incorporated, May Department stores Company, Sears, among several other departmental stores.

Introduction.

The management teams of many organizations encounter challenges in establishing goals, visions, missions, objectives, culture, and client-based practices in the modern business environment. It is worth noting that there has been an evolution of practices from traditional approaches to contemporary customer-oriented approaches. In the present business environment, more stakeholders have been added to the organization. This addition, in complexity, calls for the management to strike a balance and warrant that all these incorporated stakeholders’ interests are maximized in the best possible way. Presently, due to prevailing market requirements and industry conditions, most organizations are personified by revolutionary leadership styles..

Since change is inevitable, many organizations now have embraced sure ways of adapting to change. One of the surest ways an organization adapts to change is by the establishment of an organizational culture that sets the practices and procedures that characterize the organization and identify its key practices, visions, missions, and values. Most organizations today have considered organizational culture as an important aspect of success. However, to some, it has been a source of failure. As such, it, therefore, crucial to ensure that organizational culture is modified in a manner that positively impacts the organization’s goals and objectives. This paper highlights some of the best practices, including cultural practices and organization behaviors adopted by Nordstrom incorporation, that have sustained the organization as a leading fashion retailer in the United States since its inception.

Nordstrom’s mission and vision statements.

Nordstrom Department stores maintain a mission statement that focuses on working relentlessly to offer customers with the best shopping experience (Clifford & Hardy, 2013). The company is founded on the philosophy developed by the pioneer, John W. Nordstrom as, “to provide customers with the best possible service, selection, quality, and value. The company possesses a vision that still focusses on serving its customers better. To always remain relevant in the lives of customers and form a lifelong relationship with them. To operate within their statements of purpose, the company stresses on convenience, speed, innovation, and personalization as its cornerstone for customer satisfaction.

Company Perspective.

Since the company’s inception in 1901 by John W. Nordstrom, in Seattle, Washington DC, it has sustainably over the years established thriving business practices and principles among its family of employees and other stakeholders in aspects of value provision, quality products and services, best selection practices and service provisions (Spector, 2017). The company currently stands as one of the U. S’s leading fashion retailers, providing a wide variety of fine quality apparel, shoes, and accessories for children, women, and men from stores spread across the United States. The company maintains that it continues to be committed to the basic simple idea it was founded on, which is earning the trust of its customers, one by one.

Nordstrom’s Customer service practices.

For many companies, Nordstrom acts as a gold standard of customer service as they strive to imitate the practices that keep it at the top of customer value provision. This is promoted by the fact that Nordstrom does not structure itself as a single company, rather as an army of self-empowered and self-motivated employees and management team ((Spector, 2017).  The team utilizes its self-initiative principle to satisfy its clients based on Nordstrom’s model of customer service. Nordstrom’s model of delivering satisfying customer services is founded on various aspects that include:

1. Empowered employees. At Nordstrom, employees are completely and fully authorized to provide services of whatever is required in order to satisfy its customers. This practice is contrary to many organizations, which do not grant the same kind of real authority for employees to offer anything too meaningful to their clients.
2. Employees with a business-owning mentality. The company maintains a set of practices that are founded on wide discretion of taking initiatives in a manner that a client interacting with an employee, feels just like working with an owner of a small retail store. In order to provide value to the client, the employees take initiatives of acting without impediments.
3. The supportive management culture. As one of its best practices, Nordstrom maintains a full inventory with a deep and wide selection of materials, sizes, modifications, and others. This practice serves to establish a fertile sales environment thanks to its management strategy that focusses on strong investments in customer services.
4. A mystique for heroic acts stands out as an essential supporting idea or practice for Nordstrom incorporation. The employees maintained by the company are idolized to provide customers with services that could be considered above and beyond their call of duty. The company inspires its employees to deliver an exceptional degree of service to its customers.

Based on the policies and practices that the company is founded on, new hirers are made to attend a one-day orientation course and are offered with a gray card that represents an entire Nordstrom Employee Handbook. According to Jammie Baugh, the general manager for the Southern California Region, he narrates that providing authority and responsibility to employees indicates an ultimate expression of leadership. He confirms that at Nordstrom, an environment that empowers employees is given a priority given that the company assembles a team and allows them to fail only to be uplifted with a readily responsive management team.

The Essence of Nordstrom’s Culture.

To free employees and treat customers in a manner they appreciate has evolved to stand as the company’s best approach to its business objective. The entire organization structure of the company is designed to offer the flexibility required for its employees to achieve the set objectives and goals (Spectator & McCarthy, 2012). The company upholds a robust set of values and internal culture whose elements constitute the following:

1. Firstly, the company maintains a structure of an inverted pyramid, given that the entire staff works in support of the sales staff, as shown below.
2. Secondly, the company maintains an unconditional money-back guarantee, which stands out as an impressive return policy. The sales personnel are provided with the authority to refund the purchase price without any question even in circumstances that openly prove out insincerity of a customer. According to Nordstrom, it is unfair to punish 98% of people who prove out to be honest at the expense of only 2% dishonest ones. This principle of service distinguishes the company’s take on customers’ behavior.
3. There are no barriers to service for Nordstrom employees, given that any staff on the sales floor can authorize a sale of merchandise from any department therein. This practice frees the sales staff to aim at meeting customer needs instead of getting them restricted to the only department they are based on.
4. The company upholds a policy of hiring its managers from within the company, particularly those who begin as sales associates rather than conducting external recruitment. The focus of the company is to have a management team to understand what serving customers involves firsthand.
5. For Nordstrom, buying of merchandise is decentralized. As such, every region constitutes a buyer who orders merchandise only for a few groups of stores. This practice offers flexibility to purchase stocks that corresponds to the local tastes and lifestyles. Moreover, the purchasers are provided with advice from the sales associates and departmental managers who possess a shared feeling of ownership for their business unit.
6. Nordstrom upholds a sales-commission-based compensation as employees are paid in accordance with their abilities and efforts. However, the company offers supplements to the compensation plan via retirement plans that are based on profit sharing revenue arrangements. This system of compensation encourages loyalty and serves to motivate employees.
7. Regular and ongoing goals are required to be set by employees. A practice that designated sales associates, all managers, and buyers to set yearly, quarterly, monthly, and daily goals. The company closely monitors the results in comparison to previous results achieved. Recognition and praises are given to the performing staff. The best-selling persons who meet or even surpass their targets and goals are regarded as pacesetters. They are given award certificates, events in their owner, credit cards for purchases under a 33% discount, or business cards extolled with their designations of a pacesetter.
8. Additionally, the staff who outstandingly deliver excellent services above and beyond normal expectations stand to be nominated for an employee of the month award, to the weekly VIP club.

How Nordstrom establishes a captivating Organization to Visit.

Given Nordstrom’s objective to always build a memorable experience for its customers, its stores are considered to be the facet for the way manner in which the company offers superior customer services. The critical components and fundamentals that integrate to form a memorable shopping experience at Nordstrom correspond to its sphere of influence contributed by after-sales services, among other services such as adequate free parking and valet parking during busy sales seasons. The company relies on ease, convenience, and openness that boost customer experience during shopping (Spectator & McCarthy, 2012). The company also maintains a circular design ranging from the escalator to walls that do not pose to be divided between departments that enable customers to have an unobstructed view of the whole store. The shop is made to offer comfortable places to shop, given its warm and cozy furnishings—approximately 50% of the floor space allocated for the selling store.

Furthermore, the company focusses on every facet for customer comfort. According to its manager, the company attributes its outstanding customer value experience to its attention to detail ability. The company, too, provides a variety of restaurant and food services to its clients in response to the changing consumers’ tastes, for the reason that today, most shoppers carry along with children or doing shopping during times that necessitate restaurant services such as shopping at lunchtimes (Clifford & Hardy, 2013). The overall quality of the shopping experience is enhanced and magnified by offering shoppers the opportunity to relax, sit, and have something to eat without leaving the store. David Lindsey, the vice president in charge of the store planning, narrates that, “The whole point of everything we do is to make the customer happy for the long haul. If people are satisfied and excited about the experience of shopping at Nordstrom, they will come back. And if you haven’t created that atmosphere, they won’t come back. It’s just that simple.’’

Nordstrom Best Practices and Employee Behaviors for adoption by other Organizations.

The employees and managers who succeed under the Nordstrom system of performance, constitute those with entrepreneurial spirit or mindset.  The company comprises staff members who are motivated, flexible, and dedicated to serving their customers. For other organizations intending to create and strengthen this kind of behavior or attitude to its employees has to consider encouraging its employees to think and act like entrepreneurs (Kopelman et al., 2012). These organizations have to hire nice individuals as opposed to concentrating on the experienced ones. Hiring nice people and teaching them how to perform their duties with a lot of motivation and self-drive stands to provide positive results compared to the former approach.

Organizations seeking to initiate best practices based on what Nordstrom embraces, it has to consider hiring its staff based on the ability to handle various responsibilities other than the primary job requirements as a means of ensuring maximum flexibility. Companies need to establish minimum operating rules. Copying from Nordstrom, where salespersons are left free to focus on creating satisfied customers in a manner that they are not worried about inadvertently breaking one rule or the other. Furthermore, setting higher expectations for the workers serve as a mechanism for natural selection where only those deemed fit survive. That means that all the staff to be evaluated based on achievement and how they adhere to the organization’s guidelines.

To encourage individual creativity, possess as one of the primary ways an organization would emulate Nordstrom’s way of conducting proper business practices. Workers to be empowered to work in a manner as if they owned the business.  A sense of shared ownership gives an opportunity for a productive and new system to bubble to the surface. Just like Nordstrom, companies to emulate by upgrading and improving their performance on a daily basis. Nonetheless, just as outstanding customer service stands out to be the primary key at Nordstrom, so should those organizations dealing directly with its client, for instance, the merchandising sector businesses. Nordstrom optimizes its sales results by the development of many tools and techniques, and as such, emulating organizations have to set in techniques to enable its processes and functions to be considered “high contact” as well (Sibbet, 2012). These techniques may include the maintenance of personal customer books by all the sales associates and departmental managers of the organization.

Also, the techniques may constitute workers being enabled to make and maintain intensive telephone calls and contact to clients and other external individuals crucial to the organization (Sibbet, 2012). Such needs for maintaining contact would include telling the clients and customers about the new items, following up on inquiries and other leads, advising to clients regarding the products and services, keeping frequent customers and potential ones in touch with the present needs., and as a way of strengthening customer service relationship.

Lastly, organizations seeking to emulate Nordstrom need to emphasize gaining customer trusted. Nordstrom’s success stems primarily from its robust ongoing association with its customers. Companies have to ultimately focus on customer service relationship, to the extent that their clients would take their service providers as a valuable resource. Just the way sales associates at Nordstrom embrace sending of short handwritten thank you notes, to gratify their customers, so should other organizations intending to maintain good service delivery to customers in order to win their trust. These thank you notes, and appreciation messages do as well serve to generate referrals and other business opportunities for the organization. Eventually, the remuneration system should as well be taken into greater consideration, given that money and rewards represent the primary motivating factors to the employees ((Sibbet, 2012). Setting the remuneration system to be based on commission integrated with other benefits such as health insurance covers and social security benefits (retirement benefits) increase employee motivation, and as such, a positive impact is directly driven to link with the customers.

Conclusion.

Most organizational behaviorists posit that culture stands to be the primary performance facilitator among employees. In response to this belief, Nordstrom stands as one of the successful business organizations that have adopted cultural values for its employees. Through their policy on conducting an intensive orientation program to its new hirers, maintenance of performance-based remuneration, employee empowerment roles, reward systems, and owner mentality, the company has been able to gain significant trust from its customers. Generally speaking, in Nordstrom, there are several assumptions that do guide organization, culture being the most influential assumption that explains the company’s success. This is so, given that the organization operates under policies that require employees to work on whatever their capacity allows ensuring customers do not leave without making a purchase. This, to a great extent, describe the company as it comes out as a norm.

Based on the old saying that customer is always the king, Nordstrom follows the saying by maintaining a customer-focused culture; thus, its best practice for survival in the contemporary complex business environment. The company does this by keeping a close eye on the customers’ needs in a way that has proved to the company that it is easy to deal with customers. As such, more revenues from sales are reported. Focus on customer satisfaction has assisted the company in reinforcing the value of the organization. This gain in value is primarily attributed to the company’s best practice and focus on employees’ possession of behavioral patterns that have been articulated in their subconscious mind. Therefore, it is worth noting that focus on employees’ behavioral pattern promotes organization culture and values.

Reference

Spector, R. (2017). The Nordstrom Way to Customer Experience Excellence: Creating a Values-driven Service Culture. John Wiley & Sons.

Spectator, R., & McCarthy, P. (2012). The Nordstrom Way to Customer Service Excellence.

Kopelman, R. E., Chiou, A. Y., Lipani, L. J., & Zhu, Z. (2012). Interpreting the success of Zappos. Com, Four Seasons, and Nordstrom: Customer centricity is but one‐third of the job. Global Business and Organizational Excellence, 31(5), 20-35.

Clifford, S., & Hardy, Q. (2013). Attention, shoppers: Store is tracking your cell. New York

 Sibbet, D. (2012). Visual leaders: New tools for visioning, management, and organization change. John Wiley & Sons.Times, 14.