Pete Nordstrom on loyalty: ‘Being helpful and kind to customers pays off’

Nordstrom got in his start at the company working in the shoe department and worked his way up from there. According to hIm, the experience he gained from directly working with customers still helps him succeed in his role today. “[Working in the shoe department] is a very high-touch proposition that requires a level of commitment and service,” he said on the latest Glossy Podcast. “The humility you learn from that is also helpful.”

Aside from his executive responsibilities, Nordstrom also hosts The Nordy Pod, a podcast launched in February that gives Nordstrom fans an insider’s perspective on all things Nordstrom, retail and fashion.

This week, Nordstrom sat down with Glossy editor-in-chief Jill Manoff to discuss how Nordstrom prepared for the holiday season, and how the company takes a unique approach to customer service, innovation and operations.

Below are additional highlights from the conversation, which have been lightly edited for clarity.

The importance of quality customer service
“If you treat customers well, they like that. I know that sounds obvious, but [our motto] wasn’t much more sophisticated than that [when my great-grandfather created Nordstrom]. Over time, what we learned was that having good, friendly customer policies and being helpful and kind to customers pays off. It enables you to do more business and enables you to engender loyalty with customers. By the time [CEO Erik Nordstrom and I] came along, that train was clearly on the tracks. [Nordstrom’s] big differentiator is the way we serve customers. It’s not a secret; every retailer knows that service is a really important element.

My dad’s generation took that idea of customer service, harnessed it and made it a thing and made it a common objective and a goal [at Nordstrom]. The beauty of it is the simplicity of it. Also the way in which, no matter where you sit in this company, no matter what you do, everyone can bind to that. [Everyone] understands what we’re here to do: We’re here to make customers feel good and look their best. That’s it. Everything has to be in service of that. We’ve benefited from that. … [Despite] the challenges you might imagine that go along with maintaining a liberal returns policy, what we get [in return] is invaluable. There’s no amount of marketing or anything you could do to engender that kind of goodwill, that kind of word of mouth and that kind of loyalty. When you [serve a customer well], you can see it, in terms of the way you get more wallet share from that customer. So it’s a pure business strategy. … We have found and learned over time that, when you’re nice to customers and you treat them well, they buy more from you.”

Staying on top of retail trends
“It’s hard to imagine being successful in retail now if you don’t have multiple ways to serve a customer on their terms, rather than on our terms. What we’ve tried to do is set up our online part of the business to dovetail seamlessly with the physical part of our business: the stores. Essentially, it’s about leveraging all these physical assets we have [in collaboration] with what digital brings, which is a huge sense of convenience and choice, which is fantastic for customers. … There are a lot of operational logistics that go into doing that. [Nordstrom] has’t solved all that. We’re clear about what good looks like, but we’ve got to keep going. … The bar has been raised big time and we live in that world, so we have to compete for that.”

Staying true to the brand around the holidays
“The holidays are such a pivotal time and always have been — it seems like that’s [true] more than ever, though. There’s a lot riding on doing well in this important season. As such, there’s a lot of planning and preparation that goes into it. … We’ve had a long-held tradition around here where we try to celebrate the holidays one at a time. One of the things you will see is that we don’t decorate our stores with full Christmas or full holiday displays until after Thanksgiving. Customers seem to like that. [Yet] there are customers who want to buy gifts early or want to buy Christmas decorations. What we’ve had to figure out over time is, ‘How can we have a good gifting offer in October or November?’ … [We’re also thinking], ‘How can we sell that stuff without customers saying, ‘Oh, my God. Nordstrom is celebrating Christmas in September. What is going on here?” There’s some finesse to that, but ultimately, it comes back to giving the customers what they want and giving them choice. For those out there who want to get their Christmas shopping done early, we want to be viewed as a great resource for them, too — not just for the people coming in here with three days to go and need some heroic effort to connect them with the gift. Ultimately, what we’re talking about is, ‘How can we be more important to people who are thinking about gift-giving?’ [We want to be] more top of mind [to consumers], and to communicate that Nordstrom is a great place to go to buy a gift.”