Nordstrom has finally launched a standalone e-commerce site and mobile app for its Nordstrom Rack stores, offering shoes, clothing and accessories for 30 to 70 percent off.
Jamie Nordstrom, who is leading the Seattle-based retailer’s digital efforts as the President of Nordstrom Direct, said they’ve been working on various forms of the site for almost 25 years, but it’s never gotten off the ground until Monday.
“We joke about it around here,” he said. “I know I’ve been involved in a number of deep dives when it comes to bringing off-price online.”
But he said there’s a reason why NordstromRack.com took so long to launch, and that’s because it was so hard to do. What has changed in recent years, however, is the popularity of flash sales sites, such as Gilt Groupe, Rue La La and Groupon (which acquired Ideeli in January for $43 million).
Nordstrom entered that business in a meaningful way when it acquired HauteLook for $270 million (including a $90 million earn out) three years ago.
“That’s when we started to see a path forward, and we wanted to be involved in that. (That) led to our acquisition of HauteLook, and acquiring a team of talented people, deeply immersed in off-price and e-commerce world,” Nordstrom said.
That same team in Los Angeles is the one managing the launch of NordstromRack.com, led by Terry Boyle, president of NordstromRack.com and HauteLook.
In fact, NordstromRack.com shares a lot of the same features as HauteLook. Customers are able to shop both sites through a single log-in, and items from either site can be added to a single shopping cart. There’s free shipping on orders over $100, and there’s a 90-day return window, either by mail or at a local Nordstrom Rack store.
Further, Nordstrom explained that the two sites complement each other.
A customer may be drawn in by HauteLook’s sale, but he or she may end up buying something from the Rack catalog. They experimented with that idea a year ago when they launched Nordstrom Rack on HauteLook. “Having a persistent catalog of merchandise was a huge win for us, and is what spawned the current incarnation of nordstromrack.com,” he said.
Jamie Nordstrom, who is the great grandson of John W. Nordstrom, is known for making big bets that make the 100-plus year old store competitive against Amazon and others.
One big push it’s known for was making sure that online shoppers at Nordstrom.com could see what inventory was available at their local store. That feature is not yet available on NordstromRack.com, but he said they will get there someday. “That’s one of the ways it can evolve over time, but exactly how it will work, we don’t know,” he said.
When asked if Nordstrom Rack’s website will be competing against Gilt Groupe and the other flash sales sites, Nordstrom replied that it’s all of them and more: “I think the competition is the Internet. You can buy merchandise that we sell in lots of places. We are focused on creating valuable experiences for customers.”
For the others, Nordstrom’s entrance with the Rack brand will bring new competition at a time when the business has struggled to scale as fast as it was expected to. More than a year ago, Gilt Groupe was forced to layoff employees and put its IPO on hold, and while Ideeli’s sale to Groupon is a good outcome, it raised at least twice as much cash from investors as it sold for.
So far, it’s only been a couple of days for NordstromRack.com, but the company has plans to add new features to the site.
“The future is very open-ended,” Nordstrom said. “We do believe it’s a large business with large demand. We don’t know exactly how it will evolve, but we have a team in LA that’s really talented, and we are excited about the different opportunity.”