And why is that? You can thank the Internet.
When asked if the company’s decision to price-match competitors in online retail would continue to impact Nordstrom’s bottom line, President of Stores Jamie Nordstrom told analysts on a conference call that the philosophy remains the same.
But one thing is different: The competitive environment has changed.
“We’ve always been competitive on price, nothing has changed about our stance,” Nordstrom told analysts as part of the company’s third quarter earnings call. “I think what’s changed is that the world has gotten a little smaller. We used to compete on price with the store across the street, and now it’s the entire world via the Internet.”
Nordstrom is taking a bunch of different approaches to those challenges, including its HauteLook flash sale subsidiary, and Trunk Club, a customized men’s shopping service Nordstrom acquired earlier this year.
Overall, the decision to remain competitive on pricing is an important one for Nordstrom’s business, because online retail is very sensitive to discrepancies in price between competitors.
“When, for any reason, we find ourselves behind, and not competitive, you can see it in the sales,” Nordstrom Chairman Blake Nordstrom said on the call. “If you are not competitive, you are not in the game in the long run.”
Nordstrom is engaged in turf battle with cross-town rival Amazon, which has been moving deeper into the fashion and apparel business. It’s a tough prospect to compete against Amazon — known for its cutthroat business practices and razor-thin margins.
But Nordstrom, smartly, started experimenting with online retail before many others. That gives the company a hope for survival in the ever-changing online retail world.
The comments from the Nordstrom execs come alongside good financial news for the Seattle-based retail company. Nordstrom brought in $3.14 billion in revenue during the third quarter of this year, which was an increase of nine percent year-over-year. That beat Wall Street expectations of $3.1 billion in revenue. Nordstrom’s earnings of 73 cents a share beat expectations by two cents per share.
The company’s stock is up almost 2-and-a-half percent in after-hours trading. Shares of the company are up 18 percent this year.
Previously on GeekWire: Interview: Jamie Nordstrom chats about the Rack finally going digital, 25 years later