The Nordstrom Way

1. Nordstrom's culture of exceptional customer service drives its success

"We don't determine what good service is; the customer does."

Customer-centric philosophy. Nordstrom's entire business model revolves around putting the customer first. This approach permeates every aspect of the company, from hiring practices to store design to employee empowerment. By consistently exceeding customer expectations, Nordstrom has built a loyal following and a reputation for unparalleled service.

Service as competitive advantage. In an industry where products can be easily replicated, Nordstrom differentiates itself through its commitment to service. This focus has allowed the company to thrive for over a century, even as retail has undergone massive changes. Nordstrom's success demonstrates that exceptional customer service can be a powerful driver of long-term business growth and brand loyalty.

2. Empower employees to make decisions and take ownership

"Use good judgment in all situations."

One rule to rule them all. Nordstrom's famous one-rule employee handbook embodies its approach to empowerment. By trusting employees to use their judgment, the company fosters a culture of entrepreneurship and personal responsibility. This empowerment allows frontline staff to quickly resolve customer issues without bureaucratic red tape.

Inverted pyramid structure. Nordstrom's organizational structure places customers at the top, followed by frontline employees. Management's role is to support those closest to the customer. This approach:

• Encourages employee initiative
• Speeds decision-making
• Improves customer satisfaction
• Increases employee engagement and retention

3. Hire for attitude, train for skill, and nurture talent

"We can hire nice people and teach them to sell, but we can't hire salespeople and teach them to be nice."

Personality over experience. Nordstrom prioritizes hiring individuals with positive attitudes and strong interpersonal skills. The company believes these traits are more difficult to teach than technical skills. This approach ensures new hires align with the company's service-oriented culture from day one.

Promote from within. By consistently promoting from within, Nordstrom ensures that its leaders understand the company culture and have firsthand experience with customer service. This practice:

• Motivates employees
• Preserves institutional knowledge
• Maintains cultural consistency
• Provides clear career paths

4. Recognition and rewards fuel motivation and performance

"Recognition and praise are the best motivators I know."

Continuous positive reinforcement. Nordstrom places a strong emphasis on recognizing and praising employee achievements, both big and small. Regular recognition meetings, awards ceremonies, and public acknowledgments create a culture of appreciation and motivation.

Performance-based compensation. The company's commission-based pay structure incentivizes salespeople to provide excellent service and build long-term customer relationships. Additional rewards include:

• Pacesetters program for top performers
• Profit-sharing and stock options
• Opportunities for rapid advancement
• Non-monetary recognition (e.g., personal notes from executives)

5. Create an inviting shopping experience across all channels

"Everything we do is to enhance and romance the merchandise."

Thoughtful store design. Nordstrom's physical stores are carefully designed to create a welcoming, comfortable atmosphere. Key elements include:

• Wide aisles and open sightlines
• Comfortable seating areas
• Live piano music
• Spacious fitting rooms
• High-quality fixtures and finishes

Seamless omnichannel experience. Recognizing changing consumer habits, Nordstrom has invested heavily in creating a cohesive experience across in-store, online, and mobile channels. This includes:

• Buy online, pick up in-store options
• Shared inventory visibility across channels
• Consistent branding and service standards
• Mobile apps for customers and employees

6. Build long-term customer relationships through personalized service

"I sell a relationship."

Personal stylists and clienteling. Nordstrom encourages salespeople to develop deep, long-term relationships with customers. The company's personal stylist program and clienteling practices allow employees to provide highly personalized service, driving repeat business and customer loyalty.

Customer data utilization. Nordstrom leverages customer data to enhance personalization:

• Detailed customer profiles in salespeople's "personal books"
• Targeted communications based on purchase history
• Personalized product recommendations
• Tailored in-store experiences

7. Lead by example and maintain accessibility at all levels

"I was sitting here at my desk, and the phone rang, so I picked it up."

Hands-on leadership. Nordstrom's executives, including family members, regularly spend time on the sales floor and engage directly with customers. This practice:

• Demonstrates commitment to service
• Provides firsthand insight into customer needs
• Inspires employees at all levels

Open communication. The company maintains an open-door policy and encourages direct communication between all levels of the organization. Senior leaders, including the Nordstrom family, make themselves accessible to employees and customers alike, often personally responding to inquiries and feedback.

Last updated: November 18, 2024