Nordstrom is legendary for great service…. this is the retailer who will take back almost everything and standardized "the walk around" to hand off purchases at the cash wrap. It's no surprise then that Nordstrom's new website, launched last Saturday, is brimming with thoughtful details that put the customer first. Users can now search through products with ever more detailed screening options in every category. Following the mantra that "content is king" the site is building out a section rich with articles and video that feature archetypal customers and their favorite products.
What may be most important change on the site is one you can't see… the inventory policy. While it may sound boring, it's a minor revolution in the retail world that Nordstrom has been linking their stores' inventory with the website. Most web-storefronts treat inventory as wholly separate from stores… hence, a shortage on the website might lead a customer to shop a competitor even though the desired product is on the shelf at one of the stores. It's incredibly hard to implement, but by coordinating inventory between site and store, stores reduce overages, inventory holding costs and markdowns – all the while delighting customers.
As the New York Times reported this morning, the results for Nordstrom's bottom line have been powerful…. Inventory turns are at five-year highs and the company continues to deliver strong profits in a challenging retail environment.
Back in May, I wrote about the lame launch of Hermès new fragrance, Voyages d'Hermès. Their abstract, expensive and artsy campaign for a difficult to understand product category did not yield much of an online audience. Getting customers excited about fragrance before product trial is really difficult. So how do you successfully launch a fragrance if web 2.0 marketing strategy aren't effective?
Last weekend, singer Mary J. Blige offered the beauty business a powerful marketing lesson… showing that a potent combination of celebrity, insomnia and a good story goes a long way. Blige launched her scent, "My Life," on the Home Shopping Network (HSN) at midnight on Saturday and proceeded to sell 72,000 bottles in 24 hours, a HSN record. At one point in the day, HSN's servers crashed due to sales volume. Blige's personal narrative of triumph through struggle struck a chord with home shoppers, who called in and shared their own stories before buying the fragrance. Strong narrative is a powerful tool often overlooked in launching new products.
The success of the launch seems to have caught everyone off guard – HSN, industry watchers and even Ms. Blige were overwhelmed by the response. My guess is you'll start seeing Coty running this playbook before the end of this year.
Two weeks ago, American Express Publishing and marketing consultants at the Harrison Group released the 2010 Survey of Affluence and Wealth in America. The report details changes in the spending habits of wealthy consumers since the beginning of the Great Recession. This latest survey is an excellent indicator of long-term effects of the contraction, since consumers have emerged from their foxholes and are spending again.
One important trend documented is the emergence of wealthy "Precision Consumers." Whereas four-five years ago, these folks loosened their wallets in every category – from apparel to electronics to autos, spending liberally on everything. The Precision Consumer is still interested in luxury products but is better researched and more careful to purchase. They spend liberally in select categories where they feel luxury delivers value and fulfills explicit needs and wants.
This week, a MasterCard Advisors Spending Pulse report showed further evidence of the rise of the Precision Consumer. Spending in the electronics category is growing while apparel spending growth is stagnant. Of course, if you saw the lines outside of Apple stores last month, you didn't need to read a bunch of spending surveys to come to the same conclusion.
