Nordstrom 4Q16 Earnings Call Notes

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James Nordstrom

Move from things to experiences

“On the flipside, the fourth or fifth or sixth store in a market, we might look at differently today than we did in the past in terms of the role that it plays in driving business. So you’ve got two sides of the coin there. We think we have an opportunity to invest in those best stores in those malls that the developers are investing in and are creating better experiences, they’re doing great. In the malls that are not being invested in, are not, and those are some of the stores that you might see close. But overall, to the first part of your question, yeah, people said there’s a shift away from buying things to experiences, and I think you can see that around a lot of different parts of our industry and it’s debatable whether that’s a secular thing or a cyclical thing. We’re focused on having something new for the customer that they didn’t know they wanted to buy. And if we think we can stick to our knitting and focus on being that place of discovery, being that place where you come to find something new that that’s a winning strategy over the long-term.”

Peter Nordstrom

Some move to more of a seasonless thing

“Yeah, I think it’s true that customers are much more interested in buying now, wearing now. The idea that they would buy something and then put it in their closet for a couple months until the weather changed is not – I mean that’s changed a lot over the years. That’s just not a great scenario for us. So we talk a lot about making sure we got the product in the store at the right time for customers. I would also say that there is more a movement around season-less kinds of product, things that can be worn all year long. And we find – particularly since we do a lot of business in southern states with warmer climates that that’s where you see that happen to a greater degree. I mean you still have – weather drives a lot of business in colder-weather markets around coats and what have you, and that’s fairly predictable.”

Shopping happening in a more concentrated timeframe

“In terms of the shopping happening at specific times of the year, that is true. Events, holidays, what have you, drive a lot of business. And I would say most recent example of holiday – and we’ve seen this for the last several years – it continues to get more and more contracted where we still do a lot of business over a six-week timeframe. It gets concentrated increasingly into that last week. And so, we might feel like, well, the holiday season isn’t going very well. Then that last few days, it’s amazing, kind of how we make up for it. So the net of all that is we’re still doing the business; it’s just happening in a more concentrated timeframe.”