Nordstrom’s The 123-Year-Old Startup

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Nordstrom’s core mission is to make customers feel good and look their best. And the retailer is legendary for listening to the customer and delivering customer service that “is not defined by us based on our legacy practices. It’s defined by customers. The customer is still the best filter we have for every business decision we make,” according to Pete Nordstrom.

Two industry giants, Bob Spector, and Paco Underhill, join Robin and Shelley as they discuss how Nordstrom’s culture that is focused on the customer experience has been maintained over the course of 123 years … and counting. They discuss the role of technology in enhancing the customer experience and how to combine high touch with high tech. Don’t miss this fascinating look at the inside story and backstory on one of America’s most beloved retail brands.

Special Guests

Robert Spector: Author, The Century Old Startup: The Nordstrom Way of Embracing Change, Challenges, and a Culture of Customer Service

Paco Underhill: Author, Why We Buy, Call of the Mall, What Women Want, and How We Eat

*Transcript by Descript

Why Nordstrom, Robert? And how did you start this long term dive into one of America’s most beloved brands.  Okay. Well, uh, the, the, uh, I, as I, as I’ve spoken to you before, I, I used to cover Nordstrom as the Stringer for all the Fairchild papers. So I, I initially, um, met w with them just as a, as a journalist.

Back then in the, in the eighties, they didn’t want to talk to the, to, to the press, uh, only when stores were opening and earnings were up. Other than that, uh, you know, goodbye and good luck. 

Retail Unwrapped is a weekly podcast hosted by Robin Lewis and Shelley Kohan from The Robin Report. Each episode dives into the latest trends and developments in the retail industry. Join them as they discuss interesting topics and interview industry leaders, keeping you in the loop with everything retail.

Hi everybody, and thanks for joining our weekly podcast. I’m Robin Lewis, founder and CEO of The Robin Report, along with my podcast partner, Shelley Kohan. And today we welcome Robert Spector,  who is an international speaker and author.

We’ll be sharing thoughts around one of the most significant, relevant and notable companies in the world.  That would be Nordstrom.  And along with my good friend Paco Underhill,  and your author as well.  He’s the author of Why We Buy,  A Call of the Mall,  What Women Want, and How We Eat.  And uh,  he, he has endorsed Roberts in a new book,  and by the way, is one of the most knowledgeable people in the field of consumerism.

Just before we get started here, I would let, I would just like to say that  the spirit and really heartfelt devotion you have had for the Nordstrom over the many years. And generations of the families,  both personally and professionally, um, has been nothing  short of exceptional.  Therefore, I would like to dedicate this podcast.

Based on the recent passing of Bruce Nordstrom, I would like to dedicate the podcast  and  all of your loving thoughts in memory of the recent passing of Bruce Nordstrom and he was truly one of the industries guidance.  So now I welcome Robert and Paco in an  energetic conversation about Robert’s new book. Let me start off by saying that you have written actually four books on  Nordstrom,  the century old startup.

The Nordstrom way of embracing change challenges and a culture of customer service, which came out in January.  Four books over three decades with one company.  Why Nordstrom, Robert? And, and how did you start this long term dive into that? Into one of America’s most beloved brands.  Okay. Well, uh, the, the, uh, as I, as I’ve spoken to you before, I used to cover Nordstrom as the stringer for all the Fairchild papers.

So I initially  met with them just as a, as a journalist back then in the, in the 80s, they didn’t want to talk to the, to, to the press. Uh, only when stores are opening and earnings were up. Other than that, uh, you know, good bye and good luck. Uh,  over time, I, uh, I got involved with, um, a Nordstrom salesman, uh, named Pat McCarthy, who was Their top salesman, 15 years in a row.

The original idea was for me to ghost write a book about him.  Publishers are more interested in Nordstrom as opposed to the individual salesperson. And it went from my being the ghost writer to it being my, my book.  I understood the publishing business and I wanted to make sure that my, my, my name was first.

Uh, uh, so, uh, I, I got together with him. I got together with the then 3rd generation. So that’s Bruce, his cousins, uh, John and Jim and their cousin in law, Jack McMillan. And they knew eventually somebody was going to write a book about them. May as well be somebody in Seattle. And I had a good reputation.

I’ve written a lot of other books about Seattle companies and they gave me a basic, I wouldn’t say carte blanche, but I did interviews  with them as a group and also separately. And so over time, Nordstrom keeps changing, which is the premise of the century old startup. And, you know, that’s how they’ve been able to, you know, maintain their viability.

And, you know, to this day, they are still changing. They’re still being challenged, and everything old is new again, you know, brick and mortar is now getting, getting back to importance and they’ve been following that as well. And I get bored easily but Nordstrom never bores me, because they’re constantly changing.

And, you know,  the retailers that don’t survive,  don’t change. Or they don’t change enough,  but Nordstrom is in a constant state of change. They’re a different company today than they were five years ago. They’ll be a different company five years from now.  Wow. Paco, you want to jump in here and tell us? I know you’ve read the book, obviously, and you’ve seen  very highly of it.

You know, one of the things about retail is that there are all of the biological constants, the things that don’t change. 90 percent of us are right handed. I may be 6’4 my wife may be 5’3 but they’re the same ratios. of hand to mouth, hand to floor. Uh, our eyes age in the same way. Those are the things that stay the same.

But one of the things that, that Nordstrom’s understands, and Robert understands, and you do too, shift, is that what made a good store in 2000 and what makes a good store in 2024 are different, and they are a reflection of the evolution of us. And I agree with Robert’s very important premise that one of the challenges, particularly American retail, has had is, am I answerable to my investors?

Or am I answerable to my customers?  And the degree to which I put the customers first is really important.  The other theme here, which is I think an interesting one, and you’ll excuse me if it sounds a little cynical,  But the origins of Nordstrom’s are in a shoe store.  And it’s a shoe store where the staff knelt in front of the customer and help them try on shoes.

And I think the fact that they focused on the fact that we are helping somebody try on shoes and our success is based on that interaction.  Is a really critical one and the fact that they took that service theme from the shoe department and managed to apply it to the rest of the store, I think, is testament to their success.

Wouldn’t you agree, Robert?  Well, you know, Bruce, Bruce Nordstrom always used to say, you know, we, we grew up literally on our hands and knees taking care of the customer. And I think that’s both a literal and a symbolic way of how we run our business.  Bruce proudly called himself a shoe dog. You know, the, the, the,  is open in, in, uh, in footwear and in women’s wear daily.

I mean, that, that was the headline he, and he was proud of it.  He liked being in the, uh, in the fray.  Well, you know,  uh, I have worked on the shoe floor at Selfridges and the shoe floor at Macy’s over the years. And I think one of the interesting evolutions here, which, I think Nordstrom’s would have recognized is if you’re at Selfridges in London and you’re a English woman of a certain age, having a beautiful young man kneel at your feet is part of the excitement of the sale.

But if you’re at Selfridges in London and you’re a Muslim woman, having A beautiful young man kneel at your feet is not haram.  And that one of the transitions that we were able to make at  suffragists and at Macy’s was to have somebody look at that customer walking in the door and make some judgment as to who is the right person to serve.

That’s a great distinction.  Yeah, isn’t that a, I think that’s a very important distinction.  It’s looking at customers as individuals, not, not, not just a, a, a number, you know, it’s your point.  Okay, I mean, I mean,  this is one of the things in terms of the evolution of customer service. When I go to Dubai, I am often fascinated by the degree to which the staff looks at somebody coming in the door and go, is that the wife of a Somali warlord?

Or is that the wealthy wife of a Mumbai executive? And the degree to which they process it, understand it, and adjust their approach the same way. Bruce would have been very proud, because that was one of the things that he contributed to the broader world of luxury service.  So Robert, I know you have spoken all around the world, over 30 countries, and one of the things that you have mentioned is that you’ve walked away with two truths.

So tell us, what are these two truths?  Well, this is, you know, in addition to doing keynotes, I do breakout sessions and I go over the points that I make, I have people separated to groups and they brainstorm for 15 minutes, then they come up with a list of how this is how that principle can apply to what we do.

And so when I’ve seen people at all levels of the of the company, uh, make contributions to how they think that they can do their job better. So the 2 mutable truths are most people want to do a good job. And most people want to feel a part of something bigger than themselves. And it’s up to management to make that happen.

Now, I’ve been, uh, in sessions where it’s only the rank and file, the, uh, who are taking part in the brainstorming. And the executives, if they’re even there, are off to the side, working, doing their phone or talking among themselves. And the people who are doing the brainstorming, they look at that and say, well, they aren’t a part of what this is.

This is, you know, kind of a waste of time. Whereas at Nordstrom, whether your name is Nordstrom or, or, or Smith, you, you start out the same way, uh, on, on the floor, learning the customer and being, becoming a part of the culture. And that’s one of the things that separates Nordstrom from a lot of other retailers.

It’s a really good point. I’ve always said that. Employees, I really believe that employees don’t wake up in the morning intentionally wanting to go to work and do a bad job. I really believe that. And I think it’s the culture, the lack of support, tools, misalignment between skill sets and jobs work. So how, how has Nordstrom solved this problem for nearly 125 years?

Well, of course, they don’t bat a thousand. I mean, there’s there’s somebody getting bad service in Nordstrom somewhere right now. Uh, and but they again, you know, this is so simple. It’s almost embarrassing for me to posit this as a thesis, but it’s it comes back to making sure that every customer is happy.

And if they’re not, we’ll take care of it. Because as you can imagine, when I, when I talk in the U. S., people come, come up to me with their good Nordstrom stories, and sometimes their bad Nordstrom stories. But when they, they have a bad story, I say, you know, I ask, could you put that in an email, and I will send it to, then, you know, Blake Nordstrom.

And, and I’d be part of the, uh, of the, the email thread Blake  wanted to know, and he would personally send an email to that customer who had a bad experience, apologize to it and, and say, we are going to make it right. So when, when you’ve got the leadership, so  concerned and obsessed with, with, with the customer service.

It’s got to be.  I don’t hate. I don’t want to use the term trickle down, but it has to eventually come to the people on the floor, setting the example.  It’s not just the words. It’s setting the example. So you can see it.  I actually have a very, I’ve got many Bruce Nordstrom stories. I’ll tell you a very quick one.

Uh, I was at a party a few years ago in Seattle, a woman who had worked at Nordstrom, uh, some 20 years before it started her own businesses. She said, I was working in one of the women’s department at Nordstrom, and Bruce walked through the department, noticed somebody had left a can of soda pop on one of the counters.

So Bruce walked over, took the can of soda pop, put it in the wastebasket, and went on his way. Didn’t say, who’s soda pop is this? You know, why are you not taking care of it? She said  he was eloquent in his actions, and she said, it’s now 20 years ago, I’ve never forgotten that.  A great story, Robert. You know, and as Shelly said a few minutes ago, Uh, you do speak all around the world and, um, in the book and part of your, uh, keynote talk you deliver is a framework called FACTS.

F A C T S. Um, you know, and the values of our instrument and how for generations, Have lived by the values. Can you  tell us a little bit about these points?  Well, as I went over all those, all those books and saw the previous books and saw what would be the potential for a new book, which eventually became the century old startup.

Um, I, you know, I, I started, you know, making notes. So, you know, this is an example of, of, uh, flexibility. This example of agility and, and suddenly when I saw, as you know, this as an author concede, when I saw I could make an acronym, facts. Yeah. I just got the chills.  . This is great. So, um, so I, I, I gave examples from from the, the, the founder, John, John W, uh, being flexible enough, uh, when he was in, uh, uh, in the Yukon to, uh, uh, to make his money.

So he, he had made a claim. Somebody had made a competing claim. That person was the brother in law of the gold commissioner who settled all claims. He decided he was going to settle for in 1900, 12, 000, about 400, 000 in today’s money, and I’m going to take what I got now and not fight this. So that’s an example of flexibility, you know, with merchants going from a tiny shoe store to now they are. One could argue the preeminent department store in Manhattan, they have a brand new ad campaign, uh, you know, tying Nordstrom into Manhattan.

I mean, when you look at the arc of this company, I mean, that’s an incredible idea. I mean,  when I started writing about Nordstrom, nobody outside the industry in Manhattan even knew who Nordstrom was.  And here we are today, uh, so with that acronym and flexibility, agility, communication, transformation, social responsibility, uh, you know, customer service is wrapped up in all that stuff, but I made it very, uh, concise.

Easy to read. I’ve got great illustrations by my friend Keith Bendis who used to do William Sapphire’s cartoon column in the Times. And just to show this is, this is what you need. And, you know, you talked about my, my speaking. Most of the groups that I speak to are not in retail.  They’re in financial services.

They’re in health care. They’re in real estate, uh, et cetera. And I’m, I’m usually, and I’m sure Paco does this too. I’m usually the guy from outside the industry. You know, they’re tired of hearing the CEO’s voice, so they bring in somebody else to give them their point of view. Right? Right, Paco? That’s true.

That’s true. Yeah.  That’s great. I think, and it goes back to what Paco said earlier. I mean, it’s all centered around the customer, right? It all goes back to being, having the customer in the center. And it’s very easy to forget that, as you said, Robert, earlier about, you know, the, the, it’s the execution that’s difficult.

You know, the principle’s easy, the execution’s hard. Yeah. I have a, I have a quote from, from Pete Nordstrom, who’s the president and, and I think he’s, his title is chief brand manager. He said, this is about listening to the customer. He said, customer service is not defined by us based on our legacy practices.

It’s defined by customers. The customer is still the best filter we have for every business decision we make.  And this is after 120 some odd years. It’s still the same principle. I mean, you know, when I tell people, well, this is what Nordstrom does and they’ll say, yeah, and, and, you know, what else is, well, that’s it.

That’s it. But that’s a, that’s a huge challenge  and to infuse everybody in the organization, not everybody buys into it, that the customer is paramount.  I think Robert, there is, there is something else, just a little thread here to be very cognizant of, which is that Nordstrom has done a fairly good job of getting local,  which is under understanding what the difference is between the fashion needs of somebody living in Dallas versus somebody living in Seattle versus somebody living off of 57th Street in New York City.

And if you’re a well to do lady in Dallas, do you ever ride public transportation? The answer is never.  Um, but if you’re a well to do, successful businesswoman in New York City, do you ever ride public transportation?

Part of what that means is what your collection and choices are in terms of how you wear, what you, what you wear and what you wear.  And I think some of that on the ground paying attention to the customer is part of what’s been one of the challenges for the broader national chains here where you walk into a target in Palm Beach, Florida in January, and there’s a section of down clothing in it.

That’s a very good point.  Yeah,  there’s a lot of, you know, buying, uh, you know, and this is actually 1 of the things I wanted to mention, uh, Pete and Eric talked about legacy practices versus legacy values. The values change, the practices may change Nordstrom used to be when it was much smaller, it was decentralized.

And, uh, you know, when I, the, the, the, the, the salesman that I worked with in the, the, the very beginning of the book, um, he would, he would do a special order with, with, with a vendor if they didn’t have the particular size, he didn’t go through a buyer or anything like that, that was, that was okay. Then you can’t do that now with a 15 billion organization.

So it’s evaluating what are our legacy practices and are they still valid in today’s market?  Yeah. And you know what, Robert, I’d like to touch on this a little bit.  What is the role of technology, um, in Nordstrom, in enhancing a customer experience  and, you know, kind of, how do you combine high touch with high tech?

Well, you know, I’ve said that the, the, uh, website is, is, is high tech with a, with a,  uh, uh, a contribution from high touch and, and the stores are high touch with, with, with an element of high tech. So, Nordstrom has spent.  You know, billions of dollars over the years on on the tech technology, it all goes back to making it easier for the customer to buy stuff from us.

So, whether it’s an app, everybody has an app, but they, they, they try to  tailor it more to the to the individual customer. Um, I, I feature in, in the century old startup, a, uh, uh, Nordstrom salesman in Pittsburgh named Jesse James.  And he, he sells over 2 million worth of merchandise a year on Instagram.  He has an, he has a following of 100, 000 people on Instagram and he will open up the, the, the shoe box and, and romance the merchandise and take the, the tissue out.

And, you know, he has customers who he’s never met.  And never will meet. Uh, and they buy from him. They posted on their social media. It gets back to him and, you know, around and around we go. So he’s taking today’s technology and applying it to, you know, to being a good salesman today.  What an amazing story.

That’s really great. Um, so, you know, Robert,  I will tell you this, and, you know, I’m in touch with a lot of the C people, CEOs, as well as the C suites, and all of them, to  the last several that I’ve talked to recently, and continue to define Nordstrom’s huge competitive advantage. And it is that every decision made is driven by their customers and the consumers, as we’ve been talking about all through this podcast.  Um, yes, before, during and after, you know, their shopping journey.  So, the upside down organization chart  is not just talk, right? It puts all the associates kind of as ambassadors.  It puts them in charge.

And they can make decisions on the spot. And a lot of the, a lot of the stories you just told us about was around that. So the, the associate, the ambassador can make decisions, major decisions on the spot to serve  and really kind of exceed the expectations of the customer.  I remember way back when my early years with VF corporation  in the early eighties, uh, most retailers were just beginning to talk about  consumer intricity, which, you know, it’s kind of a buzzy buzzword that consultants use. 

It was all in the beginning kind of talk of the talk, but there was 1 outstanding. Retailer who walked the walk and we’re doing it every day. We can. And, uh, that’s Nordstrom and you obviously have had  four books that you’ve  written about them and all of these things over and over again.

And, uh, next time you were giving a keynote in anywhere around New York City, please. Let us know.  Absolutely. So, yeah. And I, I don’t know, Paco, do you have anything more that you wanna add?  Well, you, I just, I just wanted to share a personal experience, which  that I had with Nordstrom. Okay.  I am six foot four.

Um, I have, uh, really, uh, small neck and really long arms. Okay.  And a, a really good sized chest.  I met  and I can remember going to a Nordstrom store and finally find a shirt that fit me.  And I was so excited about the fact that this shirt fit me. And the salesperson said, well, we only have this shirt in the store, but I just looked up and we have 15 other shirts that are scattered across the network.

Would you like any of those?  And you know what? I went from buying one shirt to buying 15 and  they are still a very essential part of my repertoire. But it was that salesperson’s looking at my delight about finding it and finding something where he said, I can fit you.  And I think that’s one of the things that’s been very critical about giving the salesperson the tools to be able to not only make the sale, but to make the relationship and make the upsell.

Yeah.  It’s the, it’s the freedom to do that. And, you know, in my talks, I talk about the word empowerment. I would say if there’s a bigger cliche than customer service, it’s empowerment.  That’s an abstract concept. What does empowerment look like? So they have, uh, you know, Nordstrom will give examples for, for, you know, salespeople, this is what empowerment looks like.

Uh, I I’d recommend, uh, people go on to, uh, YouTube and, and search for Nordstrom diamond story as a diamond ring. And it’s about how, uh, people in, in, in loss prevention helped a, uh, customer find her diamond that had fallen off of her, uh, her ring. And it’s a little too complicated to get it now, but Nordstrom Diamond Story, I highly recommend it.

Wow, I’m definitely going to do that. So no big shocker to you or Paco that, uh, when we talk about customer service in my classes at FIT,  We Nordstrom’s is the gold standard. So I will be taking that YouTube video or wherever it’s at and showing that in my class. So thanks for that. And, uh, Robin, yeah, close us out here.

Yeah, I think we, we have gone over our time a little bit, but it’s been well worth it. It really has. And I want to thank Robert and Paco both,  but especially Robert  for his 4th book on Nordstrom. And I hope Bruce Nordstrom is somewhere in peace. Um, and I hope he was able to tune in today. Yes. Well, I, I  dedicated the, the, the book to, to Bruce and as I mentioned, I, I assisted him with his, his, his, uh, his memoir and, uh, I got a great, um, uh, uh, email from, uh, Eric Nordstrom, who said.

A few people got to know our father as well as you, and I take that as a high compliment. He was a great man. As I said, in dedication, he was a good man and a great man. And I miss him, but I value his, uh, the friendship I have with him.  Oh, that’s nice. Um, just for our listeners, next week, we’ll have Lisa and Lonnie on from Retail Strategies Group. We’re going to talk about a very, uh, complex topic these days, which is succession planning and retail. So should be a fun conversation.  And I want to thank everybody again,  and particularly Paco and Robert  and Shelley, you two.  And, uh, once again, if anybody listening has a topic that you would like Shelly and I to cover on one of these podcasts, just send me an email. And that’s Robin@TheRobinReport.Com. Thanks again, everybody.

Retail Unwrapped is a weekly podcast hosted by Robin Lewis and Shelly Kohan from The Robin Report. Each episode dives into the latest trends and developments in the retail industry. Join them as they discuss interesting topics and interview industry leaders, keeping you in the loop with everything retail.

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