Conclusion

Over this semester we have learned a lot about Nordstrom and how it uses information technology as a company, as well as on a local level at the Menlo Park Store.

• Nordstrom company history
• Use of social media to target its consumers
• Databases used in-store
• Phasing out old hardware and bringing in the new -- Mobile POS and iPad
• Merging of Nordstrom Rack, Retail stores and online inventory to provide ease of service

ACKNOWLEDGEMENTS

Brian Sanders, store manager at Nordstrom of Menlo Park

Recommendations

Nordstrom is a very well established company. The company was built on superior customer service, and today the company has taken its' core values and is incorporating those values into modern technology. While many veteran companies witness the fast growth of technology and shy away from it, Nordstrom has decided to take it head on and use it to enhance it's business and relationships with customers. However, that being said, after speaking with Mr. Sanders we see that there are several points on which Nordstrom should improve.

SOCIAL NETWORKING

On a corporate, company wide level Nordstrom is doing an excellent job of trying to reach it's customers through the use of technology. Facebook and Twitter are amazing ways to get through to your customer on a very personal level. This instant messaging type of communication breeds open dialogue. Clients and customers feel free to voice their approvals, questions, and concerns. Nordstrom can use these things to do a better job of honing in on the consumer's needs and the best way to meet those needs. The Menlo Park store is not utilizing this powerful tool of social networking to the best of it's abilities. This branch should focus more on Facebook and Twitter to reach it's local customers. The store should set weekly goals and commit to increasing its online following so that more dialogue can be created amongst Menlo Park consumers. If Mr. Sanders had access to this kind of feedback he would then be able to train his managers and employees on what their customers are looking for.

VIRTUALIZATION

This store is currently operating on multiple databases.

• Direct-to-Customer ordering
• Personal Book
• Merch Serch
• Administrative

Multiple database systems and servers means LOTS of energy usage. Brian Sanders confirmed for us that the company running on several different databases. This not only makes it hard for the different departments to communicate with one another, but it uses up way more energy than necessary. If Menlo Park takes the necessary steps to consolidate into only ONE server, it will be reducing costs as well as energy, making the company much more planet friendly!

WASTED ENERGY AND ELECTRICITY

At the end of the night when the store is shut down and customers and employees are all cleared out for the night, hundreds of computers are left to run. These computers run throughout the entire night for approximately 6-7 hours not being used once. There is no benefit to this whatsoever. This is simply hurting the company by running up energy bills. The solution is simple: hire a private company like EnviProt Green IT, aka "The Power Saving Company." Specialists come in to install a simple yet very efficient program that will, "take full control of the shut-down, wake-up and sleep modes of your PCs and servers. With a program like this implemented, Nordstrom at Menlo Park saves money and lowers its impact on the environment.

Problem Analysis

Are silos a problem? Are enterprise systems a solution? Which type? Which evolution?

   Nordstrom uses customer relationship management information system to remain competitive in the retail industry. Nordstrom has a reputation for customer service and so most customers don’t really worry about price, but how they going to be treated at the store. At Nordstrom, silos are not much of a problem because the company has invested heavily in customer relationship which help different department’s communicate better or share information. Such innovations have been tested at the Nordstrom departmental store at Menlo Park. The have been experimenting on the IPad point of sale system to reduce customer wait time who are checking out with credit cards.
        More, Nordstrom is using an unnamed sled attachment to the iPod Touch, which enables the devices to be remote credit-card and barcode readers, obtaining inventory information from the scanned barcode and then allowing customers to pay by swiping, which generates an automatic e-mail receipt.  Such innovations however, in certain specialty departments are part of a broader effort to improve customer service.

Is business intelligence used? How? If not, could it be useful? Explain.

Nordstrom uses business intelligence in order to improve the entire company’s inventory in order to assist their customers as well as store employees. Nordstrom combined its online inventory and in store inventory altogether onto its Nordstrom website. By combining these two inventories, Nordstrom has made it simple for customers to be able to access any item that the company carries. This has brought huge success to Nordstrom in short time period and some companies having begun to follow this system.

For example, a customer is looking for a pair of designer shoes on the Nordstrom website. But this customer needs this item tonight for an event that she is hosting but she does not want to wait for the item to be shipped to her home. The customer has the ability to search that item and locate what particular Nordstrom that is closest to her and be able to have the item put aside and picked up that same exact day.

Another way this system helps is by making Nordstrom’s store employee jobs simpler. If a customer comes in a store with a print out of a handbag that Nordstrom carries but store employees comes to find out that this item is no longer in stock. The store employee has the ability to go on its Nordstrom website, go through its entire companies inventory to locate where this item can be found and store employee can easily ship it to the customer no charge added.

What types of hardware and software are used currently? Should they be changed?

Nordstrom is currently using Mobile Point of Sales (POS) and phasing out point of sales registers in the future. The driving force behind everything is using the tools of trade to help customers. Nordstrom in Menlo Park has started to use ipads and mobile registers to become untethered and make it easier for the customer to shop within the store. Mobile pos units (like The Apple Store) gives the  ability to assist the customer by scanning the item tag and locating through the store’s inventory to see if the customer’s particular size is in stock. It can also be used to see if a product is also located at another Nordstrom location and be shipped to our store. They can also show other options for other clothes and apparel like shoes, apparel, jewelry, furniture, etc. In the future, Nordstrom is considering sending “Rewards certificates” messages to its customers as they shop in store to their personal cellular phones or PDA phones. This would assist customers by notifying each customer of certain rewards that they are eligible for.

Is this an inter-organizational application? If so, what generation – e-commerce, Web 2.0, Enterprise 2.0? What tools are used?

Nordstrom uses some inter-organization application in its company in order to stay competitive with its rivals and keep their customers closer to them.  Nordstrom provides an e-commerce site for their customers to shop and/or browse through its entire inventory from any location with internet access. This e-commerce site has help Nordstrom to become more successful because it helps to generate more customers to the company. Customers can simply go on to Nordstrom.com and purchase any item that Nordstrom’s inventory and have that product delivered to their home in a fraction of the time it would take a customer to drive to the closest Nordstrom.

Nordstrom.com is very simple to navigate and it also provides several features that can be beneficial to its customer. For example, Nordstrom allows customers to review a particular item and have the opportunity to express their opinion on past purchased items. Nordstrom also provides a buyer’s guide to assist with certain items customers would have trouble on choosing. With buyer’s guide feature, customers are given a virtual stylist at their disposal and makes their Nordstrom experience unique.

        As well as E-commerce, Nordstrom also uses Enterprise 2.0 in order to stay connected with its consumers. Nordstrom as a company has recently made great strides with utilizing social media and social networking to enhance their business. Nordstrom’s greatest asset is its well established reputation, but the rapid growth of social media can take their business even further. However, Nordstrom on a smaller scale has not been as successful. Going store to store, Menlo Park being our focus, the company has not yet been nearly as successful.

         Here is what the store manager, Brian Sanders, had to say on the topic of social networking: As Brian Sanders, Menlo Park’s Nordstrom store manager said "Our store put tweets out but they weren't connecting with customers outside of the store because people wouldn't come to the Menlo Park Facebook page. People would talk about fashion that they like. It is better to use the company page rather than individual store Facebook Pages. Pinterest is now being used by customers by putting pictures of pieces of clothing and merchandise they like."

What database is used? What are some of the tables, reports and forms? What security? Changes/recommendations?

The database management system that Nordstrom uses is called the personal book. With this personal book, Nordstrom records the customer’s name, home address, telephone numbers, e-mail accounts, purchase history and also some interests of the customer. Personal information is recorded only by having the customer fill out basic information if a customer decides to become a member on Nordstrom.com or if the customer voluntarily gives his/her information to a sale employee in order to fill out the personal book.

Personal Book allows sales employee to follow through on serving the customer in a professional manner, and also ensuring that personal information that was provided is protected and secure. The Personal Book is of one of our most valuable tools Nordstrom uses to build and maintain a relationship with its customers. It allows Nordstrom to serve the customer in a numerous ways, including notifying a customer on alterations, repairs, or arrival of new merchandise, and also notifying about sales, special appearances and store events or promotions.

Nordstrom respects customer privacy, and take great care to safeguard information in their possession. The customer’s preferences for use of his/her information are Nordstrom’s highest priority. Nordstrom does not share any type of customer information outside the company unless customer tells them to do so. Nordstrom maintains physical, electronic and procedural safeguards to protect the confidentiality and security of personally identifiable information transmitted to them using company website. To guard customer information, Nordstrom's website uses Secure Sockets Layer also known as SSL. Secure Socket Layer encrypts your credit card number, name and address so only Nordstrom is able to decode your information. On Nordstrom website uses cookies and web beacons to distinguish customers from other visitors, track customer IP address and usage of Nordstrom’s website, and also to identify the name of the previous Web site from which the customer linked to Nordstrom.com.

What kind of networks are used by Nordstrom? Is there a  web server? Is cloud computing used? should it?

Nordstrom is a high end retail store which specializes in high quality apparels. Nordstrom Inc menlo park uses local area network systems to connect its computers at the local store branch. Since all the computers are on site or located at the store, Nordstrom runs fiber optic cables throughout the store. It uses the SOHO LAN, which consists of a few computers and printers linked together by a local network. The computers communicate through a mixture of  wireless and wired connections.  Nordstrom sues a network interface card which connects their computers and printers circuitry to the network  of cables.  

Nordstrom Menlo Park, uses Microsoft's  SOAP (Simple Object Access Protocol) to manage HTTP traffic by sending and receiving web pages for clients on the company’s website. Nordstrom uses B2B Integrator, which acts like middleware by receiving data from database, manage the items in a shopping cart, then coordinate the checkout process every time a customer. Nordstrom web server’s  also receive request from nordstrom customers  then  take action or fulfil the request. They also use Ionas XMLBus Web servers to control HTTP traffic on the company website.

Nordstrom @ Menlo Park: Social Networking

Nordstrom as a company has recently made great strides with utilizing social media and social networking to enhance their business. Nordstrom's greatest asset is it's well established reputation, but the rapid growth of social media can take thier business even further. However, Nordstrom on a smaller scale has not been as successful. Going store to store, Menlo Park being our focus, the company has not yet been nearly as successful.

Currently Nordstrom has approximately 42,000 followers on Twitter and 1.3 million likes on Facebook. In comparison, Nordstrom Menlo Park has a mere 6 followers on Twitter and 103 likes on Facebook. Here is what the store manager, Brian Sanders, had to say on the topic of social networking:

"Our store put tweets out but they weren't connecting with customers outside of the store because people wouldn't come to the Menlo Park Facebook page. People would talk about fashion that they like. It is better to use the company page rather than individual store Facebook Pages. Pinterest is now being used by customers by putting pictures of pieces of clothing and merchandise they like."

VS.

VS.

Business Strategy

Five Forces Model

Rivalry - Nordstrom's rivals are Bloomingdales, Macy's, Dillard's, Saks Fifth Ave, and Neiman Marcus.

Threat of New Entrants - Threats of new entrants is low. Many specialty retail stores have working relationships with their suppliers. Nordstrom also carries exclusive products made by Facconable. It would be hard for new entrants to gain licensing for exclusive products.

Threat of Substitute Products - Outlet malls and stores that sell "off-brand" items are threats. Buying directly from a designer, instead of Nordstrom, is also a threat of substitute products.

Bargaining Powers of Buyers - Power of Buyers is moderate because of brand image, and buyers are willing to pay what the price is set at for high-end products. As a conveinence to it's customer and to stay in competition, Nordstrom price matches with other retailers. 

Bargaining Power of Suppliers - Power of Suppliers is moderate because there are limited specialty retail stores. Department stores also need to carry certain brands. This gives the suppliers bargaining power for their products to sell at a reasonable price.

Competitive Strategy

Nordstrom's competitive strategy is differentiation through superior customer service, product quality, and continuous improvement. Erik Nordstrom, President of Stores, stated, “In simple terms, fashion is what sells. With compelling merchandise and unyielding commitment to customer service, we can be the retailer customer’s trust.” Nordstrom has personalized sales associates that research customers and assist them with their shopping. As soon as a customer walks into the store, the sales associate will know what type of clothes they prefer and they will guide them to a department that compliments their style. Nordstrom products are of the highest quality available, and they are presented in the most appealing way to customers. To have a competitive advantage, Nordstrom must continually keep up with the latest fashion trends, competitor activities and latest technological innovations.

Switching Costs

Nordstrom's switching costs are free shipping online; access to in store and online inventory;  superior customer service; a liberal return policy; and price matching.

Nordstrom has free shipping for it's online products. This costs them more money in the long run but it promotes customer loyalty.

Nordstrom has a perpetual inventory system that makes it possible to order items from other stores or warehouses if a certain store doesn't have an item.

Nordstrom focuses on customer service, if something goes wrong they are going to stand behind it. As stated above, they provide customer service by providing a personalized shopping experience. Nordstrom customer service can be contacted 7 days a week, 7 am to 1 am Eastern. They have U.S., Canada, and International hotlines. They even have seperate hotlines for beauty stylists, designer stylists and wedding stylists.

They have a liberal return policy, which means that practically any item can be returned with the receipt. If the customer doesn't have the receipt then employees can look at the customers purchase history in order to reimburse them.

Nordstrom is aggressive about price matching. They sell high end brands but prices are always comparable to other high end retail stores. Anything that is associated with the Nordstrom brand is going to be done right. 

Business Processes

Sales Process -  Turns finished goods into cash.

Information Systems

Nordstrom uses Personal Book,a computerized, company-wide directory, to store customer data like name, address, telephone numbers, e-mail address, interests, preferences, and purchase history. A customer profile can be created in order to log purchase history, which makes returns fast and easy. With the customer's information confidentially kept, future orders are done with ease. When email addresses are provided it becomes simple to keep up with Nordstrom's latest news and events.  Personal book used to be a paper book located in the store. It can be used for opportunities such as sending a personal note on a customer's birthday or thanking a customer for a past purchase. It is a product implementation and it is what salespersons use to enhance the customer's shopping experience. 

Accenture, a global management consulting and technology service company, helped Nordstrom implement a perpetual inventory system in 2002. Perpetual inventory enables employees to quickly find sizes, styles and colors at other Nordstrom stores by computer, providing customers with prompt answers and freeing salespeople to help other customers. Nordstrom utilizes RFID (Radio-Frequency Identification) chips in order to identify what items are in stores and what items can be found in warehouses or other stores. Before the perpetual inventory systems, employees had to call other stores in order to see if they had an item in store. It is a process implementation and it locks in customers because other retailers don't have Nordstrom's quality of customer service.