Nordstrom to offer home shopping

May 18, 1993|By Michael Dresser | Michael Dresser,Staff Writer

Nordstrom Inc., which built its reputation on how it interacts with customers face to face, is gearing up for a not-too-distant future in which its salespeople will interact with shoppers through two-way television screens.

The Seattle-based department store chain told shareholders at its annual meeting yesterday that it would launch a series of direct marketing efforts over the next several years, including a full-scale catalog operation and possible participation in televised shopping programs. But co-Chairman James Nordstrom made it clear that full interactivity is its ultimate goal.

"It's a format that closely matches the Nordstrom style of personalized service," Mr. Nordstrom said. "It is our intention to be a major player in this new arena."

Dan Nordstrom, general manager of Nordstrom's newly created direct sales division, estimated that 1 million U.S. homes would have interactive capability within three years and 50 million within 10 years.

"A good critical mass between three to five years is what we're expecting," he said.

As he envisions the process, you would turn on your television set and see a display similar to a computer screen, offering you a variety ofshopping choices. After choosing Nordstrom, you would be able to browse through a video catalog or get in touch with a "personal shopper."

The personal shopper would not only take your order, but also would be able to electronically lead you through various departments -- sometimes occupying the full screen and other times retreating to a small "window" in the computer screen so you could view the merchandise.

"It's going to feel as close to real shopping as you can get in your living room," Dan Nordstrom said.

Nordstrom was not interested in developing the hardware that would make home shopping possible, he said, but the company is holding discussions with potential partners who would provide the electronic infrastructure.

Nordstrom said yesterday that its first step toward television sales would be to launch its own full-fledged mail catalog service beginning next spring. Dan Nordstrom said the sales and distribution infrastructure Nordstrom would build for the catalog could form the basis for future television distribution.

The executive, who is James Nordstrom's son, said the company, which has 50 department stores and 13 Nordstrom Rack clearance stores, had been encouraged by the success of a private label catalog it sent out with little fanfare in January.

He said the new catalog would carry branded merchandise as well as private label merchandise, adding that he did not know what the relative mix would be.

The company's announcement also said its new direct sales division would explore the idea of using existing home shopping channels to sell its wares, but so far the company has not made any commitments.

If Nordstrom strikes a deal for a "Nordstrom Show" on either of the major shopping networks, it would undoubtedly be with West Chester, Pa.-based QVC, analysts said.

Its rival, Tampa, Fla.-based Home Shopping Network, is known for its hard-sell tactics and has been mired in controversy over its financial dealings.

Dan Nordstrom said the company was not holding negotiations with QVC but added that some Nordstrom officials have joined the parade of retail executives who have visited the network since former Fox Broadcasting Chairman Barry Diller became chairman of QVC early this year.

Mr. Nordstrom said company officials would be watching closely for the results of Saks Fifth Avenue's segment on the QVC shopping network this Saturday -- the first venture into TV sales by one of the leading upscale U.S. department store chains.

The reaction among industry experts to Nordstrom's announcement was mixed yesterday.

Jennifer Black Groves, an analyst who follows Nordstrom for Black & Co. in Portland, Ore., said Nordstrom's reputation would serve it well in the televised market.

"If anybody can be successful at it, I think they would be," Ms. Groves said. "The quality is not a question."

But Alan Millstein, publisher of the Fashion Network Report in New York, called the Nordstrom announcement a "defensive reaction" after the chain posted a 48 percent first-quarter earnings decline last week.

"Nordstrom management, since they just showed a lousy statement, has to pull a rabbit out of the hat," Mr. Millstein said.

He said Nordstrom's entry into televised shopping would do little to help the credibility of the once-scorned TV shopping medium because "Saks is the big enchilada" and it has already made its move.

"Even beleaguered Macy's is saying they're going onto TV," Mr. Millstein added. "It's fashionable to say you're involved now with one of the cable shopping networks."

Nordstrom closed yesterday in Nasdaq trading at $27.75, down 12.5 cents a share.

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