Fortune

INSIDE NORDSTROM’S LABORATORY

No department store chain has been more aggressive than Nordstrom in embracing and experimenting with technology. But will all the tinkering entice fickle customers to keep coming back?
THE NON-STORE STORE The interior of Local, an experimental Nordstrom branch in West Hollywood where customers can pick up online orders and meet with stylists—but where no merchandise is actually sold.

RANK

183

COMPANY PROFILE

NORDSTROM

REVENUES

$15.5 BILLION

PROFITS

$437 MILLION

EMPLOYEES

76,000

TOTAL RETURN TO SHAREHOLDERS (2007–2017 ANNUAL RATE)

5.8%

THE NORDIES HAD WAITED DECADES for this day, and they were taking a few final moments to savor it.

On a damp morning in April, dozens of Nordstrom employees formed a long greeting line just inside the entrance to the upscale department store chain’s new location, on West 57th Street in Manhattan. The 117-year-old, Seattle-based company is one of American retail’s most respected names, but this men’s emporium, just a block from Central Park, would be its first full-service store in the nation’s fashion capital.

The party mood intensified with the arrival of Bruce Nordstrom, the octogenarian chairman emeritus affectionately dubbed “Mr. Bruce” by employees (“Nordies” is their shared nickname). When he led Nordstrom, Mr. Bruce had helped the company go nationwide; now he earned an ovation as he walked along the receiving line. The onlookers included his three sons, Blake, Erik, and Pete—now Nordstrom’s copresidents, and the fourth generation of the family to run the company.

As the 10 a.m. opening neared, the store manager hushed the room to give the employees a final pep talk. “Have fun out there, and focus on that one customer in front of you,” she said. The salespeople converged in a circle, pumped their hands, and shouted a Nordstrom mantra: “Let’s get ready for our world-class day!” The doors opened, and with that, Nordstrom finally had a horse in New York City’s high-end retail race, competing with stores like Saks Fifth Avenue, Bloomingdale’s, and Bergdorf Goodman.

But the 47,000-square-foot emporium is also a sophisticated shopping-tech laboratory—one of several where Nordstrom is urgently

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