New Channels, Old Values

Nordstrom has long been celebrated for its old-fashioned values -- especially its over-the-top commitment to its customers. Of late, Nordstrom has also attracted attention for its embrace of the Web.

In November 1999, the company introduced Nordstrom.com, an ambitious effort to re-create on the Web the experience of shopping in one of Nordstrom's 106 physical stores. The site has features that physical stores simply can't offer. A case in point: Nordstromshoes.com, which sells 30 million pairs of shoes.

The launch of Nordstrom.com was accompanied by a marketing blitz that was devised to establish the brand as a leader in online retailing. The woman behind that campaign is Kathryn Olson, 42, Nordstrom.com's executive vice president of marketing. Prior to joining Nordstrom, Olson was vice president of global marketing for Monsanto. Before that, she spent 10 years at Quaker Oats.

In an interview with Fast Company, Olson talked about how marketing has -- and hasn't -- changed on the Net.

How has the digital economy changed marketing?

The most obvious shift has been from an emphasis on mass marketing to a focus on target marketing. The Internet allows marketers to develop one-to-one customer relationships, whether it's in the form of smarter direct marketing, more-intelligent email, or Web-site customization based on customer preferences. We have to keep getting better at customizing the online experience, because that's what our customers expect.

Another big change is real-time learning. Several years ago, when I'd run a print ad, it was hard to track its results. On the Net, we can tell in real time which marketing programs are the most effective.

How has the Net changed your relationships with customers?

The biggest change has to do with how we communicate. We don't just communicate more often; we do so more intelligently. We're able to customize our outgoing emails based on the sorts of things that individual customers want to hear about. If you're interested in women's apparel but not in men's apparel, then women's apparel alone is what you'll hear about from us. If you want advance notice about upcoming sales, or if you just want to hear about what's going on at Nordstrom Rack, our outlet store, we can send you just that information. Soon, we'll be getting information based on your purchase history, so that if we know you like DKNY, we can make sure that you know when we've just posted a new line from DKNY on the site.

How has the Net transformed the way that customers communicate with you?

We get about 20,000 emails a month -- and yes, I do read many of them. One of the nice things about email is that it's a new way to reinforce your old values. For example, a customer who had received some smoked salmon as a wedding gift several years ago, back when we still sold gourmet food in our store, sent us an email to say that he had not eaten it yet, and that he wanted to know if it was still good. Our personal shopper told the customer that he would get right back to him. He ran to Pike Place Fish Market here in Seattle, bought smoked salmon, shipped it off to the customer, and then sent an email telling him to throw the old stuff away!

Usability testing is a second great source of feedback. We'll ask 100 or 200 people to use our site and tell us what's working for them and what's not. Is the site too slow? Is a feature that we think might enhance the shopping experience actually making it more confusing? We incorporated lots of usability feedback when we relaunched our Web site this past June. It has an improved search engine and a new checkout feature, as well as a whole new look.

What's not new about marketing on the Web?

Brand matters. And being a great brand means keeping our promises to our customers. Nordstrom's reputation is built on putting the customer first and on the trust that comes with that commitment. Our customers have the same expectations when they shop at Nordstrom.com as they do when they shop in one of our physical stores -- that we will put them first and that they can trust us. If we promise that a product will get to a customer in five days, then it had better be there in five days. We're not investing to create a different brand online. We're investing to create a richer shopping experience, so that our customers can use our site to find the perfect black dress or the right pair of shoes, and so that they can do it quickly and conveniently.

Nordstrom.com's role is to provide a new way for Nordstrom shoppers to buy from the brand they know. We are here because sometimes it's more convenient to shop online than it is to go to the store. I think the biggest mistake that other bricks-and-mortar companies have made with the Web is that they have viewed the Internet as a competing channel, rather than as yet another way to put the customer first. We really believe that there is no channel conflict if you make sure to put customers' needs first.