Screen Shot 2014-07-23 at 4.16.51 pm

Nordstrom is one of the only departments stores that is actively investing in the start-up world (that we know of) – in fact it’s a limited partner in e-comm venture firm Forerunner Ventures (which has helped fund Dollar Shave Club and Birchbox) .This is a company showing a level of innovation and risk that we don’t normally see in this space.

They’ve been in the news this week with their negotiations to buy ‘Trunk Club’, a personal shopping service for men. Trunk Club is really smart, it works so that a customer consults with a stylist on their website/ app and are then sent a range of clothes based on this consult. The customers keeps/ pays for the items they want and then mails the rest back. Pretty interesting idea – particularly for the guys in this world who hate the thought of stepping in a shop.

So with this in the news, we thought it was worthwhile doing a brief review of some of the other digital start-ups that Nordstrom has acquired or invested in – to see where their bets are placed:


1. Bonobos: In 2012 they led the investment in this e-commerce menswear retailer. Bonobos has a real niche in the online space making pants for men that are made-to-measure. This is an e-comm start-up dedicated to service (a value that obviously marries with Nordstrom). To quote Jamie Nordstrom: “(Bonobos) are a pioneer in leveraging the Internet to build great relationships with their customers, a common focus of both organisations … Our investment will enable Nordstrom to participate in the young company’s phenomenal growth, and we look forward to what we can learn from each other as we build the business together.” Since taking a stake, Bonobos are now available on Nordstrom outlets and on their website; plus they are expanding to own stores.

Screen Shot 2014-07-23 at 3.51.15 pm

2. HauteLook: Hautelook is a members-only fashion flash-sales site which Nordstrom acquired in 2012. The site works such that brands place excess inventory on the site at massive discounts like 50-70% off. Hautelook now works in conjunction with their discount retail offer – Nordstrom Rack. In fact, when Nordstrom took Nordstrom Rack online it did so using Hautelook’s platform. So customers can browse Rack products through the Hautelook platform and app. They also use Hautelook’s database to cross-promote the Nordstrom brand…as you can see below. A very clever move.

Screen Shot 2014-07-23 at 3.48.40 pm

As with all investments in this area there is the chance of failure (which is not ideal…but always less riskier than doing nothing). So far Nordstrom have one to their name: Wantful. Wantful was a gift-giving service that closed at the end of 2013. At the time Nordstrom was only an investor, and their spokesman was quoted as saying ‘“We lived up to our obligation, and unfortunately the company didn’t meet the conditions we laid out to invest’… So evidently an investment that wasn’t a good cultural fit. 

That said, what Nordstrom is doing is evolving. Instead of seeing online as their competition they’re working out how to use this disruption to their advantage. To quote Abraham Lincoln or someone like that ‘I destroy my enemies when I make them my friends’…that is exactly what Nordstrom are doing.

Insert text here

Insert text here

Author Pippa Kulmar

More posts by Pippa Kulmar

Join the discussion 2 Comments

Leave a Reply