Nordstrom SWOT and PESTLE Analysis

Strength

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Weakness

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Opportunity

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Threat

1. Intense Competition: Retail business is highly competitive. There is a wide range of local, regional, and national wholesalers and retailers both in the United States and in foreign countries which compete for employees, members, sites, products and services. So this may pose threat to Nordstrom Inc. This rivalry is bound to increase as the industry enters into the mode of consolidation and alliances. The offline retailing is dominated by Walmart while the online channel is mostly ruled by Amazon. As the customers’ preferences are changing a greater effort must be put in engaging them at online platforms.

2. Risks due to economic and external market factors: High energy and gasoline costs, inflation, levels of unemployment, consumer debt levels, healthcare costs, foreign currency exchange rates, reduced consumer confidence, unsettled financial markets, weaknesses in housing and real estate markets, changes related to government fiscal and tax policies, sovereign debt crisis, and other economic factors could adversely affect demand for products and services. In particular, the value of the assets could decrease and their operating costs could increase, due to changes in demographic trends, real estate market, site competition, and overall economic trends.

3. Foreign currency exchange risk: Operations in countries other than the U.S. such as Canada are conducted primarily in local currencies of those countries. So Future fluctuations in currency exchange rates over time that are unfavorable Nordstrom Inc. may adversely affect the financial performance of Canadian and Other International operating segments and have a corresponding adverse period-over-period effect on their results of operations.

Political

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Economic

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Social

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Technological

1. Evolution of digitized pop-up stores: The evolution of digital transformation has continued to engulf the retail industry, especially in areas related to customer experience. Technology has enabled stores to include smart trial and dressing rooms where customers can try on virtual outfits and create a personalized digital profiles. Thus future stores are evolving to be much different from what they are now where just customers will come and sample the products, scan the same in their wish list profile and purchase when they desire and get it home-delivered. In line with the trends, retailers such as Nordstrom are opening up more stores but significantly smaller locations.

2. Leveraging analytics for customer insights: Big data analytics is a major way by which retailers can improve both operational efficiency as well as customer experience. In the retail industry, data is something that is generated in enormous volumes through sources like inventory data and transaction logs and in store cameras. In store retailers can use this data very efficiently through the right methods to increase sales. While most retailers tend to avoid doing this because of the enormous costs associated with transmitting and storing the data, research has shown that the edge analytics used in big data can overcome these issues and optimize operations using the least amounts of investments that is easily offset by the huge benefits that it incurs. Nordstrom has effectively leveraged big data technology in areas such as marketing campaigns, personalized pricing and supply chain effectiveness. Apart from the website or the Point-of-Sales data, the retailer has generate lots of data from their social channels with 5 million plus likes on Facebook, 5 million plus followers on Pinterest and 750,000 plus followers on Twitter which it uses for insights improving customer experience.

Legal

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Environmental

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