Nordstrom’s High Cost For Online Sales

by MR Magazine Staff

Nordstrom Inc. says it is struggling to control the high costs of competing for online sales. The Seattle-based retailer has gained market share by offering more-generous free shipping, in-store pickup for online orders and other services than many of its rivals. But the cost of boosting online sales has cut into profits, the company said last week when it reported full-year earnings. For the year ending in January, Nordstrom’s profits dropped 17% to $600 million, while expenses rose 10%. Nordstrom’s results underscore how retailers haven’t figured out how to replicate online the profits generated in brick-and-mortar stores. Many companies are investing in technology and their distribution networks to seamlessly get merchandise to customers whether they order online or in-store. Read more at The Wall Street Journal.