POLITICS VS. BIG BUSINESS NORDSTROM

Politics vs. Big Business:
Did the 2017 Presidency affect retail lines in Nordstrom

 

Abstract

February 2, 2017, Nordstrom collectively sought to discontinue Ivanka Trumps line from all their stores. In retaliation, President Donald Trump tweeted out to the American people that he was upset by the decision made by the Nordstrom company. All of Trumps supports then took to tweeter to complain about the company on how this was a political stand against the Trump Administration. Nordstrom responded on tweeter stating that it was because the line of apparel wasn’t being profitable enough to keep in the store.

 

Company Background:

Nordstrom, Inc. was established in 1901 by a man named John W. Nordstrom. The businesses started out as a shoe store in Seattle, Washington. From those origins, the family-run enterprise expanded into a 180-outlet, 27-state chain, which tallied $6.49 billion in sales in 2003. In addition to more than 90 flagship Nordstrom department stores, the company also operates about 50 Nordstrom Rack outlet stores in the United States and around 35 fashionable boutiques, most of which are in Europe. Catalog and Internet sales are generated through the Nordstrom Direct unit. Carefully supervised expansion, tight family management, wide selection, and attentive customer service have long been the hallmarks of Seattle-based Nordstrom, one of the largest independent fashion specialty retailers in the United States. (History of Nordstrom, Inc., n.d.) By 1980, Nordstrom was the third largest specialty retailer in the country, ranking behind only Saks Fifth Avenue and Lord & Taylor. That year, the firm operated 31 stores in California, Washington, Oregon, Utah, Montana, and Alaska. In 1980, a new expansion plan called for 25 new stores to be added in the 1980s, and the Nordstrom’s projected that both earnings and total square footage would double by 1985. (History of Nordstrom, Inc., n.d.)

In the 1980s the firm’s customer service became legendary, as tales of heroic efforts by salespeople became legion: clerks were known to pay shoppers’ parking tickets, rush deliveries to offices, unquestioningly accept returns, lend cash to strapped customers, and to send tailors to customers’ homes. Salespeople received constant pep talks from management, and motivational exercises were a routine part of life at Nordstrom. Nordstrom also created an extremely customer-friendly environment. Many stores had free coat check service, concierges, and piano players who serenaded shoppers. (History of Nordstrom, Inc., n.d.). Nordstrom enjoyed its most profitable year ever in 2003: $242.8 million in net income on record revenues of $6.49 billion. Same-store sales rose 4.3 percent, Nordstrom’s best performance in ten years. Nordstrom hoped to maintain this forward momentum by continuing to roll out its technology initiatives, keeping a tight rein on expenses, and eschewing large investments in new real estate–only 11 new stores were slated for opening from 2004 through 2008–in favor of sprucing up existing stores and maximizing sales per square foot. The latter was already on the rise, increasing from $319 a square foot in 2002 to $327 in 2003. (History of Nordstrom, Inc., n.d.)

Nordstrom’s Values, Vision, and Mission

Some companies mission, vision, and value statements focus all on one thing; trying to beat out the competition. However, Nordstrom, Inc. takes pride in their mission, vision, and values by making it all about the customers and supporting the employees that deliver service to the customers.

Mission:

In our store or online, wherever new opportunities arise- Nordstrom works relentlessly to give customers the most compelling shopping experience possible. The one constant? John W. Nordstrom’s founding philosophy: offer the customer the best possible service, selection, quality and value.”

 

Vision:

Our goals are simple: to serve our customers better, to always be relevant in their lives and to form lifelong relationships.  And while serving our customer face-to-face is the foundation and hallmark of how we’ve historically served them, today customers seek our service in new ways. Speed, connivance, innovation, and personalization have become cornerstones of the customer experience. Guided by these new needs, we continue to invest in the cross-channel experience, combining the accessibility of a pure online experience with the high-touch inclusivity of our stores.”

 

 

Corporate Reputation/Character

Nordstrom, Inc. is a retail company that combines two different target segments into its one business. Nordstrom stores focus on selling high-end luxury apparel to high-end luxury shoppers and on the other hand, Nordstrom serves more modest shoppers with its discount store Nordstrom Rack. With the split between luxury and modest, Nordstrom cultivates its reputation on the quality of its apparel and how the customers are treated. (Caplinger, 2013) Nordstrom not only connects with its customers, but also with entire communities drawing employees, investors, shoppers, residents (local), and shareholders together in a way that benefits all parties. For its employees, the retailer offers pay and benefits that are unparalleled in the industry. In 2011, Nordstrom’s average worker earned more than $19 per hour, nearly 60% higher than the industry average. Moreover, with health insurance, 401(k), disability and life insurance, and opportunities for an unpaid annual sabbatical, Nordstrom builds employee loyalty, with 75% of employees rating it favorably on Glassdoor. (Caplinger, 2013) For customers, Nordstrom’s biggest appeal comes from the high-quality design of its products and the perception of that quality that the company creates in its brands. The company has also done a good job of building a sense of community among shoppers, creating a network effect that drives repeat sales. Shareholders can’t complain about the results. The company has put up terrific returns of more than 21% annually over the past decade. (Caplinger, 2013)

 

Nordstrom also donates time and money to different charities as well as give back to the community. Some of those programs are; Gift Cards that Give, Employee Charitable Match, Shoes that Fit, Treasure&Bonds, M.A.C Viva Glam, and more. They also participate in human rights as well as environmental practices and community support. Nordstrom is all around a retail store that cares about its customers, community, and environment and belongs as one of the best companies in America. (Nordstrom & Nonprofits: How We Give Back, n.d.)

Situation Analysis:

“Nordstrom, Inc. is a leading fashion specialty retailer offering compelling clothing, shoes and accessories for men, women and children. Nordstrom has been committed to providing our customers with the best possible service and to improving it every day”. (About Nordstrom, n.d.) Nordstrom is a business of optimism and it is continuing to grow and evolve to make changes that are going to better the business and customer service, with having ambitious standards any publicity that comes from something of this magnitude is important to be correct and for the right answers to be shared and all the correct information throughout the process.

 

Nordstrom has not had issues with controversy on any social media platforms. (Kapner, 2017) Nordstrom is very attentive when it comes to answering questions throughout social media, especially on Twitter. (Wahba, 2017) Nordstrom takes the time to answer questions and relay any information that they have back to the customers or directs them in the necessary way to make sure that they are able to get the correct information.

 Precedence and Implications

Nordstrom has a high reputation for free shipping and free returns with the convenience of mobile shopping and the extending offer throughout the partners that you can purchase through Nordstrom. (About Nordstrom, n.d.) The implications of the social media meltdown that happened with President Trump’s one substantial tweet changed what is thought about the company. There was no legal action that was taken between either party, it was all about the social media backlash that happened between Nordstrom and Trump. Sides were taken and Nordstrom gained new customers and lost some depending on their stand of the Presidential election. The commitment that Nordstrom has taken to be a top leading company has expanded across the country and through to Canada to show that they are a top leading company across North America. Nordstrom is committed to high excellence and great customer service. These implications that the Ivanka Trump brand was dropped because of political background is not something that Nordstrom wanted to happen their reputation is built on great customer service and sales without that they are nothing.(Nordstrom Inc. PR – News Releases, n.d.) Nordstrom has provided that they can handle the customer backlash gracefully along with the political side that had no intention of bringing the fashion industry and politics together.

Timeline of Events:

  • February 2, 2017 – Nordstrom announced that Ivanka Trump’s fashion line will not be available at Nordstrom this upcoming season.
  • February 3, 2017 – Nordstrom responds to Twitter questions stating the decline in sales is the reason for Trump’s fashion line to be dropped.
  • February 8, 2017 – President Trump attacks Nordstrom on Twitter for dropping Ivanka Trump’s fashion line.
  • February 9, 2017 – Consumers who supported Trump’s line were unhappy and made comments on Twitter and a lot of questions arose that Nordstrom had to respond to.
  • February 9, 2017 – #GrabYourWallet Campaign continued well against Trump’s line due to politics and being related to the president.
  • February 10, 2017 – Became a larger political issue with the #GrabYourWallet Campaign which is boycotting any retailer that sells Ivanka Trump’s brand.

 

Descriptive Timeline

Nordstrom announced to Ivanka Trump at the end of January that they were no longer going to sell her clothing line in stores, this is coming after an order of the Ivanka Trump line was already placed. Nordstrom decided to cancel the order due to the sales of the line as a whole. (Martha Ross, 2017) On February 9th Nordstrom announced publicly that they would no longer be carrying Trump’s brand due to lack of sales. Nordstrom has been under a lot of fire due to the #GrabYourWallet campaign, which is a critic of the Trump administration and is asking shoppers to boycott retails that carry Ivanka Trump or Donald Trump Goods. (services, 2017) When Nordstrom announced that they were no longer going to carry the brand it became an issue politically because Trump tweeted that “My daughter Ivanka has been treated so unfairly by @Nordstrom. She is a great person — always pushing me to do the right thing! Terrible!” (Wolfers, 2017)

 

This statement ignited the political world of retail and brought the two hand in hand. After Nordstrom released their statement about dropping Ivanka’s line it brought out the responsive side of Twitter since President Trump had tweeted about the event which led to a social media frenzy. Nordstrom began responding to all the questions that were asked through the social media platforms. Twitter was the most used social media platform that everyone was asking questions on. Nordstrom did their best to respond politically correct with responses without infuriating anymore customers. (O’Hara, 2017) President Trump “attacked” Nordstrom on twitter through one tweet, but because he is the President that tweet started a political situation between Nordstrom and Trump Administration. Supports of President Trump and the Trump administration in general became unhappy that Nordstrom was dropping the line and were boycotting shopping there because they were no longer in favor for Nordstrom because the fashion line was being removed. (Martha Ross, 2017) The #GrabYourWallet campaign started before Nordstrom announced that Trump’s line was being removed but ignited once again through social media once it was found out that Nordstrom was releasing the line everyone in the #GrabYourWallet campaign was for shopping at Nordstrom again because they were no longer going to carry anything that was related to the Trump administration.(David A. Fahrenthold & Sarah Halzack, 2017) Social media has a big involvement of why Ivanka Trumps clothing line became a political issue, one tweet from President Trump changed what people saw about Nordstrom and brought them into the political spotlight.

 

Organization’s Response:

Public Response

All eyes have been on Trump since his decision to run for office was announced. Winning the 2016 election, he is held to a higher standard as a presidential and leader figure. After tweeting Nordstrom, the public lashed out on Donald. Some thought that he was using his power in office to aid his families businesses. One user even said that this was a good enough reason to impeach him. People thought it was childish for the president of the US to tweet this. Trump supporters defended him by saying that he was only standing up for his daughter. Some users ridiculed the tweet and said they subscribed to NY times and spent more money with Nordstrom because “they knew that would make trump upset.” One possible reason Nordstrom dropped Ivanka trumps clothing line is due to a nationwide Trump boycott. Upon releasing his statements discriminating towards minorities, Trumps minority partners began boycotting him as well.

 

Social Media Response

The decision of Nordstrom to Drop Ivanka Trumps clothing line was “based on sales” according to Nordstrom. The topic was not yet controversial until Trump Tweeted “My Daughter Ivanka has been treated unfairly by @Nordstrom she is a great person. Always pushing me to do the right thing! Terrible!” The president used his personal and presidential twitter account to attack Nordstrom. The platform that this occurred on was twitter, which is also the Presidents preferable choice of communication. The announcement was done through social media to publicly release the statement targeted at Nordstrom, in hopes to affect the company. In the past Trump has attacked car manufactures and journalists. In most of These cases stock prices for the companies dropped. Nordstrom’s stock however, only dropped for 4 minutes then increased 4.4% shortly after. So, Can Trumps Tweets Move markets? In another Tweet, a few months later Trump tweeted a photo of him hosting and thanking the CEO of Intel, Brian Krzanich, at the white house. Viewing Intel’s stock from the previous days, the stock only increased by .09% barley moving the charts. Trumps idea may have backfired. Twitter members lashed out at his tweet. One member said, “surely @Donald Trump using office to make money for his family is an ethics violation!”

 

News Media Response

Nordstrom is a reputable retailer that has lasted for over a century. Nordstrom’s theme, in a way has not changed, they simply focus on the customer. Another thing Nordstrom does well is staying up to date with the public. In recent news Nordstrom was on the list of top 10 retailers to boycott. This boycott was done to stop people from buying products from Trump and his family, products Nordstrom carried at the time. The company knowing carrying the brand would be harmful to its reputation so Nordstrom distanced its self from the politics. The retailer made the right choice because later stocks increased.

 

New Policies Developed:

Nordstrom has not released any new policies after this incident, but continues to have one of the top customer services among other businesses. They are paving the way to easier shopping conditions for customers by having multiple different options for online shopping. They continue to have free shipping and free returns while having the option to order something online and then pick it up in the store. Nordstrom finds their customers opinions and needs to be very important.

Business Performance:

For Nordstrom, focusing on customer service is one of their top marketing strategies. From the store to their website and mobile app, Nordstrom keeps their customers’ needs and opinions close. Nordstrom is a company known for making their customers lives easier. When the news about Ivanka Trump’s brand being dropped, there were many different opinions from Nordstrom customers.

 

By Nordstrom dropping Ivanka Trumps brand, politics came into play very quickly. Only after six days from the announcement, President Donald Trump took to twitter to voice his opinion about the issue. With the #GrabYourWallet campaign, shoppers were refusing to shop at any store that carried Ivanka Trump’s brand just because she is connected to the president. After seeing this, Trump supporters wanted to put on a counter-protest of the retailer. The retailer realized that no matter what they do, they have a chance of losing some business. A Nordstrom spokesperson stated that, “We made the decision based on performance. Over the past year, and particularly in the last half of 2016, sales of the brand have steadily declined to the point where it didn’t make good business sense for us to continue with the line for now.” (NBC News).

 

Financial Impact

Lucky enough for Nordstrom, their financial impact was not affected in a bad way. Even though Donald Trump’s tweet impacted the company’s shares right after the tweet was sent, the shares went back up later that day. The company posted that their shares went up by more than three percent after the market closed. The revenue grew to 2.4 percent to a $4.32 billion fourth quarter. Although Nordstrom wanted a higher percentage and revenue, they still increased from last years numbers.

 

Reputation Impact

With the supporters of the #GrabYourWallet campaign and the supporters of the Trump family protesting against the company, Nordstrom knew they were going to upset and offend some customers during this time. Danielle LaPaglia, a Nordstrom shopper, told ABC 33/40, If I like something, I’m going to buy it. I just feel like it’s very political and I feel like stores should stay out of politics and just leave it to their customers.” Many other customers agree with this statement and think that it’s wrong to drop Ivanka’s fashion brand. Although Nordstrom disappointed many customers during this incident, their revenue for the year did increase. While some shoppers didn’t mind the name “Trump” on a product, others didn’t hold back on saying that they would overlook the product if it was from Ivanka’s line. Even though Nordstrom stated that their decision was not political, some people think fashion has gotten very political over this past year.

Page Principles

Nordstrom was upfront and honest about informing Ivanka Trump and her team know that they were discontinuing the line for the upcoming spring collection, but they decided this after items were already placed for a purchase order for the spring collection. Nordstrom then decided a brief time after that they were no longer going to move forward with the purchases for the spring collection due to lack of sales from last season. Nordstrom should have had all the information to move forward with a decision on Trump’s line well before the deadline and having to undo what Nordstrom had already ordered.

Nordstrom provided answers to all the incidents that happen over social media when President Trump made his statement about the company. This enlisted a lot of backlash which Nordstrom handled well. Nordstrom brought forward more data on why Ivanka Trump’s line was being removed from the collection to back up their statements and decisions on removing the line from stores.

After the altercation on social media, mainly Twitter, Nordstrom pushed that Trump’s line will be in stores until sell out and Nordstrom has done the best they can to satisfy customers, staying true to their mission statement that “offering customers the very best service, selection, quality and value would bring success” (About Nordstrom, n.d.) Nordstrom has embraced their mission and will continue to provide exceptional service throughout all platforms including social media while improving on how statements come through to the media and reaching the public for a better and honest look on the company.

Looking Ahead

The future of politics and fashion does not look like it will stay intertwined because the Trump administration was “attacked” by Nordstrom not continuing to sell Ivanka’s line is the only reason President Trump tweeted about the whole situation. It is his daughter’s fashion line and when something doesn’t go the way as planned it was upsetting and he made a statement through social media because he is the President that is what turned this into a political campaign between politics and the fashion industry. The #GrabYourWallet campaign was started when President Trump took office and will fade on its own over time, there is frustration throughout every presidential election and that shouldn’t be brought to the retail or fashion industry when the only component that is in common between the two is that Ivanka Trump, President Trump’s daughter, was running her own fashion line. For this is not what the future of the fashion industry is going to be known for.

 

References

About Nordstrom. (n.d.). Retrieved April 25, 2017, from http://shop.nordstrom.com/c/about-us

 

Caplinger, Dan. “What Makes Nordstrom One of America’s Best Companies.” The Motley Fool. The Motley Fool, 27 Feb. 2013. Web. 09 May 2017. <https://www.fool.com/investing/general/2013/02/27/what-makes-nordstrom-one-of-americas-best-companie.aspx>.

 

David A. Fahrenthold, & Sarah Halzack. (2017). Nordstrom drops Ivanka Trump product line. Washington Post, The.

 

Gustafson, Krystina. (2017, February 23). Trump’s tweet had a ‘negligible’ impact on

Nordstrom’s sales. Cnbc.com.

 

Kapner, S. (2017, February 9). White House Adviser Kellyanne Conway Urges Public to Buy Ivanka Trump’s Branded Products; Remarks raise question whether she violated ethics rules. Wall Street Journal (Online); New York, N.Y., p. n/a. New York, N.Y., United States.

 

Kapner, S., & Germano, S. (2017, February 10). Retailers Are Caught in Political Fights Over Trump; Social-media groups fuel protests as divided nation endorses some brands and boycotts others. Wall Street Journal (Online); New York, N.Y., p. n/a. New York, N.Y., United States.

 

Martha Ross. (2017, February 3). Ivanka Trump gets dumped by Nordstrom: Bay Area-led boycott scores victory. The Mercury News (California). Retrieved from http://proxy.ulib.csuohio.edu:2056/lnacui2api/api/version1/getDocCui?lni=5MW6-16F1-JCX4-3459&csi=270944,270077,11059,8411&hl=t&hv=t&hnsd=f&hns=t&hgn=t&oc=00240&perma=true

 

Nordstrom Inc. PR – News Releases. (n.d.). Retrieved April 25, 2017, from https://press.nordstrom.com/mobile.view?c=211996&v=100&d=1

 

Nordstrom, Inc.” History of Nordstrom, Inc. – FundingUniverse. FundingUniverse, n.d. Web. 09 May 2017. <http://www.fundinguniverse.com/company-histories/nordstrom-inc-history/>.

 

Nordstrom’s nixing of Ivanka Trump brand backed by sales data, reports WSJ. (2017, February 13). Retrieved April 25, 2017, from http://www.seattletimes.com/business/retail/nordstroms-nixing-of-ivanka-trump-brand-backed-by-sales-data-reports-wsj/

 

“Nordstrom & Nonprofits: How We Give Back.” Nordstrom. N.p., n.d. Web. 09 May 2017. <http://shop.nordstrom.com/c/nordstrom-cares-non-profit-support>.

 

O’Hara, M. E. (2017, February 3). Nordstrom drops Ivanka Trump line, citing poor “performance.” Retrieved April 25, 2017, from http://www.nbcnews.com/news/us-news/nordstrom-drops-ivanka-trump-line-citing-poor-performance-n716361

 

 

Painter, R. W. (2017, February 9). The Lesson of Nordstrom: do business with the Trumps or Else. Retrieved April 25, 2017, from http://proxy.ulib.csuohio.edu:2220/nytimes/docview/1866343854/abstract/7AC794E580824F48PQ/2

 

Popken, Ben. (2017, February 9). Nordstrom Says It Told Ivanka Trump Last Month It Would

Stop Carrying Her Line. Nbcnews.com.

 

Services, S. T. news. (2017, February 2). Nordstrom won’t sell this season’s Ivanka Trump merchandise. Retrieved April 25, 2017, from http://www.seattletimes.com/business/nordstrom-reportedly-winding-down-relationship-with-ivanka-trump-brand/

 

Sarlin, Benjy. (2017, February 10). Donald Trump’s Feud With Nordstrom Sparks Warnings

From Ethics Experts. Nbcnews.com.

 

Tu, Janet. I. (2017, February 8). Nordstrom stock climbs despite tweet attack from Trump over Ivanka fashions. TheSeattleTimes.com

 

Wahba, P. (2017, February 2). Nordstrom Is Officially Dropping the Ivanka Trump Brand. Retrieved April 25, 2017, from http://fortune.com/2017/02/02/nordstrom-ivanka-trump/?iid=sr-link2

 

Walsh, Lauren. (2017, February 8). Alabama Shoppers Respond to Nordstrom’s Decision Not to

Buy Ivanka Trump This Season. Abc3340.com.

 

Wolfers, J. (2017, February 9). Ivanka Trump, Nordstrom and an Ill-Fitting Approach to the U.S. Economy. Retrieved April 25, 2017, from http://proxy.ulib.csuohio.edu:2220/nytimes/docview/1866351645/abstract/1947507102B84F2DPQ/2

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