What CIOs can Learn From Nordstrom’s Digital Transformation

Dateline: June 19, 2015

Welcome to our Friday WRAP – one thought-provoking idea to think about over the weekend.

Retail giant Nordstrom’s has undergoing a digital transformation.  Researchers Jeanne Ross, Cynthia Beath and Ina Sebastian from the MIT Center for Information Systems Research (CISR) published an article in the Harvard Business Review titled, Why Nordstrom’s Digital Strategy Works (and Yours Probably Doesn’t). To begin, Nordstrom’s has a clear raison d’être,

For nearly 100 years, Nordstrom’s purpose has been to provide a fabulous customer experience by empowering customers and the employees who serve them. To fulfill this purpose, as far back as the late 1990s, Nordstrom started looking for opportunities to invest in technologies that would further empower their famously empowered employees.

Nordstrom’s management invested carefully in areas that had direct impact on the customer experience first.  Consequently, their digital transformation has been very successful.

The persistent digitization of Nordstrom’s business has allowed the company to grow revenues by more than 50% in the last five years. The company is growing sales in both full-price and off-price businesses through both online and traditional channels.

Nordstrom’s digital capabilities make complete sense for Nordstrom. What makes them important is that they are tightly integrated with all the parts of the business that ultimately serve the customer. This is not a matter of having the best apps, analytics, or social media tools. Instead, it’s a matter of tending to the details of building integrated digital capabilities, one at a time, making the right data accessible, and simplifying processes. Most retailers will struggle to do this because they haven’t architected their product or customer data for easy access by the new digital capabilities. Without those core capabilities, integration with and among new digital capabilities is virtually impossible.

Has your organization tended to the details of building integrated digital capabilities that make sense for your business?

That’s a WRAP!  Have a fantastic weekend!


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