Given the events of the past few years, it’s not surprising that many retailers are struggling financially.
The pandemic dealt retailers a huge blow in 2020 when consumers were ordered to stay out of stores and limit themselves to online purchases. No sooner did that mandate go away than supply chains found themselves backlogged, forcing retailers to make unwanted inventory changes.
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Once that situation resolved itself, inflation began to surge. And while it’s cooled over the past year or two, living costs remain stubbornly elevated.
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That’s forced many consumers to change the way they spend their money.
These days, many people are cutting back on non-essential retail purchases to make room for things like groceries and utilities in their budgets. As a result, retailers’ bottom lines are shrinking. And now, many are changing their strategies to stay afloat.
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Retailers have to remain agile
Given that consumers are being choosier with their money these days and are showing less of a willingness to spend, retailers have been forced to make tough choices to avoid financial distress.
For some retailers, that’s meant closing underperforming stores. A number of major retailers, including Macy’s and Kohl’s, have moved forward with plans to shutter locations with waning foot traffic.
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Other retailers have turned to bankruptcy to restructure their debt and enjoy some financial relief. But bankruptcy isn’t always a path to remaining operational.
A good number of popular retail chains ended up winding down operations on the heels of their bankruptcy filings. Party City is one notable example. The company put its intellectual property up for sale, and its leases were made available to bidders following its recent Chapter 11.
Another way retailers can cope with changing consumer habits is rethinking their marketing and promotional strategies. That could mean adding perks to draw in customers, or taking perks away when they’re deemed too costly or ineffective.
Popular department store makes big change to loyalty program
Nordstrom has long been a popular shopping destination. Fans of the store tend to love its wide array of apparel, footwear, and beauty products.
But now, Nordstrom is making a major change to its Nordy Club loyalty program to offer Nordstrom Rack customers new benefits.
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Beginning June 3, customers will no longer be able to rack up loyalty points on purchases made at Nordstrom Rack stores.
However, the news isn’t all bad.
Instead, customers will be eligible for a 5% discount at Nordstrom Rack, as well as its website and app, when they use their Nordstrom credit card on eligible purchases. Other payment methods, however, will not accrue reward points.
“We are excited to evolve The Nordy Club and introduce exclusive benefits to Nordstrom Rack customers, delivering great brands at great prices with even more perks each time they shop with us,” said Deniz Anders, Nordstrom’s executive vice president and chief marketing officer. “The new benefits offer our Nordstrom Rack customers more value, providing instant discounts, special promotions, and early access to new arrivals.”
Nordstrom has been focusing its efforts on opening more Rack locations, with 23 new stores popping up in 2024. The company has plans to introduce another 21 Rack locations this year as well.
Nordy Club members will also have access to discount codes and seasonal offers, and be eligible to receive alerts when brands roll out in Nordstrom Rack stores.
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Nordstrom also isn’t the only retailer to make changes to its loyalty program lately. Ulta Beauty tweaked its loyalty program name and refreshed its look last year, while Foot Locker made changes to its rewards program in an effort to drum up sales.
Nordstrom is hopeful customers will be happy with its new program changes. Though some customers may not be thrilled with the loss of loyalty points on Rack purchases, all told, this change should offer more value to Nordstrom Rack customers at the point of sale and amount to greater savings for customers overall.
