Introduction to E-Business

Final Project
Implementing a New Technology

Ali Mouttaki
(202531077)
Ricardo Vzquez

November 24, 2016

Table of Contents
About the Business.......................................................................4

Technology Description.................................................................6

Challenges................................................................................... 7

Added Value................................................................................. 8

Conclusion.................................................................................. 10

Bibliography............................................................................... 11

About the Business

Nordstrom, Inc. is a leading fashion specialty retailer offering compelling clothing,
shoes and accessories for men, women and children. Since 1901, they've been
committed to providing their customers with the best possible service and to improving
it every day.
This commitment has taken Nordstrom from a small Seattle shoe shop to the
leading fashion specialty retailer they are today. They're proud to serve customers at
347 stores in 40 states and Canada. Customers are served at 123 full-line stores in the
U.S. and Canada, 215 Nordstrom Rack locations, five Trunk Club clubhouses (a
personalized styling service), two Jeffrey boutiques and two clearance stores. They also
serve

customers

online

in

96

countries

through

Nordstrom.com.

And

their

nordstromrack.com site, which operates in partnership with their private sale site
HauteLook, gives customers in the U.S., Canada and Australia access to off-price fashion
at considerable savings.
They believe fashion is a business of optimism, and in that spirit they continue to
grow and evolve. Free shipping and free returns, mobile shopping and exciting new
retail partnerships offer them continued opportunities to serve more customers in more
ways with a fresh, relevant shopping experience and inspiring style. Fashion changes.
Shopping changes. But their commitment to happy customers doesn't.
Although officially labeled a "goal," it is clear to anyone who is familiar with
Nordstrom Department Stores that this is also the Nordstrom mission:
"At Nordstrom, our goal is to provide outstanding service every day, one customer at a
time."
Further focus is provided to Nordstrom employees at all levels with this
Nordstrom goal, which is also a management mission:
"We Work hard to make decisions in the best interest of our customers and those
serving them."
Nordstrom provides further guidance to its employees about how to achieve the
Nordstrom mission in a practical way every day with a clear description of the
Nordstrom culture and the following Nordstrom values:

We're family: We continue to cherish our shared experiences, celebrate our

achievements and appreciate one another just like family.
Use good judgment: We trust each others integrity and ability.
Be empowered: We want you to take the initiative, and we'll support your efforts
to deliver exceptional service.
Setting goals matters: At Nordstrom, you can determine your own success and
make a real difference by accomplishing the goals you set.
It's your business: Our employees have a personal, financial and professional
stake in the success of our company.
Healthy competition is good: We love to win.
Be honest: We value open, honest and respectful communication.
Be recognized: We value people who drive results, and we regularly recognize
outstanding performance whether you're serving customers or supporting those who
do.
Be a good neighbor: Our Company and our employees support hundreds of
community organizations through contributions, outreach programs, special events and
volunteering their time.
Be kind: We work hard to offer great service to each and every customer and we
believe great service begins with showing courtesy to everyone, customers and
coworkers alike.
Have fun: If you're passionate about fashion, this is the place for you.
Our door is always open: It's important to us that every person who works here
feels valued, welcome and cared for."
Nordstroms Strategy
Service with a smile is a part of Nordstrom's corporate culture. With its easyreturn policy and touches such as thank-you notes from employees, Nordstrom has
earned a reputation for top-notch customer service. Nordstrom family members, who
own about 25% of the retailer's stock, closely supervise the chain.

Nature of the Industry and of the Competition

The key to establishing market focus and position in the Fashion & Apparel
industry is to become a top-of-mind destination. Being a leader in this category hinges
on targeting specific market segments, learning everything you can about them, and
making them believe that only your products and services can confirm their sense of
self-worth. Customers also expect personalization and want a one-on-one relationship
with the Retail brand.
Nordstroms main competitors are:

Bloomingdale's
Neiman Marcus
Saks Fifth Avenue

Technology Description
The new technology implemented by Nordstrom is called the mobile point-ofsale device. This device works using the point-of sale system. This system incorporated
in this device allows the customer to check out of the store (pay for his purchases),
anywhere in the store, along with other features that internally benefit the business.
The point-of-sale (POS) system is defined as A computerized network operated by a
main computer and linked to several checkout terminals (Entrepreneur). Other features
included in the system are: inventory calculations and analysis, up-to-date sales
records, inventory information, Information about sales, accounting module and finally
gathering and reporting of the information collected by the features
Inventory calculations and analysis is made with the information provided.
Inventory calculations are up-to-date to keep track of the sales flow; this records all
sales. This function allows the business owner to keep track of his inventory, what got
sold, how many items are left in the inventory, and when to reorder. With the
information provided by the feature of inventory calculation the system can analyze
inventory levels on an item-by-item basis (Entrepreneur). As briefly introduced
previously, the system records up-to-date sales. This allows the owner to analyze the
sales of the business like; what product sells better and what doesnt? The system in the
device the sales representatives carry around with them includes item-to-item inventory
information. This an accommodation that makes the job easier and the information

provided to the customer about the product is more accurate. Extra information about
sales is provided by the system. How long did it take the client to finalize his purchase?
How many items did they abandon? Etc. These are some of the question the system
may help he owner answer. One feature that has proven itself helpful, less paper work,
and less time consuming, is the accounting module. The accounting module includes
general ledgers, accounts receivable, and account payable. Finally, the POS system
gathers and reports all these types of information collected to help the business owner
make decisions.
According to Entrepreneur.com;
With a POS System:
-

You can analyze sales data; figure out how well all the items on

your shelf sell.

You can maintain a sales history to help adjust your buying

decisions for seasonal purchasing trends.

You can improve pricing accuracy by integrating bar-code
scanners and credit card authorization ability with POS System.

Nordstrom has also implemented other technologies along the years.

According to Colin Johnson, spokesperson for Nordstrom, in the article published
by Forbes. In 2005, Nordstrom offered overseas delivery (shipping) directly to the
customers. As the years go by and the technology develops, in 2009 Nordstrom
integrated an online retail shop. With this addition to their business Nordstrom
had global reach. In 2010, the business launched free Wi-Fi for the customers for
them to stay connected with all the stores, compare, and learn more about the
product.

Challenges
Financial Challenges
1. The creation and implementation of the mobile point of sale (POS) devices, which
is a modified iPod Touch with a merchandise scanner and credit card slider.
Nordstrom has deployed over 6,000 of these devices throughout their 117 fullline stores

At some Nordstrom locations, there are more mobile POS devices than

regular registers.
2. The creation of the app on the device that provides Nordstroms sales staff
access to the companys entire inventory
3. They need to recruit more employees to use the POS system.
4. They need to recruit engineers to program the POS systems and make sure they
work correctly.
5. The training to the employees enrolled with the mobile POS system is now more
expensive.
Technical Challenges
1. Nordstrom had to train employees on every store in the use of the mobile Point of
sale (POS) in order to take advantage of it.
2. The company had to integrate the inventory with its online store due to the fast
mobilization of the inventory caused by the POS.
3. Nordstrom had to introduce Wi-Fi in each of the stores because the app also
4.

allows customers to shop and learn more about merchandise.

The mobile POS system cannot be used to pay with cash. This is an unsolved

challenge.
5. The ability to read chip cards, the more secure EMV cards (named after payment
technology specification developers Europay, MasterCard and Visa).
6. The ability to support local languages and currencies.
7. When opening stores in other countries, they faced other issues that differ from
country to country like receipt formats, tax buckets, credit limits, card types, and
methods of fraud detection.
8. Developing connections to local acquirers is also no easy task. Going through the
integration, testing and certification process in each country can be a costly and
time consuming endeavor. And yet its a process that cant be bypassed because
without connections to local acquirers, merchants wont be able to process
payments.
Cultural Challenges
1. At first, the clients were not familiarized with this new technology, so they did not
use it.
2. Nordstrom had to teach their target market how to appropriately use the
application by using advertising. So they took advantage of this challenge.

Added Value
Recognizing the powerful potential of mobile POS early on, Nordstrom has lead
the industry in adopting mobile POS as complement to more traditional cash registers
(Odyssey Computing). Theyre ability to adapt quickly and benefit has been proven
successful a year after the technology was implemented. In 2012, sales increased
15.3% in the first Quarter compared to the same period in 2011, the previous year.
Additionally, according to the 2011 Nordstrom Annual Report, both the average selling
price and the number of items sold increased in 2011 compared with 2010 (Forbes). In
the following year sales took off and in 2015, the company achieved an all-time record
for total net sales at $14.1 billion (shop.nordstorm). With the business thriving, the
company has plans to the business and open other stores around the states and
Canada. Nordstroms first Canadian store was opened in Calgary in 2014. The following
year, 2015, they opened two more stores in Canada, in Ottawa and Vancouver. In
Toronto, the company plots to open 3 more chain stores in the years 2016 and 2017.
John W. Nordstroms philosophy; Offer the customer the best possible service,
selection, quality and value (shop.nordstrom). The mobile POS helped drastically the
company to keep John W. Nordstrom philosophy alive. Nordstroms employees are
equipped with a configured iPod touch device with an attached credit card reader. This
Feature allow the employee to check the customer out anywhere in the store, no need
for a cash register. This is an advantage for both the business and the customer. On the
customers side, the long minutes waiting in line for their turn to check out are
decreased. Customers paying with the card can check out at any place in the store with
the sales associate that served them, no waiting period. The customer can then sign for
the purchase after paying by card, and enter their email for a paperless receipt.
Nordstroms customers according to Forbes, using the POS device for checking out is
an incredibly intuitive and almost shockingly simple experience.
paying in cash, the waiting line is decreased almost not there.

For customers

Some devices today

have developed cash drawers attached to the device or portable with a cable
connection. On the other hand, it benefits the business in the following. The long
waiting lines for checking out from a cash register offers the customers time to think
about the purchase before paying. It gives time to the customer to analyze the purchase
cost and its necessity leading the customer to doubt the necessity of certain products
they took and discard certain items. Some big waiting lines, long minutes waiting to
pay, lead the customer to abandon all products and not making a purchase. The mobile

POS device decreases the rate of abandonment and raises the rates of sale. According
to the Odyssey computing report, since implementing their mobile POS system, both
the average of purchase price and number of items sold in stores have increased
pointedly. Colin Johnson, based on the Forbes report, concludes by explaining that the
new mobile POS at Nordstrom is designed to provide a faster and more convenient
experience for customers and reduce the time it takes for customers to check out, he
adds that anything that can help that is beneficial.
Nordstrom adapted the POS system mainly for the checkout of the customer but
ended up with additional features that benefit the business internally. Inventory
management was integrated by Nordstrom in its devices. One of the benefits of this
feature is that it allows the sales associates to check and order for alternative sizes and
colors in the inventory while still engaging with the client. This benefits also the client
as it decreases the time of response and insures the accuracy of the information
provided to them. The accuracy is insured ass all the right information about the
product are displayed on the sales associates POS device. Inventory management also
allows the sales associate to access inventories of other stores if ever they run out of an
item, the associate can then order the item to be delivered or shipped directly to the
customers domicile. This adds great value as the business owner typically is never out
of stock. The payment for the delivered purchase is made when the item is ordered and
the client instantly receives an email receipt. The device also benefits the business as it
enables the processing of more customer purchases at once. Finally, the POS device is
cheaper than and ordinary regular cash register and also easy to implement and use.

Conclusion
Nordstrom implementing the POS device has proven to be very successful. Sales
taking off by 15% only a year after the start of using POS devices and customers state
to be perfectly satisfied. To conclude this paper a quote by Colin Johnson the Nordstrom
spokesperson clearly explains the goal of using the mobile POS for Nordstrom. take
care of customer anywhere in the store. We dont have to take you to the cash register,
and instead, can do that right there with you on dressing room or when youre trying on
shoes and then youre on your way. He adds, that kind of ability to increase speed
and convenience is increasingly important. (Forbes). Although the technology has
proven itself helpful, the company already had a strong reputation for it excellent

customer service. This technology greatly satisfies and benefits the customer but it
really benefits the business as their sales increase drastically. Now a day at some of the
Nordstrom stores there are more POS devices than regular cash registers. The odyssey
computing website concludes its report by stating, It is no question that stores that
begin to adopt a more mobile-centric strategy in general will see big success in todays
mobile-centric world.

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Bibliography

About Us. Nordstrom. http://shop.nordstrom.com/c/about-us?

origin=footer&cm_sp=corp-_-corp_AboutUs-_-globalfooternav_aboutus%20 Accessed
November 23, 2016.
Clay, Kelly. Nordstrom Sees Sales Boost From Mobile POS Devices. Forbes. April 6,
2012. http://www.forbes.com/sites/kellyclay/2012/04/06/nordstrom-sees-15-3-increasein-retail-sales-following-introduction-of-mobile-pos-devices/#7812390a703c Accessed
November 23, 2016.
Entrepreneur Staff. Point of Sale (POS) System. Entrepreneur: Small Business
Encyclopedia. https://www.entrepreneur.com/encyclopedia/point-of-sale-pos-system
Accessed November 23, 2016.
Farfan, Barbara. Department-Stores-Mission-Statements. The Balance. August 6,
2016. https://www.thebalance.com/department-store-mission-statements-4068552
Accessed November 23, 2016.
Nordstrom: A Case Study in Mobile Point of Sale. Odyssey Computing. September 24,
2013. http://www.odysseyinc.com/blog/nordstrom-mobile-point-of-sale/ Accessed
November 23, 2016.
Nordstrom Company History. Nordstrom. http://shop.nordstrom.com/c/companyhistory?origin=leftnav Accessed November 23, 2016.
Spear, Eric. The Challenges of Going Global with Mobile POS. Ingenico Mobile
Solutions. May 12, 2014. http://mobile-solutions.ingenico.com/blog/the-challenges-ofgoing-global-with-mobile-pos/ Accessed November 23. 2016.

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