Nordstrom vs. Macy’s

Nordstroms vs. Macys Future Challenges Historically speaking, Canada has neer been a great grocery for American retailers. The Canadian dollar was weak, be were higher, and with limited real landed estate development, it was difficult to find space. Not any much, at one time the door to Canada is opening wider than ever thanks to a stronger Canadian dollar, a relatively robust economy, and a loosening of the commercial real estate market, in part beca implement of the downsizing of some longtime retailers like Sears Canada.For American retailers, Canadas allure is simple gross revenue per square foot at Canadian malls were al nigh 50 percent higher in 2011 than sales per square foot at American malls. This is a budding market that Nordstrom will need to act towards if they hope to keep up with the contestation in the future. Important Decisions Nordstroms has made numerous very of the essence(predicate) decisions in the past that have shaped them into the company they are tod ay. The root and virtually important came in 1901 when founder John W.Nordstrom decided to use the money he had left from the gold rush to open a shoe store in Seattle with Carl Wallin, called Wallin & Nordstrom. The conterminous big decision came in 1966 when it was decided that the Nordstroms shoe store in Portland would begin selling uniform as well. This marked a pivotal change in committee for Nordstroms. After the winner of the Portland store, it was decided to implement the idea in the another(prenominal) stores. In the 1980s Nordstroms experienced a boom. This was due to many factors but one of the most prevalent was their amazing use of guest support.Over almost anyone else Nordstroms prides itself on having some of, if not the best, customer support. This is helped by them recruiting managers from the ranks of salespeople thereby encouraging their employees to work harder while maintaining high moral. Nordstrom, along with the retail industry, sources products from around the world, and this means they encounter a wide range of orbicular challenges. Many of these challenges much(prenominal) as forced labor and health and natural rubber issuesare cause for very real concern for all retailers. To savoir-faire these concerns, Nordstrom created the Nordstrom Social Responsibility team in 1994.This team works well with their Nordstrom Product Group (NPG) manufacturers and vendors to ensure that Nordstrom-label products are made in compliance with all applicable laws and ethical labor practices. Past Challenges Single-digit growth became the norm for Nordstrom through and throughout the early and mid-mid-nineties. Sales grew sluggish thanks in heroic part to fluctuations in demand for womens apparel and the severe recession in southern California, where more than half of the companys total store square footage was rigid in the early years of the decade. The double-digit growth of the 1980s was gone.The sales increases of the 1990s were large ly attributable to new store openings. By 2003 after some(prenominal) changes in management Nordstrom appeared to have regained its lost luster through salute containment, technology initiatives, and a refocusing on its niche luxury goods at affordable prices. Some analysts considered technology to be the key component, particularly a new state-of-the-art merchandising system, which began to be rolled out in 2002. The system could track sales minute by minute throughout its stores, enabling Nordstrom to reduce markdowns and transgress target its offerings to customers.On the merchandise side, the retailer began introducing edgier way offerings in a department called via C, in an attempt to leverage its mall customer base, which was younger and had a wider age range than its main competitors, Neiman-Marcus Co. and Saks Incorporated. Nordstrom enjoyed its most profitable year ever in 2003. Nordstroms continued credit on aggressive sales tactics came around to bite them in previ ous(a) 1980s. The employees union (which was later decertified) complained about the pressure on employees to sell.In late 1989 a group of unionized employees charged that they were not being stipendiary for performing extra services to customers. In February 1990, after a three-month investigation, the chapiter State Department of Labor & Industries alleged that the company had systematically violate state laws by failing to even up employees for a variety of duties, such as delivering merchandise and doing inventory work. The agency ordered Nordstrom to change its allowance and record-keeping procedures, and to pay back wages to some of Nordstroms 30,000 employees.Soon after, the firm created a $15 million reserve to pay back-wage claims. The company, however, remained a target of class-action lawsuits on these matters, which were in the end settled out of court in early 1993 when Nordstrom agreed to pay a set percentage of compensation to employees who worked at Nordstrom f rom 1987 to 1990. The settlement personify the company between $20 million and $30 million. Specific belligerent Advantages One specific competitive utility Macys holds over Nordstroms is its target demographic. magic spell Nordstroms focuses generally on career moms between the ages of 35 and 50, Macys recently launched Millennial strategy states that its merchandise areas primarily serve ages 19-30. The millennial generation (ages 13-30) is now Americas largest and most diverse generation, spending an estimated $65 billion each year for the compositors case of merchandise sold at Macys. A much larger demographic gives Macys a competitive advantage. On the other hand, Nordstroms has a distinct advantage over Macys when it comes to customer loyalty and social-oriented traffic.Macys and Nordstroms have been largely based in malls for decades, but recently, malls have become less popular in the coupled States. As a result, both companies have been forced to open free-standing s tores in scattered locations in a community. Since Nordstroms has a slightly older demographic with more buying power and need for social status through brands, loyal customers of Nordstroms will be more willing to travel to divulge there. Macys, who targets a younger demographic, has less loyal customers with buying power and relies more on impulse buyers and young mall-goers looking to spend a forgetful extra money.Comparative Statistics In 2011, Macys boasted $26. 4 billion in net sales. That go in has grown steady since the economic crash of 2008. Nordstroms showed $10. 8 billion in net sales in the same year. Again, this figure has grown steadily since the economic downturn. Macys has a whopping 171,000 employees. Nordstroms has only 52,430 employees as of 2011. With Macys being a much larger chain, this difference is to be expected. Macys ope rank 400 stores in 33 states as of the year ended 2012. Currently, Nordstroms operates 109 stores in 28 states.In May of 2007, Macys reached its acme of prosperity in terms of market shares value and profitability. Its common mental strain price was valued at 45. 05 and business was looking up. Surprisingly, by October of the next year, the air price had plummeted as low as 7. 42 as the company struggled to stay afloat and fight through the crippling recession. Today, the stock has recovered to 41. 71, and is predicted to continue its growth. Nordstroms, however, has shown more resilience through the recession. While it windlessness fell from 55. 1 to 11. 37 in 2008, it has shot up to rates above its previous record. With the stock price as high as 57. 2 in the past year, Nordstrom shows a stronger trend of increase than Macys. drumhead We recommend investing in Nordstrom over Macys. With Nordstroms forecasted growth and success in Canadian markets, we expect Nordstrom to grow consistently for years to come. While Macys size and net income are attractive, we feel that Nordstrom has a better management struct ure and potential for growth in coming years.