Nordstrom Cuts Direct Mail Program, Loses Sales

On Tuesday, Nordstrom cut its forecast for full-year sales and profit after reporting weaker-than-expected first-quarter results that were hurt, in part, by stopping its use of direct mail to promote its new loyalty program. According to Yahoo Finance, co-president Erik Nordstrom said on a post-earnings conference call that the company stopped sending rewards “notes” to its loyalty customers by mail in an attempt to get the program online and reach customers faster. That shift caused a reduction in foot traffic at all of its stores, Nordstom said, as many customers rely on receiving those rewards by mail. “We’re making the changes we believe are necessary to drive our top line as we continue our aggressive focus on expenses,” Erik Nordstrom said. The company also said trends from the fourth quarter continued into the first quarter and that it had to ramp up promotions in order to clear excess inventory from its winter collection.

Total Retail’s Take: It’s rare that an executive says that cutting direct mail from a company’s advertising budget can have such a negative impact on sales, but that’s essentially what Erik Nordstrom said. We’re not sure if Nordstrom will…

Read The Full Article