SWOT Analysis of Nordstrom Rack | In-Depth Research

In a recent blog post, we discussed Best Buy SWOT Analysis. In this article, we are going to give you a thorough report on a swot analysis of Nordstrom Rack to better understand the company’s strengths, weaknesses, opportunities, and threats.

Summary SWOT Analysis of Nordstrom
  • Diverse portfolio of brands (Nordstrom Rack, Trunk Club, etc.)
  • Luxury and designer merchandise
  • Strategic partnerships with emerging brands
  • Strong financial performance and growth
  • Excellent customer service
  • Flexible return policy
  • Innovative in-store experiences
  • Very high pricing
  • Product portfolio lacks diversity
  • Minimal international presence
  • International expansion
  • Enhance online visibility
  • Diversify product offerings
  • Struggling retail industry
  • Competition from e-commerce
  • Counterfeit products
  • Economic recession
  • Highly competitive market


Nordstrom Overview

If you live in the United States, you’re probably already familiar with this brand. Nordstrom was founded in 1901 by John W. Nordstrom and Carl F. Wallin. The company had its major locations at Seattle and Washington when it started. At first, it was only a shoe store, but with time, it evolved into a high-end department store chain and has since become a fashion powerhouse, with over 350 stores in operation.

Obviously, Nordstrom has been around for quite a long time, and its items are well-liked by several people today. In this Nordstrom SWOT analysis, we’ll look at how the company has been able to grow in such a highly competitive environment and while it is still surviving today.

SWOT analysis of Nordstrom Rack


SWOT Analysis of Nordstrom

Strengths of Nordstrom

A Diversified Portfolio

When it comes to the most important purchasing demands of today’s customers, Nordstrom has a wide range of products, including Nordstrom Rack (cheap shops), Haute Look, Trunk Club, and Bevy Up.

Luxury Designer Clothing

Nordstrom has made a name for itself as a strong department store that sells high-end and designer clothes, shoes, bags, and other items.

Strategic Partnerships

Different small companies like Top Shop, Allbirds, and Greats are the top parts of this firm. Nordstrom separates itself from its competition by working with these strategic companies that are technologically native and direct-to-consumer.

Strong F$inancial and Business Development

Nordstrom’s economic situation is obviously good, with $15.7 billion in annual revenue (2019) and rising quickly. This is owing to its rack-store, e-commerce sites, anniversary discounts, pop-up stores, and campaigns.

Exceptional customer care

One of Nordstrom’s greatest assets is its dedication to providing each and every one of its VIP customers with the highest level of service possible. When customers or guests enter the store, a sales associate welcomes them and helps them locate the items they’re looking for.

Incredibly Flexible Returns Policy

Customers may shop with confidence at Nordstrom because of the store’s generous return policy.

A leader in innovative customer experiences

Nordstrom was the first department store in America to use digital technology to enhance customer satisfaction.
It has built a new flagship shop in New York City that lets consumers try on garments digitally and access a Trunk Club to personalize the items before they purchase them in-store or online.
Admittedly, no matter how popular a brand becomes, its flaws will always be exposed. Over the years, Nordstrom has had vulnerabilities of its own. The most important ones will be discussed in the next section.

Extremely Pricey

No matter how rich the target market is, it’s still tough to maintain a significant market share if the vast majority of people can’t afford the things you’re trying to sell. The market gets quite constrained when you’re a luxury brand.

Similar Products

Although Nordstrom has a broad range of merchandise, much of it is of a similar kind, such as clothing, shoes, accessories, and other home goods. The firm has to come up with new product lines that don’t fit into the same categories.
As a result, they’ll be able to expand into other sectors and maintain their sales consistency while one industry is experiencing a slowdown in business.

Lack of internationalization

It is clear to everyone that the firm has only operated in three nations. The United States and Canada have not yet tapped into the huge market of potential customers in emerging economies.
You can imagine how much their firm would grow if they were to join the Chinese and Indian markets. The possibilities are virtually limitless, even if they choose to begin by expanding into more advanced nations. They need to get rid of this flaw as quickly as they can.

Opportunities for Nordstrom

The brand has an infinite number of options to choose from. Regardless of how long they’ve been in the industry, there will be something fresh.
As long as a company is able to notice that many opportunities are available for it to explore, there is no need to worry about anything for too long. We’ve compiled a list of relevant options for the business to consider.


If businesses make smart decisions to enter new markets in other nations, they can reduce one of their shortcomings. The company’s profitability will only improve if they make the decision to do so.

Increased Visibility Online

Online shopping has grown more commonplace since the COVID-19 epidemic rocked the world, and this gives the company an opportunity to improve their digital presence.
They focus mostly on their brick-and-mortar businesses, not their internet ones. Even though they don’t have to have physical stores all over the world, they might have a worldwide reach if they worked together more closely on this side.


Another way to strengthen their position is to diversify their portfolio by investing in items and markets that are entirely unrelated. The organization will be able to grow in many locations, but it will also be able to stay viable if a particular industry is struggling.

Threats of Nordstrom

Apocalypse of the Retail Industry

According to Euromonitor, purchases at clothing stores have fallen for the previous five consecutive years. According to the Commerce Department, department store revenue decreased by 4.8% in the first 9 months of 2019. It’s possible that Nordstrom may go out of business if the retail disaster continues in the years to come.

E-commerce Giant

There are now a large number of premium brands accessible on Amazon that were previously only sold by high-end stores. High-end luxury retailers like Nordstrom are at risk from this trend.

Product Counterfeiting

Nordstrom’s elevated products might face a serious challenge from fake items, which are becoming more accessible and of higher quality. A study from the US Government Accountability Office says that Customs and Border Protection seized $1.38 billion worth of fake goods in 2016.

Economic Recession

Based on our research in the previous three years, experts believe the current economic strength is only the “quiet before the storm.” This is a bad sign for Nordstrom since its high-end goods will be among the first to be affected by the downturn.

Highly competitive

Rivals such as Bloomingdales and Saks Fifth Avenue are challenging Nordstrom. TJ Maxx, JC Penney, Kohl’s, and many more are also challenging this company. In a market where there are more and more competitors, Nordstrom may lose a lot of customers.

Final Thought On Nordstrom SWOT Analysis

When it comes to retail in the United States, Nordstrom is among the best-known names. Following more than a century in business, the company now has a respectable share of the market. Major obstacles include rivalry in the market, the need to lease apparel, the threat of a global pandemic, and a lack of options for expansion. To address these escalating concerns, Nordstrom should diversify its portfolio and broaden its market.

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