Men’s Dept. ‘The Rail’Applied BuyingBy Quinn Nevares

Company Overview

Company Overview• 1901 John W. Nordstrom & Carl Wallin

opened a small shoe store in Seattle, WA

• Corporate Headquarters: Seattle, WA• Annual Sales Fiscal 2013: $12.15B

• 1 year growth +11.69%

• Q2 ‘13 Highlights• Total company net sales $3.1B – +6.4%• Same store increase of 4.4%• Top performing merch. categories Men’s Shoes, Men’s Apparel and Cosmetics

• Men’s Contemporary Dept.: ‘The Rail’• Downtown San Francisco, CA • Westfield Mall• Fall 2013

‘The Rail’ Target Audience

Target Customer #1 • Jason• 17 years old• Applied to UCLA• Lives in Noe Valley• Supported by HSL income of

$200,000• Plays fantasy football, brand

conscious, enjoys video games and hanging with friends

Target Customer #2• Zack• 28 years old• Bachelors Degree from UCSF• Creative Technical Consultant for Google• Income $75,000• Lives in Russian Hill• Enjoys bike riding, alternative music, drinks local coffee and loves the SF Giants

Strengths • Men’s shoes and apparel top

performing category’s – Q2 ’13 Disciplined execution of expenses and inventory

• Strong communication with customer – lifestyle blog, social media, and online store

Opportunities • Expand outdoor and active

lifestyle merchandise category – more styles, more colors

• Marketing strategy – create exciting events that are dept. specific to drive traffic

• Expand brand partnerships

Weaknesses• Merchandise mix weighted

to fashion items – not enough basics

• Appeal overall to younger demographic with styles and colors

• Weak execution of promotional strategy – Anniversary Sale under-delivered

Threats• Weak economy may result

in inability to make sales plan

• Store expansion will create higher operating expenses

•Market Trends• Political Factors: -3%• Internet tax bill may threaten online sales•Newly appointed International Trade Representative – affecting cost of foreign labor and imported goods

• Economic: -2%• SF Bay Area one of lowest unemployment rates in CA 7.4% • Inflation projected 2% - up .3% from 2012•Retail Industry hopes to see increase in employment opportunities – expansion in domestic manufacturing

Market Trends• Social Factors: - +3%• Consumer Price Index is up +1.5% • Consumer Credit is up +1.9%• SF Tourism is up +1% and spending +5.5%

• Marketing & Promotional Plans - +5%• Private Holiday Shopping events for Fashion

Rewards Holders• Customers earn reward points and enjoy

free holiday treats, music and exclusive offers

Nordstrom’s Current Sales - visual• Sales to date for 2013 $5.7 B• Year to date same store sales increase of

+6.2%• Plan to open 3 full line stores in 2014, and

flagship in Manhattan by 2018

6 Month Plan• Projected Sales Plan: +7.2%• Plan Turnover of 1.7• Total Markup Percent: 55%

Current Sales • Sales to date for 2013 $5.7 B• Year to date same store sales

increase +6.2%• Plan to open over 25 stores in 2013,

and flagship in Manhattan by 2018

6 Month Plan• Projected Sales Plan: +7.2%• Plan Turnover of 1.7

• Total Markup Percent: 55%

Merchandise Mix Modifications

Tanks15%

T-Shirts35%

SS Button Ups30%

Shorts20%

Summer ’13 Assortment Mix

Denim30%

LS But-ton Ups25%

Sweaters25%

Jackets

20%

Fall ’13 Assortment Mix

• Added 30% denim for back to school and fall • Sweaters included for fall fashion trends - 25%• Jackets introduced for colder weather – 20%

Merchandise Mix Modifications

Blue/Green30%

Red/Orange35%

Graphics35%

Summer ‘13 Color Mix

Dark Red28%

Olive Green22%

Grey/Neutral30%

Black20%

Fall ‘13 Color Mix

• Modified graphics to gray tones – decrease 5%• Incorporated basic black into 20% of color mix• Dark red and olive green reflect fall color

trends

Fashion Trend Forecast• Upcoming fall trends show

neutral earthtone color palates• Rugged and outdoorsman

inspired – megatrend ‘Migration’• Incorporate floral, plaid and

tapestry accents• Well tailored pieces and layers

are key – fit is everything

Private Label Program: RailExclusive• Department was saturated with trendy colors

and fashion prints and graphics, need for basic styles/colors

• Introducing 2 key basic essentials:• Crew neck T-shirts w/ printed pocket for August• Zip- Up Hoodies w/ printed lining for September

• Launch for back to school, beginning of Fall season

• Apply additional 2% MU to overall plan of 55%

Private Label Program: RailExclusive

• Department saturated with trendy colors and fashion prints

• Need for basic styles/colors• Introducing 2 key basic essentials:• Crew neck T-shirts w/ printed pocket for

August• Zip- Up Hoodies w/ printed lining for

September• Launch for back to school, beginning of

Fall season• Apply additional 2% MU to overall plan

of 55%

• Men’s Basic V-Neck T Shirt

• Budget: 30% of LS Shirts Purchases for August - $23,700

• Price: $28.00/845 Units• Opportunity• Basic neutral colored T shirts

in White, brown and army with graphic print pocket and sleeve lining• Great opportunity to increase

markup and profit margin

• Men’s Zip-Up Hoodie• Budget: 50% of Sweater

Purchases of Sept - $20,200• Price $42.00/480 Units• Opportunity• Solid color options of dark gray,

maroon and black with hoodie printed hoodie lining and cuffs

• Promotional Event: Fashion Show Event

Fall ‘13 collection• Hosted and DJ’ed by Joshua Kissi and Travis

Gumbs of Street Etiquette - -successful men’s fashion/lifestyle blog

• First 100 guests will receive free Jack Spade iPhone case

• 20% discount on Jack Spade collection and RailExclusive

• Music, beverage and snacks • Styling tips from hosts Joshua and Travis• 10% of proceeds go to Project Open

Hand

Marketing Calendar:

August 5th send out postcard mailers to customers w/in 50 mile radiusAugust 12th email blastsAugust 19th announce event details on Facebook, Twitter, YouTube, Instagram, Tumblr and post on Men’s Shop BlogSeptember 9th repeat social media announcementsAugust 14th -September 14th promote w/in store hand out flyers/display invitationSeptember 14 Fashion Show September 14-15 20% discount on Jack Spade and RailExclusive