CHAPTER 13 Customer Service at Nordstrom: A Way to Mitigate Potential Conflict? Customer service can become a contentious situa- tion when employees are confronted with dissatisfied or disgruntled patrons. How employees handle these situations will affect customer loyalty, the company's reputation, and its profitability. Handled well, such situ- ations can result in reduced conflict with customers and can strengthen a company's relationship with its cus- tomers. Handled poorly, these situations can erode cus- tomer relationship management and perhaps destroy the company. Nordstrom, an upscale retailer headquartered in Seattle, Washington, and operating almost 200 stores in about three-fifths of the states in America,l provides some valuable clues on how to do customer service the right way. "While Nordstrom was growing nationally, it focused on catering to customers' needs, individually. In- stead of categorizing departments by merchandise, Nor- dstrom created fashion departments that fit individuals' lifestyles. Today, Nordstrom has grown from one down- town Seattle shoe store into a nationwide fashion spe- cialty chain with renowned services, generous size ranges and a selection of the finest apparel, shoes and accesso- ries for the entire family. The company's philosophy has remained unchanged for more than 100 years since its establishment by John W. Nordstrom in 1901: offer the customer the best possible service, selection, quality, and value."2 Nordstrom is famous for its exceptional customer service. Whether true or not, a classic story about Nordstrom's service tells the public a lot about the high-end retailer's approach to customer relationship management. According to the story, " [a] man walked into the Nordstrom department store in Fairbanks, Alaska, with two snow tires. He approached the coun- ter, put the tires down and asked for his money back. The clerk, who'd been working there for two weeks, saw the price on the side of the tires, reached into the cash register and handed the man $145. It didn't mat- ter that Nordstrom sells upscale clothing and not tires. The customer wanted to return the tires. The clerk ac- cepted the return because that is what the customer wanted." 3 John Nordstrom, one of three brothers in 508 Copyight 2012 Leming All Rights May n senior executive positions at the retailer, "claims he was there and that the refund took place in a former tire store that had been converted [into] a Nordstrom outlet." 4 Nordstrom handles customer returns on a case-by- case basis.5 Sometimes Nordstrom will replace items years after their purchase to keep the customer happy. 6 "We really think a reason our customers shop with us is that we stand behind our merchandise," says a Nord- strom spokesperson. 7 "Returns of Nordstrom products do not have to include a sales invoice or a Nordstrom price tag.... Nordstrom knows it's not the price but the customer service that gains and retains loyal customers that generate strong profits." 8 Nordstrom's sales associates keep close tabs on their clientele so they can provide excellent customer ser- vice, especially to patrons who are frequents shoppers and who spend considerable sums of money. Associates carry a clientele book with them onto the selling floor and they refer to it when a recognized or high-valued customer comes into the store. The clientele book con- tains information about the specific customer's recent purchases, important dates, and fashion tastes, among 9 other data items. More recently, Nordstrom has begun "issuing mobile devices that workers on the sales floor can use to scour the company's inventory for a garment in a size a cus- tomer is requesting. The shopper pays on the spot, with no need to locate and wait at a cash register. 10 Nordstrom increasingly uses its large store network and large, centralized distribution hub to ship online or- ders quickly to customers. 11 In recent years, Nordstrom has invested heavily in integrating its online and store divisions, which has had the effect of providing better customer service because of merchandise being out of stock less frequently. 12 Another way in which Nordstrom effectively serves its customers is by seeking feedback from them. Lux- ury retailers like Nordstrom have "embraced online opening their websitesand the customer revrews, brands they sellto the slings and arrows of public opinion." 13 Nordstrom, being a leader among luxury PART 3 INTERPERSONAL PROCESSES AND BEHAVIOR put rights, third may the eCluptu(s) Edit that materially affect leuning Cengage Nes right to at any if rights iL