© Nordstrom

Fashion

The leader behind Nordstrom’s leap into resale

By Hilary Milnes
05 Mar 2020

Olivia Kim, VP of creative projects at Nordstrom, explains how she convinced its brands and executives to try a new business model.

Key takeaways:

  • “See You Tomorrow”, Nordstrom’s first foray into resale, required the buy-in from brand partners and executives to get off the ground.
  • Olivia Kim, VP of creative projects, says the need to respond to rapidly changing customer behaviour pushed the concept forward.
  • Resale is part of Nordstrom’s strategy to test new concepts, deprioritising perfection, to gather insights. 

Nordstrom has planted its flag in resale. The American retailer launched a pop-up shop called “See You Tomorrow” at its New York City store and a corresponding online resale component in January. Customers can shop a selection of clothing, accessories and jewellery from brands like Veronica Beard, Ganni and Balenciaga, either sourced from the Nordstrom Quality Centre, where lightly used returned items sit unsold, or from peers selling off unwanted wares.

The concept, which will live on through the summer as the company evaluates the business model, came together under Olivia Kim, Nordstrom’s VP of creative projects, who called it “one of the hardest things” her team has led. Needing the blessings of all brands involved, cooperation from Nordstrom’s internal teams and the help of a third-party partner, testing an emerging business model amounted to a more significant effort than usually falls under Kim’s purview.

Nordstrom VP of creative projects Olivia Kim. ©  Carina Skrobecki

“Since I’ve been here, I’ve been leading a guinea pig department. There’s a lot of trust,” says Kim, who leads a five-person team. “We’ve pushed the company forward in acting small and nimbly.” 

Kim was approached by then co-president Pete Nordstrom (now president and chief brand officer) in 2013 to jazz up the department store’s inventory selection. Her connections to interesting, offbeat and up-and-coming brands — Kim spent nearly 10 years at Opening Ceremony prior to Nordstrom’s poaching — were seen as an advantage in driving foot traffic and bringing in new customers. 

Overseeing the Pop-In@Nordstrom activations, launched the same year, Kim has ushered brands like Gentle Monster, Vitra Morrison, Everlane and Susan Alexandra into a selection of Nordstrom stores on a four to six weeks rotating schedule. Typically, her team brings new installations and partnerships to life in as little as six weeks. See You Tomorrow took six months from conception to launch. 

The push into resale speaks to the way Nordstrom has experimented overall with new approaches. Its Nordstrom Local stores have popped up in cities like New York and LA to serve as small format service hubs; a recent partnership with Rent the Runway brought the rental model into the fold. The company’s focus on innovative ideas is under pressure as department stores continue to be squeezed: its fourth-quarter 2019 earnings, announced Tuesday, missed estimates and sent shares tumbling 7.5 per cent. 

The result of the resale experiment, Kim hopes, will be to learn more about both the buyers and the sellers in the resale market and further normalise the business model. It could also serve as a customer acquisition channel by offering a more affordable way to shop that doesn’t include discounting. Regardless of outcome, its launch process demonstrates how a small and agile team within a broader organisation can push new ideas up the ladder.

Hacking logistics

For Kim, one of the first steps in bringing resale to Nordstrom was figuring out the logistical framework. The result: a partnership with Trove, formerly Yerdle, the turnkey resale platform that has powered the e-commerce backend logistics of brands including Patagonia and Eileen Fisher. Otherwise, Kim says, it would have taken up to twice as long to get the project off the ground. 

Trove’s system handles the cleaning, sorting and fulfilment of resale items through Nordstrom’s online site and in-store pop-up. It also offers pricing recommendations using an algorithm that factors in considerations like whether or not a brand is trending. Internally, Kim’s team led merchandising decisions and also worked with people on Nordstrom’s broader financial, growth strategy, creative and PR teams. More people and pieces had to come together than usual to get the greenlight for a new business initiative, and that required tact, says Kim.

Nordstrom’s See You Tomorrow resale space. © Nordstrom

“You can’t bulldoze your way through,” she says, adding that there were a lot of sign-offs involved. “Having to slow down just a little to get everybody on board was really important.”

Courting brands

To uphold Nordstrom’s existing relationships, Kim had to cross ground that resale sites like The RealReal don’t worry about: getting sign-off from every brand whose products could potentially be sold via resale. Kim likened the experience to “bringing 500 people with us on the journey”.

“The conversations with the brands were hard, and there were a lot of them,” she says. Kim and her team reached out to brand reps individually to explain their intent. “There were a lot of brands who wrote back and immediately said ‘Absolutely not, we don’t believe in that’.”

Part of Nordstrom’s conditions for operating resale was that it be fully transparent with all brands. To help facilitate the relationship, Nordstrom clears every product put up for resale and finalises their prices with brands. The hope is that being a transparent partner will make brands more comfortable and normalise the model. 

“The more you talk about it, the more comfortable people will get. The more people who are onboard the more people become onboard,” she says. “For brands it felt like a safe, comfortable way for them to engage with a customer through us as a trusted partner.”

Nordstrom’s ‘See You Tomorrow’ campaign. © Nordstrom

The most common concern among brands is that resale would cannibalise typical business, with customers skipping out on full-price products and instead opting for resale. Kim’s belief is that resale actually breaks down into two customer patterns, that of the sellers, and that of the buyers. Resale contributes to seller’s buying behaviour — a full-price handbag purchase is bolstered by the confidence that the bag has resale value; when it’s resold, the money made back is then put towards a new purchase. Buyers, meanwhile, are typically younger, aspiring luxury customers who otherwise can’t afford the brands they want to wear. 

Understanding outcomes

Nordstrom’s first foray into resale didn’t come with sales goals or specific metrics to hit, Kim says, but rather the objective of listening and learning from customers’ response. Her team is well positioned to listen to reactions thanks to its small size and ability to quickly adapt, she adds. She’s also conditioned to be willing to make mistakes.

The goal is to debunk the idea that resale cannibalises full-price sales, and find out who the resale customer is by age and demographic. Kim points to Eileen Fisher’s reworn resale business, also powered by Trove, which has a 70 per cent first-time customer rate, as proof of the model’s customer acquisition potential.  

Ultimately, Kim says, the point to remember is that retailers don’t need to reinvent the wheel in order to break new ground. 

“The word innovation gets thrown out a lot,” she says. “Innovation can mean perfecting something, listening to customers and continuing to be a part of the experience with them. It doesn’t need to be a shiny, brand new concept to make a difference.”

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