The struggling luxury retailer once looked at e-commerce as both its enemy and potential salvation, but now Nordstrom has decided to pull back from planned e-commerce infrastructure development.
The cities of Visalia and Fresno, CA, had both been in talks with the company about serving as the site of a proposed center, but on June 15 each city’s government received identical letters from co-president Erik Nordstrom saying the firm decided to put the deal off, Chain Store Age reports.
Part of the reason is the volume of Nordstrom’s e-commerce sales—online orders accounted for 20% of the retailer’s revenue in Q1, but the firm admitted to analysts that the costs of fulfilling these orders is cutting into profits. It’s likely Nordstrom wants to wait until e-commerce represents a larger chunk of its profits before building a digital fulfillment center, but with Amazon busy expanding, who knows if those online sales will be able to climb much higher. [CSA]
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