About four months ago, I wrote a post about modern return policies and their impact on consumers’ decisions to buy. As I wrote back then, knowing that you can return something makes it less “scary” to make a purchase- you feel like you have an out, even if you’re the type of person who will never actually take goods back. One of the stores I mentioned in my post- Nordstrom- made air waves last week when it announced that it will now start selling “refurbished” shoes in its Rack stores. Nordstrom Rack is more or less an outlet store model for the brand- it’s where Nordstrom unloads the merchandise that didn’t sell well in normal stores. Rack locations definitely have less of an upscale edge than the normal stores do, but they’re still distinct from places like TJ Maxx that aggregate overstocks and undersold merchandise from a variety of places.
But what are refurbished shoes, you ask? Well, seems like they’re a sort of answer to Nordstrom’s ridiculously liberal return policy. Since Nordstrom will basically accept any return without question, its stores must end up with tons of merchandise that isn’t in the right conditions to be resold. Imagine shoes that have clearly been worn, scuffed up, broken heels, etc. So the company has decided to start cleaning and repairing returned shoes, which will then be sent to Rack stores and labeled as refurbished. The shoes will be marked down accordingly, since they’re essentially used merchandise. The strategy allows Nordies to make a few bucks off shoes they otherwise couldn’t sell, and gives customers a chance to buy discounted shoes.
This all sounds pretty logical, right? And yet, the strategy is causing a bit of a debate in the brand strategy world because it’s changing the merchandise mix in Rack stores. Fancy language aside, these refurbished shoes are essentially used. And used clothing isn’t exactly Nordstrom’s cup of tea, even in its outlets. So many brand strategists argue that the move is cheapening Nordstrom’s overall brand by changing the level of quality customers will come to expect. The opposing argument is that this move helps Nordstrom retain some profit margins and helps customers afford shoes they couldn’t have bought otherwise. After all, many fashionistas use thrift stores to score cheaper versions of classic designs.
I’d be worried if I saw “refurbished” shoes popping up in the main Nordies stores, but I’m not particularly concerned about their arrival in the Racks. As long as they are clearly labeled, appropriately priced and appreciated by customers, I’m all for it. But I wouldn’t want to see the Rack stores start selling other used merchandise- e.g. purses or dresses. In my opinion, once this strategy goes past a single category, the brand will indeed start to involve. And I don’t necessarily think for the better, because even though it is an outlet, the Rack maintains some of power of the Nordstrom brand. It will be interesting to see how this experiment fares- and whether Nordstrom decides to turn its outlets from “didn’t yet sell” shops to resale shops.