Nordstrom relaunched its loyalty program in 2018, switching its name from the old Nordstrom Rewards to The Nordy Club. While its new name may not seem as recognizable, the company seemed to have grasped the importance of reward programs in increasing customer lifetime value.
According to Nordstrom’s CMO, Scott Meden, the retailer had observed that over 10 million of their active loyalty program members spent about four times more than customers who were non-members. This statistic is undeniable proof of the effectiveness of a good loyalty program on buyers' habits and has directly influenced the company’s decision to place more emphasis on its loyalty program by making it more valuable and easy to access.
In this article, we will be looking at The Nordy Club rewards program in its entirety, assessing its strengths as well as some of its drawbacks that need to be worked on.
How does The Nordy Club work?
The Nordy Club uses a points-based system as well as a tiered approach to reward customers. On every purchase made at Nordstrom, HauteLook, Trunk Club, and Nordstrom Rack, the Nordy Club members earn some points. To join the program, one can sign up for free at Nordstrom.com or apply to become a Nordstrom credit cardmember. However, the number of points you can earn per dollar depends on whether you have a Nordstrom credit/debit card or not.
Within the rewards program, there are four different tiers determined by the amount a customer spends yearly at Nordstrom and whether they have a brand credit card. The more one spends in their stores, the quicker they advance in the levels.
The first tier is labeled Member, and it is open to every customer that joins. Insider is the next level, and customers are granted access immediately when they become Nordstrom cardholders or when they spend $500 or more at their stores per calendar year. After this stage, customers can progress to the next tier, known as the Influencer level, when they spend $2,000 or more per calendar year shopping. The last and most prestigious tier is the Ambassador level reserved for members who spend over $5,000 per calendar year transacting with the brand.
For all of the levels, members can maximize the number of points they earn by simply owning the Nordstrom Credit Card. This allows them to receive 3 points for every dollar spent in any of their stores. Members who own the Nordstrom Debit Card earn 2 points per dollar spent, whereas members who do not have any of these and use other means to pay only earn a point per dollar spent.
Points earned are translated to Nordstrom Notes which can be redeemed for any future purchase online or in-store at Nordstrom Rack, HauteLook, or Nordstrom. Members who use the mobile app can unlock Notes in $5, $10, $15, and $20 increments. Points that are not redeemed will expire within three years or when the account is closed.
- First access to shop from selected brands
- Free basic alterations
- Curbside pickup
- Access to style and beauty workshops
Insider ($500 -$1,999 spent/ Cardholder)
- All Member benefits
- Early Access to Anniversary Sale for cardholders only
- $100 annual alterations credit also for cardholders
- One Personal Double points day to be redeemed anytime
Influencer ($2,000 -$4,999 spent)
- All Member and Insider benefits
- Two Personal Double Points Days
- Access to Style events
- $200 annual alterations credit for only cardholders
Ambassador (Over $5,000 spend each year)
- All Member, Insider, and Influencer Benefits
- Nordstrom to You (in-home stylist)
- Exclusive access to invite-only events
- Three personal double points days
- $300 annual alterations credit for cardholders
What are the good things about the program?
The Nordy Club loyalty program is a solid improvement of the brand’s previous rewards program. One of the best things about this new program is how understandable it is for customers. Members can clearly see all the value they are receiving as they progress from one tier to another through a transparent explainer page. With a good view of the benefits they can gain, customers are motivated to join with little hesitation.
Another good thing about the Nordy Club program is the actual worth of value it delivers to its members. Aside from excellent perks such as exclusive access to sales, discounts, and new brands, the company offers unforgettable experiential rewards to members at all levels. They enjoy experiential benefits such as free curbside pickups, free alterations, beauty workshops, in-home stylist visits, private events, among other incredible rewards. These benefits ultimately make the customer feel valued and encourage them to increase their spending so that they can enjoy all benefits at the Ambassador level.
One of the most unique features of this rewards program is its generous point redemption period. Unlike most companies, Nordstrom relieves the pressure off their customers by giving a gracious redemption period. Customers have three years from the last day of the year to redeem the points they earned. This lengthy period is incredible because customers have the luxury of choosing when and how to redeem all the rewards they earn within those years.
How could they have made their rewards program more attractive?
While the Nordy Club rewards program comes close to perfection for its customers and when compared with a host of other loyalty programs, there is always something that can be improved upon to make it more attractive.
For this brand, the most notable drawback is the fact that it takes relatively more spending to redeem rewards from points accumulated. For instance, customers need to earn 2,000 points before they can redeem a $20 reward. While this may not be a problem for cardholders and big regular shoppers in their stores, it may be discouraging for new customers to pursue in the first place. Certainly, other perks can be enjoyed regardless of the amount a customer spends, yet, a good loyalty program ensures that goals set for every level are easily achievable. Nordstrom can make the program even more attractive if they consider reducing the number of points needed to redeem a note.
In whichever way one decides to participate in the program, Nordstrom’s The Nordy Club provides great value to customers who take advantage of it. The rewards program is exemplary because of how it offers incredible value in its perks, free shipping, flexible return policy, and variety of experiential benefits. The loyalty program is definitely better for Nordstrom cardholders, but still gives room for the average member to enjoy some unique perks for shopping.
This article is part of our series of case studies of loyalty programs implemented by the world's most famous brands.