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How Retailers Convince Coveted Brands to Go on Sale

Consumers can find discounts from countless retailers year round. Getting sought-after labels to join the fray is just one way the merchandiser’s job has grown more complex.
For Nordstrom's anniversary sale getting sought-after labels to join the fray is just one way the merchandiser’s job has grown more complex. (Courtesy)

Footwear aficionados shopping Nordstrom’s recent Anniversary Sale may have been surprised to notice a pair of Birkenstock slides among the markdowns.

The German shoe brand is known almost as much for its aversion to discounts as it is for its leather-and-cork sandals. But there were its Arizona double-buckle sandals, the brand’s bestselling style for decades, almost 25 percent off at $129.

It took Nordstrom’s merchants five years to convince Birkenstock to participate in the department store’s annual mega sale, which ran from July 17 through August 6. It was also crucial to its success: In a time when consumers can find discounts from countless retailers year round, Nordstrom needs something special to make its tentpole event stand out. This year, it also got the Swiss running shoe brand On and prestige beauty label La Mer to list some of their items in the sale, among others.

To execute, the Nordstrom’s Anniversary Sale requires an all-hands-on-deck approach — from big wigs at the company’s corporate offices to associates and managers on the selling floor. But Nordstrom’s merchants — the people responsible for selecting, buying and editing the brands and products — have arguably the most critical role in pulling the whole thing together.

It’s a job that’s become markedly more challenging and complex in recent years.

The retail landscape is as competitive as it’s ever been and fashion merchants have to anticipate and respond to an unrelentingly fast-paced trend cycle stoked by online shopping, social media and the sheer breadth of brands constantly entering the marketplace. Department stores, meanwhile, don’t hold the same allure that once made them the first-stop for buzzy labels.

“The [merchant] job is so much more difficult today and a lot of it comes down to … the customers have a lot more choices,” said Liza Amlani, a longtime retail merchant and principal at business consultancy Retail Strategy Group. “There are a lot more brands to go through to make sure that they are buying into the most relevant ones.”

Winning Over Birkenstock

Convincing notoriously protective brands to join a sale rarely happens overnight. With Birkenstock’s sandal, Nordstrom sold countless pairs at full price to confirm its own luxury-retail positioning, said Tacey Powers, Nordstrom’s executive vice president and general merchandise manager of shoes and kids apparel buying.

The retailer and the brand also had to agree on “select products” to feature in the event. They landed on two styles — the Arizona double-buckle slides and the single-buckle Madrid slides — both with a cream-coloured straps.

“The growth we’ve had with Birkenstock and the way we’ve cared for their brand led them to say, ‘OK, this is important to Nordstrom, and it’s important to the Nordstrom consumer,” Powers said. “So for this one event, we’re going to participate … This is our gift for the season.

The power dynamic might have been reversed in the past.

When department stores drove trends, the merchant of yesteryear was empowered to dictate that pink was the “it” colour for fall or that cowboy boots were in for summer. Today’s merchant is increasingly responding to trends that could emerge from the selling floor, a viral TikTok video or a direct-to-consumer brand that built a cult following without a retailer’s help.

When it comes to sales events, in the past, items were earmarked for discounts months in advance. Now that trends shift faster, the assortment “could change at any moment,” Powers said.

The seasonal approach to fashion merchandising is also on the way out. While the Anniversary Sale used to target shoppers looking to stock up on fall wardrobes — plenty of boots and sweaters — these days there are more summer-friendly sandals and crop tops marked down.

“We’ve tried to keep these conversations where we’re locking in on styles as fluid as possible,” Powers said.

How the Merchant Role Has Evolved

For merchants, responsibilities have pivoted from manual tasks — like perusing the sales floor and making note of the emptiest racks or checking in with associates on the hot buys of the day — to using software to analyse revenue data and scouring social media to take stock of what the most popular influencers are wearing, Amlani said.

To strike the right balance, merchant teams need the right mix of veterans — or more traditional buyers who have seen trend cycles come and go — and younger talent who bring a fresh perspective and may be more attuned to niche digital communities, said Caroline Pill, partner at executive search consultancy Heidrick & Struggles’ London office, focused on the global fashion, luxury and beauty industries.

At Nordstrom, Powers said younger members of their buying teams are often deeply invested in social media trends and can even boast sizable followings of their own.

Nordstrom's merchants respond to trends that emerge from the selling floor, viral TikTok videos and direct-to-consumer brands generating buzz online.

“Their voice becomes very important in the buying meetings,” Powers said. “I really try to leverage people that are just living in the midst of that and are looking for emerging trends.”

Keeping an eye on social media chatter is one of the ways Powers and her team become hip to the direct-to-consumer brands gaining traction among the department store’s consumers and determine which ones to add to the sale. Shoe brands Allbirds and Larroude, bedding label Parachute and housewares brand Our Place were among the brands the department store added to this year’s sales lineup.

Today, managing a retailer’s relationships with its most sought-after labels increasingly requires merchants to lean into soft skills like communication and problem-solving to be the “eyes and ears for brands,” Pill said.

Powers has employed similar strategies to help bring brands along — including sharing proprietary sales data with suppliers so they can make more lucrative decisions at their own points of sale and advising their design teams on popular materials or colours.

A Different Sales Event, a Different Merchant

The new tactics, and new brands, have helped Nordstrom adapt to a rapidly changing market. But the retailer isn’t immune to the broader decline in department stores’ fortunes. Its revenue fell 11.6 percent from a year earlier to $3 billion in the first quarter of 2023. (The department store reports second-quarter results on Aug. 24.)

“For better or worse, Nordstrom embraced and introduced everything we’ve come to know about e-commerce … and customer centricity and direct-to-consumer brands,” said Simeon Siegel, managing director and senior analyst specialising in retail and e-commerce at BMO Capital Markets. “That’s what inspired their customer loyalty… and the brand affinity for Nordstrom appears louder than its actual performance over the last few years.”

Nordstrom's anniversary sale.

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