Nordstrom, Inc. (JWN): Business Model Canvas [Dec-2025 Updated]

You're trying to map out the current engine room of Nordstrom, Inc. (JWN), and honestly, the real story isn't just the premium department store anymore; it's the calculated split between luxury service and off-price value. After two decades analyzing retail, I can tell you this dual-format strategy is what drove their $15.02 billion in total revenue for fiscal year 2025, even while they manage high Selling, General, and Administrative expenses around 36.6% of net sales in Q3 2025. The aggressive push, like planning 16 more Nordstrom Rack stores for FY2025, shows where the near-term growth focus is, balancing brand equity with value-seeking customers. If you want to see exactly how they connect their strong brand reputation, The Nordy Club loyalty base, and that high-growth Rack segment across all nine building blocks, dive into the canvas I've laid out below-it's the clearest snapshot you'll find.

Nordstrom, Inc. (JWN) - Canvas Business Model: Key Partnerships

You're mapping out the external dependencies for Nordstrom, Inc. as of late 2025. These relationships are critical for inventory flow, customer financing, and physical footprint expansion.

Brand vendors and designers for exclusive merchandise and concessions.

The relationship with brand vendors is foundational, especially given the inventory strategy. Growth in top brands at both banners was a primary driver for the 11% increase in ending inventory as of February 1, 2025, compared to the prior year. Nordstrom Rack specifically continues efforts to introduce more premium brands to its assortment. The Nordy Club, Nordstrom's loyalty program, connects directly to this value exchange, boasting over 14 million members as of late 2025, driving engagement across the vendor base.

Financial institution partner for the Nordstrom credit card portfolio.

The partnership with the financial institution, TD Bank USA, N.A., saw a significant structural change. In October 2024, the program agreement was amended to transition customer-facing activities to TD. This transaction brought Nordstrom $280 million in publicly disclosed cash during the fourth quarter of fiscal year 2024. For the full fiscal year 2024, revenue including retail sales and credit card revenues increased 2.2 percent. Looking ahead, projections from August 2024 estimated credit card revenues as a rate of sales for fiscal year 2025 to range between 3.2% and 3.3%.

Technology and logistics providers for digital platform and supply chain.

Success hinges on providers supporting the integrated network. The company has expanded its RFID technology penetration across locations to enhance real-time inventory visibility and accuracy. Furthermore, the digital marketplace is a key focus, expected to scale in 2025, which relies on robust technology partners for seamless integration and transaction processing. Logistics providers handle the operating cash outflows, which include payments for shipping carriers.

Real estate developers for new Nordstrom Rack store locations.

The aggressive physical expansion of the off-price division is heavily reliant on real estate developers. Nordstrom expects to open 25 new Nordstrom Rack stores per year from fiscal year 2025 through fiscal year 2028. In fiscal year 2025, the plan was to open 21 new Rack locations, following 23 openings in fiscal 2024. New Rack stores generally range in size between 23,000 square feet and 36,000 square feet. Kite Realty Group (KRG) is one entity involved in managing shopping centers where these stores are located.

Here's the quick math on the planned Rack footprint growth:

Digital marketplace vendors to broaden product choice without inventory risk.

The scaling of the digital marketplace is a strategic priority, allowing Nordstrom to offer a broader assortment. This model inherently reduces inventory risk for the company by shifting procurement or consignment to third-party vendors. The marketplace is viewed as a potential medium-term digital GMV catalyst. The company also offers merchandise through other digital channels, including Nordstrom.com, Nordstrom.ca, and ASOS.

• Digital sales represented 38 percent of total sales in the fourth quarter of fiscal 2024.
• Digital sales represented 36 percent of total sales for the full fiscal year 2024.

Nordstrom, Inc. (JWN) - Canvas Business Model: Key Activities

You're looking at the core engine driving Nordstrom, Inc.'s performance right now. It's all about making the physical and digital experience feel like one seamless transaction, especially with the off-price banner leading the charge for new customers.

Operating and expanding the Nordstrom Rack off-price banner

The focus here is definitely on the Rack banner; it's where new customers are coming from. For fiscal 2024, Nordstrom opened 23 new Nordstrom Rack stores across the U.S.. Management expects to open a 'similar number' in 2025, with specific announcements pointing to plans for 22 new Rack stores in 2025. This expansion is a solid investment, as these stores deliver returns well above the cost of capital with a short payback period. The off-price segment is showing strength, reporting a net sales gain of 8.8% to $1.27 billion and a comparable sales advance of 4.1% versus fiscal 2023 in a recent second-quarter report.

Here's a snapshot of the Rack expansion focus:

• Rack stores are the largest source of new customers for Nordstrom.
• Rack segment saw a 14% increase in net sales recently.
• Specific 2025 openings include locations in Matthews, NC, and Geneva, IL, in Spring 2025.
• A new store in Surprise, AZ, is set to open in the fall of 2025.

Executing the digital-first, omnichannel fulfillment strategy

The integration of channels is non-negotiable for profitability. Customers who engage across both the Nordstrom and Rack banners, online and in-store, spend 12x more than single-channel shoppers. Digital sales are a major piece of the puzzle; in Q3 2024, digital represented approximately 34% of total sales, showing sequential improvement for the fourth consecutive quarter. The Buy Online, Pick Up In-Store (BOPIS) and curbside pickup programs are crucial, with the click-and-collect channel being the most profitable touchpoint for Nordstrom. You've got to connect those capabilities.

Curating and merchandising a diverse, multi-brand product assortment

Both banners generate revenue by offering a wide selection of third-party and private-brand merchandise. The Rack banner is specifically focusing on introducing more premium brands and optimizing its product mix. Nordstrom operates under several key trademarks, including Nordstrom, Nordstrom Rack, HauteLook, and private labels like Halogen, Caslon, BP, Zella, 1901, Treasure and Bond, and Tucker+Tate.

The scale of the merchandising operation is vast, supported by technology:

Managing the Nordstrom credit card and loyalty program (The Nordy Club)

The Nordy Club is central to driving sales velocity. Loyalty sales comprised nearly 70 percent of total sales in the first quarter. Cardmembers get an Extra 5% Off at Nordstrom Rack on every purchase when using their card. For earning points, members earn 1 point per dollar by providing a mobile number, or up to 3 points per dollar when using the Nordstrom Card.

Here's how status tiers are earned based on annual spend:

• Member: No minimum dollar amount spent per year.
• Influencer: Minimum $500 per year.
• Ambassador: Minimum $5,000 per year.
• Icon: Minimum $15,000 per year.

The conversion rate for points is 1,000 Points = $10 Note.

Investing in supply chain technology to lower variable fulfillment costs

Technology investment is focused on efficiency and accuracy to reduce variable fulfillment costs. Nordstrom is prioritizing technology investments in supply chain capabilities. The company is using RFID tags on items at more stores to improve inventory accuracy and speed of service. This technology helps track sales velocity and allows associates to quickly locate products, speeding up in-store experiences. The VP of Strategic Sourcing and Procurement is responsible for a holistic transformation impacting over $3.5 billion in annual non-merchandise spend. The retailer is exploring technologies like AI, machine learning, big data, and robotics to achieve operational efficiencies.

The goal is to leverage existing physical space with new technology to deliver products quickly, whether for in-store pickup or home delivery. Finance: draft 13-week cash view by Friday.

Nordstrom, Inc. (JWN) - Canvas Business Model: Key Resources

The Key Resources for Nordstrom, Inc. are the assets required to deliver its value proposition across its integrated retail ecosystem. These resources underpin its competitive position in the market as of late 2025.

Strong brand equity and reputation for exceptional customer service represent an intangible asset cultivated over decades. This reputation translates into tangible customer preference, as evidenced by first quarter 2025 performance where Nordstrom saw a year-over-year foot traffic increase of 3.3%, while key rivals experienced declines around 6%.

The established omnichannel network is a critical physical and digital infrastructure. As of the fiscal year ended February 1, 2025, Nordstrom operated a total of 377 stores, which included 277 Nordstrom Rack locations. The total retail store square footage stood at 26.43M. Digitally, the company maintained a significant presence, with digital sales accounting for 36% of total sales for the fiscal year ended February 1, 2025. The total company annual revenue for the fiscal year ending February 1, 2025, was $15.02B.

The Nordy Club loyalty program is a core mechanism for customer retention and data capture. While the most recent specific active member count is not available for late 2025, the program scale is significant, previously reported to be more than 10 million unique active rewards members. The structure of the program itself is a key resource, offering tiered benefits:

• Cardmembers receive an instant 5% discount at Nordstrom Rack on every purchase.
• Influencer status members earn 2 points per $1 spent at Nordstrom.
• Ambassador and Icon status members earn 3 points per $1 when using their Nordstrom card.
• Alteration reimbursement Notes are available up to $300+ for top tiers.

Proprietary data and technology enable personalized engagement, a direct result of the loyalty program and omnichannel operations. This integration drives higher customer value, as the average customer shopping across both Nordstrom and Nordstrom Rack banners, in both stores and online, spends over twelve times more than a single-channel shopper. Furthermore, Nordstrom Rack serves as the primary acquisition channel, with 25% of its shoppers eventually migrating to the full-line Nordstrom banner.

Nordstrom Made private-label brands contribute to margin potential. As of the latest reports, these brands represented approximately 8% of total revenue, with an internal goal to nearly double that contribution. In Q2 2024, private labels contributed to a gross profit margin of 36.6% on the Anniversary Sale.

Nordstrom, Inc. (JWN) - Canvas Business Model: Value Propositions

The value proposition for Nordstrom, Inc. centers on a dual-banner strategy that caters to both premium and value-seeking customers, underpinned by a commitment to service and channel integration.

For the full-line Nordstrom banner, the value is access to premium and luxury brands supported by exceptional service. In the first quarter of fiscal 2025, full-line comparable sales increased 3.8% compared to the same period in fiscal 2023. As of September 23, 2025, there were 394 Nordstrom locations in the United States. The company also focuses on curated brand partnerships, such as expanding its Indochino shop-in-shops to a total of 33 locations within Nordstrom stores by August 2025.

The Nordstrom Rack value proposition is centered on high-quality, coveted brands offered at a discount. The Rack banner is a key customer acquisition engine, with 25% of Nordstrom Rack shoppers migrating to the full-line Nordstrom store within four years. The Rack banner showed strong momentum, with net sales increasing 13.8% in the first quarter of fiscal 2025. Furthermore, Rack comparable sales grew 4.1% in the second quarter of the prior year. The company aims to have nearly 300 Nordstrom Rack stores by the end of 2025, with an ultimate target of operating 400 stores by the end of 2028.

A seamless shopping experience across physical and digital channels is a core offering. For the fiscal year ending February 1, 2025, digital sales represented 36% of total sales. In the second quarter of the prior year, digital sales accounted for 37% of total sales. For the Nordstrom.com domain in October 2025, the average order value (AOV) ranged between $225 and $250, while the conversion rate was between 1.50% and 2.00%.

Personalized styling services and convenient local service hubs are delivered through formats like Nordstrom Local. The company closed one Nordstrom Local service hub subsequent to the fourth quarter of fiscal 2024, with plans for it to reopen as a storefront dedicated to personal styling.

Hassle-free returns and easy in-store pickup for online purchases are integrated across the network. Specifically, customers can take advantage of convenient services such as online order pickup from both Nordstrom.com and NordstromRack.com, and make returns at each Nordstrom Rack location.

Here's a quick look at the banner performance metrics from recent periods:

The overall financial context for the period leading up to late 2025 includes:

• Fiscal Year 2025 Total Revenue: $15.02 billion (for the fiscal year ending February 1, 2025).
• Fiscal Year 2025 Net Earnings: $294 million (for the fiscal year ending February 1, 2025).
• Total Company Net Sales (Q1 FY2025): $3.34 billion.
• Digital Sales as % of Total Sales (Q1 FY2025): 34%.

Nordstrom, Inc. (JWN) - Canvas Business Model: Customer Relationships

Highly personalized, high-touch service in full-line stores.

Nordstrom, Inc. maintained its reputation for exceptional service, evidenced by its ranking in America's Best Customer Service 2025, where the Bricks-and-Mortar Retailers: Clothing, Department Stores category placed Nordstrom at rank 86.59 overall. Nordstrom Rack was ranked at 80.13 in its respective category. In the first quarter of 2025, Nordstrom saw a 3.3% increase in year-over-year foot traffic, outperforming rivals Saks Fifth Avenue and Neiman Marcus, which experienced declines of around 6%. Shopping assistants are known to bring items to customers and hand-deliver purchases around the cashier counter.

Automated, data-driven personalization through the digital platform.

Digital sales represented 36 percent of total sales for the fiscal year ended February 1, 2025. For the fourth quarter of that fiscal year, digital sales accounted for 38 percent of total sales. For October 2025, nordstrom.com generated online sales revenue of $178,729,916 across 43,488,349 sessions. Desktop devices finalized a large majority of these sales at 74%, with mobile web (excluding app usage) accounting for 26%. Data analytics is used to tailor rewards, with 91% of consumers indicating they are more likely to shop with brands that offer personalized offers. Furthermore, customers utilizing virtual styling services showed a 40% higher retention rate.

The Nordy Club loyalty program for rewards and status-based benefits.

The Nordy Club is central to fostering loyalty, with 77% of consumers more likely to stay loyal to brands with strong rewards programs. The program operates on a tiered structure based on annual spending. The fundamental reward conversion is 1,000 points equaling a $10 Nordstrom Note.

Cardmembers using the Nordstrom Visa® Credit Card earn up to 3 points per dollar spent at Nordstrom. Cardmembers also receive an extra 5 percent discount on all Nordstrom Rack purchases every day. For fiscal year 2024, gross profit margin increased partly due to lower loyalty promotions.

Self-service options via e-commerce and mobile application.

The digital platform offers self-service capabilities. For October 2025, the Average Order Value (AOV) on nordstrom.com was estimated between $225-250, with a conversion rate between 1.50-2.00%. Nordstrom employs AI-powered chatbots on its website and app for quick support on inquiries like product availability and order tracking. Nordstrom provides free standard shipping across the U.S. and Puerto Rico with no minimum purchase required for all customers, while Nordy Club members get free 2-day express shipping year-round.

Community engagement through in-store events and styling appointments.

Nordstrom, Inc. focuses on community connection through physical locations and events. The company opened 22 new Nordstrom Rack locations in 2024 and planned to open another 21 Rack locations in 2025, aligning with a national expansion strategy for the off-price banner, which is the largest source of new customers. Nordstrom Local service hubs are being converted into storefronts dedicated to personal styling, such as one subsequent to the fourth quarter-end that will reopen as a personal styling storefront. The brand offers lifestyle workshops for members to learn about styling and trends. Companies that actively seek and act on customer feedback see a 20% higher customer satisfaction rate.

Nordstrom, Inc. (JWN) - Canvas Business Model: Channels

You're mapping out the physical and digital footprint for Nordstrom, Inc. as of the latest reported figures near the end of 2025. Here's the breakdown of how Nordstrom, Inc. gets its products and services to you, grounded in the numbers from the fiscal year ended February 1, 2025.

The channel strategy is clearly bifurcated between the premium full-line experience and the value-focused off-price model, all stitched together by digital access points.

The physical store count as of the fiscal year end on February 1, 2025, shows a slight contraction in the full-line fleet but continued expansion in the off-price segment. The total physical footprint was 377 locations in the U.S..

The digital channels are a significant component of the overall reach. Digital sales were a substantial part of the business for the full fiscal year ended February 1, 2025.

• E-commerce platforms: Nordstrom.com and NordstromRack.com.
• Digital sales represented 36 percent of total sales for the fiscal year.
• Nordstrom.com serves customers in around 100 countries.

The mobile application is integrated into the service ecosystem, supporting shopping and the loyalty program. The company's overall revenue for the fiscal year ending February 1, 2025, was $15.01 Billion USD.

Nordstrom Local hubs are specifically designed to bring services closer to the customer, not to hold inventory. These hubs facilitate key omnichannel functions:

• Online order pickup.
• Personal styling appointments.
• Tailoring and alterations.

The entire interconnected model allows digital sales to be delivered to Nordstrom stores, Nordstrom Rack stores, or Nordstrom Local service hubs for pickup.

Nordstrom, Inc. (JWN) - Canvas Business Model: Customer Segments

You're mapping out the core customer base for Nordstrom, Inc. as of late 2025. The business model clearly targets distinct groups across its two main banners, which is reflected in the sales mix.

Affluent, fashion-conscious consumers seeking premium brands and service.

This segment drives the full-line Nordstrom banner. For fiscal year 2024 (ending February 1, 2025), the Nordstrom banner contributed approximately $9.29 billion in net sales. Full-year comparable sales for the Nordstrom banner increased 3.0 percent. These shoppers prioritize quality and luxury, often falling in the 25 to 54 age range, with a slight skew toward female shoppers.

Value-conscious shoppers looking for brand-name merchandise at a discount.

This group is the engine for Nordstrom Rack. In fiscal year 2024, the off-price segment contributed approximately $5.09 billion in net sales. Nordstrom executives call the Rack banner a growth driver, with full-year comparable sales increasing 4.7 percent for fiscal 2024. The strategy here is to use the Rack banner as the primary gateway for customer acquisition.

Digital-first customers who prioritize convenience and omnichannel flexibility.

Digital remains a significant channel, though its share can fluctuate. For the fiscal year ending February 1, 2025, digital sales represented 36 percent of total sales. However, in the first quarter of 2025, digital sales were 34 percent of total sales, a decrease from 36 percent the prior year. This shows that while digital is crucial, the in-store experience, especially at Rack, is seeing a relative uptick in importance.

Loyal Nordy Club members driving repeat purchases and high lifetime value.

The Nordy Club is central to retaining these high-value customers. Historically, the program boasted more than 10 million unique active rewards members, who spent 4X more and shopped 3X times more than non-members. The program is tiered based on annual spending:

• Member: Spend $0 to $500 per year.
• Insider: Spend $500 to $2,000 per year.
• Influencer: Spend $2,000 to $5,000 per year.
• Icon: Spend $15,000 or more per year.

Cardmembers earn 3 points per dollar spent, while non-cardmembers earn 1 point per dollar. Furthermore, Nordstrom is actively working to grow its private label penetration, which currently sits at about 8 percent of total revenue, with plans to nearly double that figure.

Younger, trend-aware shoppers targeted by the expanding Rack banner.

Nordstrom Rack is explicitly positioned to attract new, often younger, customers, including Millennials, by offering discounted merchandise. The success of this acquisition strategy is evident in the physical footprint expansion. Nordstrom ended the fiscal year with a total of 377 stores, which included 277 Nordstrom Rack stores. The company opened 23 new Rack locations in fiscal year 2024 and is planning 21 new openings in 2025, aiming for nearly 300 Rack stores by the end of 2025. A key metric here is the migration rate: 25 percent of Nordstrom Rack shoppers eventually move to make purchases at the full-line Nordstrom store.

Here's a quick look at the segment sales contribution from fiscal year 2024:

Finance: finalize the Q2 2025 customer acquisition cost breakdown by segment by next Tuesday.

Nordstrom, Inc. (JWN) - Canvas Business Model: Cost Structure

You're looking at the major outlays that keep Nordstrom, Inc.'s dual-banner, omnichannel machine running. Honestly, the cost structure reflects a high-touch service model combined with significant necessary tech spend.

High Selling, General, and Administrative (SG&A) expenses remain a key feature. For the third quarter of fiscal 2024, SG&A expenses represented 36.6% of net sales, driven by factors like higher labor costs and specific technology depreciation charges. Excluding certain non-recurring items in that quarter, adjusted SG&A was 36.2% of net sales.

The commitment to staying competitive means significant investment in supply chain and digital technology infrastructure is a recurring cost. Going forward, capital expenditure requirements are expected to range from 2.5% to 3.5% of net sales, focusing on technology and stores. Furthermore, the VP of Strategic Sourcing and Procurement is responsible for managing over $3.5 billion in annual non-merchandise spend, which directly impacts technology and service delivery models.

Cost of Goods Sold (COGS) reflects the inventory strategy across Nordstrom and Nordstrom Rack. For the fiscal year ending February 1, 2025, digital sales accounted for 36% of total sales. The strategic shift involves reducing the traditional wholesale assortment contribution from 85% down to a target of 50% by increasing drop-shipping and concession models, which alters the COGS profile.

The real estate and operating costs are substantial given the dual-store footprint. For the fiscal year 2024, the total lease cost, net, was $372 million, an increase from $346 million in 2023. Lease terms vary significantly: Nordstrom full-line stores typically have terms of 15 - 30 years, while Nordstrom Rack stores average approximately 10 years. The expansion of the value banner is a cost driver, with plans for 16 new Nordstrom Rack stores in fiscal year 2025.

Labor costs are a major component within SG&A, covering customer service, styling, and general store operations. Higher labor costs were explicitly cited as contributing to the increase in SG&A rate in the fourth quarter of 2024.

Here is a breakdown of key operational cost metrics:

• Q3 2024 SG&A as a percentage of net sales: 36.6%
• FY 2024 Total Lease Cost, net: $372 million
• FY 2024 Digital Sales as a percentage of total sales: 36%
• Planned Capital Expenditures range: 2.5% to 3.5% of net sales
• Annual non-merchandise spend managed by Sourcing: Over $3.5 billion

You can see how the fixed and variable costs stack up in the lease structure:

The inventory cost structure is also evolving, moving away from a heavy reliance on owned inventory:

• Traditional wholesale assortment proportion target: Reduced to 50%
• Drop-shipping and concessions goal: Increase to offset wholesale reduction
• Nordstrom Rack store openings planned for FY 2025: 16

Nordstrom, Inc. (JWN) - Canvas Business Model: Revenue Streams

You're looking at the core ways Nordstrom, Inc. brings in cash as of late 2025. It's a mix of high-end retail, off-price value, and financial services, which is pretty standard for a diversified department store operator.

The total annual revenue for fiscal year 2025 was approximately $15.02 billion. This number is the top-line figure that includes everything coming in the door.

The bulk of this comes from selling merchandise, which is broken down across the two main retail channels. Digital sales, meaning purchases made through Nordstrom.com and the mobile app, represented 36 percent of total sales for the fiscal year.

Here's a breakdown of the major revenue components based on the fiscal year 2025 figures, keeping in mind that the specific split between full-price and Rack retail sales revenue isn't always explicitly separated in the final reported total revenue line item:

Retail sales from the full-price Nordstrom stores and Nordstrom.com form the premium base of the revenue structure. For the fiscal year, the comparable sales growth for the Nordstrom banner was 3.0 percent.

The high-growth Nordstrom Rack segment is a major driver, focusing on off-price value. This segment showed strong momentum, with full-year comparable sales increasing by 4.7 percent for fiscal 2024, indicating its importance in the overall revenue mix.

Financial services, specifically credit card revenue, is a steady, high-margin contributor, which the prompt indicates is approximately 3 percent of total revenue. This revenue stream is generated through interest and fees from the Nordstrom credit card program.

Also feeding into the revenue stream are ancillary services. You see this in the direct customer offerings:

• Revenue from services like alterations and tailoring.
• Revenue generated through styling appointments and personal shopping services.
• Sales from gift card breakage (unredeemed balances).

To be fair, that services revenue number, calculated as the residual at under $10 million, shows that while important for customer loyalty, it's a very small fraction of the overall $15.02 billion in total revenue.

Finance: draft 13-week cash view by Friday.