How Nordstrom inspires you to buy more online and how they stay ahead of the game

Picture this: you choose a fashion product online and the retailer shows you other items to go with it. Not the “people-who-bought-who-also-bought-this” type of suggestion, but one made in consideration of the fashion and occasion of the product you have purchased. For example, if you buy a formal dress, it will pair appropriately with accessories such as jewelry or shoes. If you buy shorts, it goes with sneakers or t-shirts.

Well you don’t have to imagine it, you just have to go to Nordstrom

.com where they do it. A paper written by Brian Burns, head of data science and analytics at Nordstrom, explains how the artificial intelligence program they call The Outfitter selects products that match what you’ve already selected. A study by artificial intelligence firm Findmine, which provides product matching services for businesses that don’t do it themselves, shows that Nordstrom covers 87% of its eligible products with The Outfitter’s recommendations. (Disclosure: I am an investor in Findmine.)

I asked Nordstrom how long it took and how much it cost to create The Outfitter. They won’t say it, but I’m told it took years and the cost was probably in the millions. Small wonder, then, that the data indicates that Nordstrom’s competitors offer comparable recommendations only a fraction of the time, with JC Penney at less than 12% and Macy’s

at 10.5%. I asked JC Penney and Macy’s why their numbers were so low. Both declined to comment.

If there’s one person who’s never asked, “What am I wearing with this?” I will be very surprised. So the idea of ​​using artificial intelligence to answer the question doesn’t seem like a great idea. But the expense and time involved in creating it is probably daunting for many retailers; it’s easy to imagine why they don’t.

And it’s never over. The nature of artificial intelligence is that it is always learning, improving and iterating (called ‘machine learning’), so the expense of its development never stops and it is scary for retailers. And while I have to commend Nordstrom for investing the time and money, they’re not perfect either. According to the study, more than 3% of the items recommended by La Pourvoirie are out of stock. There is no doubt that current supply chain issues are contributing to the problem and 3% is not a large number, but recommending a product that is out of stock puts the consumer through a process that is a big deal and seems must be repairable. But artificial intelligence is not native to retail; combining AI with retail, where “gut” is what has driven the industry for generations, is a process, not a product.

Artificial intelligence offers many opportunities for retailers, both in a customer-centric way like The Outfitter and behind the scenes that can help stores become more efficient and operationally profitable. Creating improvements through artificial intelligence is fundamentally different from traditional retailing. To make the change and adapt, leadership must be involved, it is far too risky for managers to assume it without the cover of the highest leaders. When leadership is not involved, the best you can hope for is a half-baked effort. Artificial intelligence becomes a problem when your competition is using it and not. It’s a way for Nordstrom to be ahead and everyone is catching up.