Dive Brief:
- Nordstrom is making structural changes to its technology organization that will result in an undisclosed number of layoffs, according to a GeekWire story, which attributed the information to a memo written by Nordstrom CTO Edmond Mesrobian.
- Meanwhile, senior vice presidents of technology Travis McElfresh and Magali Muratore are both leaving Nordstrom. The departures were described as unrelated to the broader reorganization and they "made the decision to pursue personal and professional opportunities outside of the company," according to a Nordstrom spokesperson in an email to CIO Dive.
- Nordstrom is seeking to realign staff "around specific domains and align them against our biggest priorities," the memo stated, according to GeekWire.
Dive Insight:
Mesrobian was named CTO of Nordstrom last summer, after the retailer had gone more than 18 months without anyone in that role. About a year ago, before Mesrobian's arrival, the company acquired two retail technology start-ups and had been investing in a variety of technology endeavors.
The technology group's structural changes have come to light less than a week after Nordstrom reported a fourth quarter sales decline, along with more proof that its off-price brand is performing better than its flagship operation.
Nordstrom co-president Erik Nordstrom told a Shoptalk audience that, while the retailer is moving in the right direction, it is moving too slowly.
"As part of our efforts to continually evolve to serve our customers, we are making changes to how our technology team is structured," said the spokesperson. "As part of these changes, some technology employees will be taking on new roles."
In the memo, Mesrobian reportedly also touched on the need to deliver better experiences for customers, as well as using artificial intelligence to drive decision making for the company. Changes to the retailer's supply chain were also discussed in order to optimize buying online, pickup in-store services and fulfillment goals.
In its Q4 2018 earnings call, CFO Anne Bramman said the retailer plans to dedicate half of its $900 million of investments to technology and supply chain. Digital capabilities will play a crucial role in the company's technological transformation and inventory processes.
"Inventory is our biggest near-term lever of profitability," said Bramman, the retailer is focusing on "generational investments" and digital solutions, like improving data analytics for merchandise levels and allocation.
Nordstrom expects between "$150 million to $200 million of expense savings in ongoing productivity gains in our digital capabilities," said Bramman.
Given a new organizational structure and new priorities for its technology group, the sector may find out in the months ahead if this is the key to speeding up Nordstrom's progress.
