Dive Brief:
- Nordstrom expects to complete the transition of operations from its fulfillment center in San Bernardino, California, to its West Coast omnichannel center in Riverside, California, during its second fiscal quarter, according to a May 30 earnings call.
- The shift builds on the retailer’s efforts to optimize its supply chain capabilities, which in Q1 resulted in a more than 5% increase in click-to-delivery speed and an improvement in fulfillment costs, according to the call.
- “The West Coast Omnichannel Center is our newest, most automated, and lowest cost fulfillment center,” Nordstrom CEO Erik Nordstrom told analysts. “It has been scaled to serve our customers across the Nordstrom and Nordstrom Rack banners.”
Dive Insight:
Nordstrom announced its decision to relocate operations from its fulfillment center in San Bernardino to its omnichannel center in Riverside during a Q4 2023 earnings call.
The 1-million-square-foot automated warehouse opened in 2020 and fulfills both store and customer orders, according to a July 2023 press release.
The facility is equipped with a pouch system that stores, transports and sorts items; a storage and retrieval system; an algorithm for dynamic routing of orders; and a command center, all of which the company credits for more than doubling volume at the facility.
“I’ll share that we have been scaling capabilities at [the facility] for several years and the facility is well-positioned to serve our customers across Nordstrom and Nordstrom Rack banners following the investments we have made to enable omni-capabilities at the facility,” a Nordstrom spokesperson told sister publication Supply Chain Dive in an email.
In a bid to improve financial performance, Nordstrom has identified supply chain optimization as a top priority. The retailer has made efforts to improve unit flow between suppliers and customers while prioritizing employee retention to improve productivity at its facilities.
Optimization across Nordstrom’s fulfillment and distribution operations builds on the retailer’s moves to streamline its supply chain capabilities, which remains a priority for 2024, Nordstrom’s CEO said during the earnings call.
“We continue to see meaningful improvements in the movement of product throughout our network,” the CEO told analysts. “We are getting merchandise through our network, to our stores and our customers faster, at a lower cost, this helps to drive better outcomes, like higher conversion and lower return rates.”
