Rather than stock the same brands that consumers might expect to find at other department stores, Nordstrom has actively sought out partnerships with smaller fashion companies that previously have operated according to a direct-to-consumer model. Many of them might have established short-term pop-up stores and events, or else they relied exclusively on a branded online channel. By bringing these unique assortments into its stores, Nordstrom gains a means to differentiate itself and overcome the apparent ennui exhibited by today’s consumers, who seek something new and different rather than the well-known brand names that predominate in traditional department store settings. Having adopted the strategy only relatively recently, sales of direct-to-consumer brands already account for approximately 40 percent of Nordstrom’s revenues. Moreover, because they are unique offerings, these products do not experience the same vulnerability to competitive discounting; no other store is carrying them. Thus Nordstrom is achieving a profitable, meaningful means to distinguish itself in the market, consumers are gaining access to new and unconventional apparel, and small fashion houses are entering into a new and massive distribution channel.

Source: Matthew Stern, Retail Wire, July 17, 2018