Why Nordstrom is expanding its retail media network

Nordstrom is the latest retailer to expand its retail media network, as the sales generated from the advertising strategy continue to grow. On its earnings call today, the department store chain announced its plans to grow Nordstrom Media Network, a division it tested in 2019 and piloted late last year. Nordstrom executives wrote a blog post about the expansion, noting that the network will evolve further in 2022 after generating $40 million in 2021. Pete Nordstrom, president and chief brand officer, said on a call with analysts that he was “pleased with the value [the media network] brought to our customers and partners and we look forward to expanding it.” Get your ticket for the April 5 Ad Age Next: Retail event at AdAge.com/NextRetail. Three years ago, Nordstrom tested running campaigns for brand advertisers on off-site platforms including Google and Meta; last year, the company ran ads on its own channels for hundreds of advertisers. Executives said last year’s revenue from the network exceeded initial expectations. Nordstrom’s on-site channels include sponsored product ads and brand pages, the company noted, while off-site might offer chances to advertise on social media, display, YouTube and search. Like Nordstrom, many retailers have recognized the value their customer data can provide to advertisers looking to run targeted campaigns. The growth of the retail media network was one of the top trends in retail last year, and it shows no signs of slowing down in 2022. Nordstrom competitor Macy’s also has been growing its media network, even as discounter Dollar Tree and home improvement chain Lowe’s ramp up their own offerings. Walmart, which has been growing its own media network, recently revealed it generated $2.1 billion from advertising in 2021. Nordstrom plans to blend brick-and-mortar and digital experiences as part of its offering to advertisers, which includes new ad placements on both Nordstrom.com and discounter NordstromRack.com, according to a spokeswoman. The media network will also help drive in-store engagement and more personalized experiences for its 32 million customers, the company announced. Nordstrom’s internal team partners with software company Criteo on the network, the spokeswoman said. Earlier today, Nordstrom reported fourth-quarter results. Net sales jumped 23% from the year-earlier period to $4.38 billion. Net income was $200 million, up from $33 million a year earlier. Get your ticket for the April 5 Ad Age Next: Retail event at AdAge.com/NextRetail.

Why Nordstrom is expanding its retail media network

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