The smart strategy at the heart of Nordstrom’s loyalty program

Nordstrom’s The Nordy Club loyalty program is wildly popular – and I mean WILDLY.

The US department store giant reported that, in 2024, a huge 70% of purchases came from members of the program, while 90% of top-tier ‘Icons’ shopped its anniversary sale in 2023.

The program is hugely popular – but is it helping the brand? Not always. The brand said in 2024 that losses were worse than expected because Nordstrom card-holders accumulated more points than expected.

There have been various tweaks made to The Nordy Club over the years, so let’s explore how it’s currently balancing its value proposition and its profits.

So, how does the program work – and what can we learn from it?

1. Simplicity is king when earning points and rewards

Membership of The Nordy Club allows customers to collect points on purchases, which can be redeemed for discount rewards in $10 and $20 increments (Nordstrom Notes). 

They can be earned online or in-store, and spent at Nordstrom or Nordstrom Rack, its outlet. This is vital: 79% of consumers say it’s important to be able to use their loyalty program memberships in-store, according to our research.

You can earn more points for shopping certain collections – namely, the brand’s beauty section. Plus, top members get double points at various points – more on that later.

It’s a simple approach to earning points – important for such a complex brand, with its shopping, dining, spa, outlet and credit card (the list goes on). It’s also simple to join: just enrol online or in-store and share your mobile number.

Spotlight on: Collection-based points multipliers

Triple points on all beauty purchases? Don’t mind if we do!

Beauty Perks are a key feature of the program, regularly changing to keep things fresh. One thing’s clear; the loyalty program strategically nudges customers towards shopping this particular range. It’s one of the most underrated benefits of a loyalty program.

What we can learn from this:

Loyalty programs can support not only repeat purchases but WHAT’S purchased. It’s perfect if you’re trying to launch a new range, have overstocked, or any other commercial rationale.

Simply set up a points modifier on a specific collection or product, for a limited time frame.

The offer of earning more points can nudge customers to those products – and gives you a fantastic campaign too. With your CRM integration, why not shine a light on this offer and watch the orders come in from your loyal customers? 

2. Great VIP Tiers that compel repeat purchasing

Ascend through the VIP Tiers – from Member, to Influencer, to Ambassador, to Icon, based on your yearly spend. Each one unlocks strong rewards – a great motivator to spend more. 

• Members receive beauty perks (see below) and free 2-day shipping on Nordstrom. At Nordstrom Rack, they get birthday perks, new arrivals notifications, and early access to Clear the Rack, their clearance sale.

• Influencers unlock personal double points days – on a day of your choosing – and your annual number of these days rises as you ascend the tiers. 

• Ambassadors get invites to exclusive events – a smart move, given over half of consumers say invitations to exclusive in-store events motivate them to enroll in a loyalty program. Plus, Ambassadors get access to Nordstrom to You: a free, at-home appointment with a Nordstrom stylist once a year. 

• Icons receive a huge number of perks including unlimited free alterations, Icon-only events, unlimited free alterations, and access to premium, 24-hour dedicated customer care. 

Spotlight on: Dedicated customer care

It may have originated in the world of hotels and department stores, but concierge services are fast becoming a key differentiator in some of the best loyalty programs.

It’s all based on the huge value of convenience and trust. Staff time is at a premium today, so Nordstrom’s loyalty program reserves unlimited care and attention from their staff for only its top customers.

What we can learn from this: 

Give a personal touch to your most dedicated customers, and lock in their loyalty for life. Plus, they’ll become your biggest advocates: de facto influencers, if you like.

Shopify brands like Rat & Boa do just that, offering Level 4 members a concierge service to help with outfits for events, specific sizing assistance, and anything else they need. Check out their fully story to see how it works.

3. Credit card tie-in helps the loyalty program further boost commercials

Want even better loyalty perks, instantly? All you need to do is get a Nordstrom credit card.

It’s a diversified revenue channel for the brand, gives them more customer data – and is a great way to further deepen loyalty. That’s why the Nordstrom loyalty program is entwined with its credit card offering: the company wants to richly reward customers that use the Card:

• Customers earn points in more ways: 2 points per dollar spent on dining, groceries, gas, EV charging and streaming services purchases using the Card.

• They also receive better perks, too. They instantly get Influencer status, and early access to the legendary Nordstrom Anniversary Sale. Icon status is a cardmember only tier – hence the huge number of benefits.

Spotlight on: Deeper perks for deeper commitment

Tying their credit card with loyalty is a smart move from Nordstrom’s loyalty program. 

Convince a customer to make a longstanding commitment to your brand, reserve only the best benefits for them, and you’ve got an incredibly reliable, long-term source of revenue.

What we can learn from this:

Most Shopify brands don’t have a credit card – but many DO want to incentivize customers to sign up for a subscription to lock in long-term retention revenue.

Tying your loyalty program to your subscription strategy makes that deeper commitment to regular purchasing more compelling – and makes it more difficult to give up. In fact, over three-quarters of consumers consider specific subscriber benefits an important loyalty program benefit. (You hear that ‘Subscribe and Save’?) 

Your brand’s approach doesn’t need to be a subscriber-only tier like Nordstrom’s:

• Members could automatically unlock an existing tier’s perks

• Or simply receive points for signing up to a subscription. It’s what customers want: 57% of shoppers would subscribe to a product to earn loyalty points.

Lots of LoyaltyLion customers including waterdrop and Amora Coffee use our integration with Recharge to make that happen quickly and easily. 

What would our experts suggest?

1. Run point multiplier events at the statistically optimal time

The Nordy Club allows customers to choose their own double points day – but are they missing the opportunity to increase their revenue from retained customers by doing this?

The brand could benefit more if they themselves determined the best occasion to nudge more repeat purchases – such as during a quiet period.

AI can uncover the best moment for a points multiplier event in this way, ensuring brands aren’t giving customers double points when they might have shopped anyway. 

LoyaltyLion AI already does this thinking for lots of Shopify brands, and helps them launch the campaign in the click of a button. The results are undeniable: revenue from members doubles when AI Campaigns are running.

2. The points-to-reward ratio could be more generous

Most customers would need to spend $1000 to get enough points for a $10 reward – that’s a ratio of 100:1. This is a lot lower than our experts recommend: a ratio of 20:1 is a more effective value exchange to compel repeat purchases.

Understandably, Nordstrom is trying to manage the success of their program by making points multipliers a benefit for higher tiers. But to get customers into the habit of earning and redeeming, thus increasing their lifetime value, more generosity at an earlier stage could be worth testing.