Rack It Up

How Nordstrom Rack Elevated Discount Shopping

Celebrating 50 years of tell-your-friends discounts.

By Zoe Sayler January 18, 2023

A Nordstrom Rack location in Oregon circa 1983.

Follow tangerine-orange carpets to mirrored display cases filled with compacts and lipsticks and bottles of bath oil. Descend a small stairway and round a corner. Here, on a harried array of unattended clothing racks, hang 14,000 garments discounted to at least 50 percent off their original price.

In 1973, Nordstrom calls it the Clothes Rack. “The better a shopper you are and the more time you have to spend shopping, the better buy you’ll get,” store buyer John Thompson told The Seattle Times soon after the department opened in the flagship’s downtown Seattle basement. “The messier it is, the more crowded it gets, the more the customers seem to like it.” For 50 years, that’s held true. 

Over the ensuing half-century, Nordstrom Rack has grown from a single floor in a six-story department store to a brand in its own right, with 249 locations (more than Nordstrom proper by a long shot) and a story to tell about the eternal appeal of the hard-fought deal.

Nordstrom saw the writing on the wall 50 years ago, when it joined an off-price retail boom driven, in part, by...Congress. With the 1975 repeal of state-level fair-trade laws, discounters like Marshalls and Burlington Coat Factory could finally slash prices below a manufacturer-set minimum. According to Harvard Business Review, this left legacy retailers with three options: give in to discounting, double down on tradition, or enter the off-price field themselves. That same year, the first standalone Clothes Rack opened in Bremerton. Soon, economic recession catalyzed the Rack’s continued expansion outside Washington.

Nordstrom had an immediate advantage over many competitors: more than 70 years of rapport with vendors and customers. Soon after opening downtown, the Rack began supplementing Nordstrom’s own discounted products with off-season merchandise purchased directly from designers and manufacturers. Today, much of the Rack’s merchandise comes straight from the department store’s suppliers. Most of the brand names you can find at Nordstrom can also be found at the Rack.

If you know where to look, that is. 

Senior vice president of merchandising Nancy Mair says facilitating the treasure hunt that makes up so much of the appeal plays a large role in how stores are stocked. Spreading high-demand garments across a variety of Rack locations means more “Sport Shoppers”—an actual marketing term—stand a chance at scoring a tell-everyone find. 

The Rack also prioritizes Nordstrom’s signature focus on customer service. “That reputation that has been built by Nordstrom is something that we’re deliberate in making sure that we’re carrying forward,” says Carl Jenkins, another Rack senior vice president. Google reviews tell stories about the tailor who calls about a hotel card left in a pocket, the manager who personally follows up to ensure a return processed correctly, and the fitting room attendants who quietly make trans patrons feel comfortable trying on gender-nonconforming clothing.

Of course, Nordstrom Rack has changed as much as any retailer over the years, launching an online shop and app in 2014; introducing full-price cosmetics for customer convenience; and partnering with Big Brothers Big Sisters to show that “we’re also there in our communities, to help customers that are in need,” Jenkins says.

But despite those shifts, the thrill that drew bargain hunters to Nordstrom Rack half a century ago has remained so unchanged that Nicole Hjorth’s 1970s Seattle Times musings still ring completely true: “It takes some creativity on the part of the shopper,” she writes. But “there is no place like it.” 


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