ORACLE OPEN WORLD NORDSTROM. October 27th, 2015

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1 ORACLE OPEN WORLD NORDSTROM October 27th, 2015

2 SAFE HARBOR The information in this report is highly confidential and should not be disclosed to persons outside of the Company in order to protect the Company's competitive position. Your copy of this report should be properly handled, should not be copied, and should not be left out in the open where unauthorized individuals could have access to it. In addition, this report contains insider information, and it is a violation of federal law to make use of this "material nonpublic information" in making investment decisions. It is also a violation of federal law for any employee to reveal material nonpublic information to anyone outside of the Company, or to recommend to anyone a transaction in stock of a company about which the employee has material nonpublic information. This practice, known as "tipping", violates federal law, regardless of whether the person providing the information or recommendation derives any benefit from the "tippee's" actions. Please call the Corporate Secretary if you have any questions regarding the Company's Insider Trading Policy.

3 AGENDA 1 Company Overview 5-Min 2 Solution Evolution 5-Min 3 Canada 5-Min 4 US Rack Stores 10-Min 5 Future Phases 5-Min 3

4 COMPANY OVERVIEW Nordstrom Since 1901 Our #1 Goal is to improve customer service Free shipping Free returns Mobile shopping Exciting new retail partnerships We offer a fresh, relevant shopping experience and inspiring style Commitment to happy, loyal customers through product selection and service 121 full-line stores (US, CA & PR) 194 Rack locations 5 Trunk Club clubhouses 2 Jeffrey boutiques 1 clearance store Online in 96 countries through Nordstrom Online in 3 countries through nordstromrack & HauteLook 4

5 OUR STRATEGIC JOURNEY ONE NORDSTROM We have been on a strategic journey to deliver growth expectations and focus on how we link our boxes to bring One Nordstrom to life for our customers Raising our Ambition Building out the Boxes Through Strategic Development Linking the Boxes so Whole > Sum of the Parts Refocus on Growth 2012 Young Customers Manhattan Canada 2011 Build Best-in-Class Offer. Raised top-line goal 33% 2011 Increased store growth 2011 Hautelook 2013 NRack 5

6 SYSTEMS OVER TIME The core of our solutions footprint is a highly integrated and customized RMS9 platform that is no longer scalable or sustainable E-Commerce % of Sales Rack Full Line Stores FLS Merch Perpetual Inventory Multi-Channel Perpetual Inventory Roadmap Rack & Private Label Real Time Inv. Direct to Cons. Buy Online Pick Up In Store Business Initiatives Single View of Inv Sales & Ret. Align Integr. Buy Plan Extended Online Offering / International New Selling Formats / Personalization RMS System Complexity Over Time 6

7 ENTERPRISE FOUNDATION SCOPE 7

8 TECHNOLOGY TO ENABLE FUTURE GROWTH NMG Business Goals Improve Product Relevance Acquire and Migrate Customers Enable Growth Bring One Nordstrom to Life Current Reality System Capacity Highly Customized No system support Org Effectiveness is Compromised Business Growth Constrained Need to Deliver 1 Enable Canada Expansion 2 Sustain Company Growth 3 Support Rack (Off Price) stores as a separate entity 4 Maintain upgrade path & leverage our investment 8

9 HOW WE OPERATE PROGRAM OVERVIEW 6+ year program, replacing current enterprise foundation solutions & delivering new systems with capabilities that are scalable to our company growth 7 9

10 NGEN IMPLEMENTATION PHASES Phase 1: CANADA Phase 2: US RACK STORES Phase 2.1 : Canada Racks Discovery Phase 3: Online Off Price Discovery Phase 4: Canada Full Price Instance Phase 5: Full Price SUSTAIN CURRENT SYSTEMS & CHANGE MANAGEMENT TODAY 10

11 NGEN PHASE 1: CANADA Vancouver Canada Opportunity Benefits & Lessons Learned FY14 Phase 1: Canada Full Price Solution Footprint Merch Foundation (Item, supplier, Purch Order Mgmt.) ON TIME & ON BUDGET Price Mgmt. SIM FY15 Trade Mgmt. (New) Invoice Match (New) Benefits: Small Footprint Greenfield Implementation Core Canada Leadership Business Team Lessons to Carry Forward: Setting fixed end-date forced decision-making rigor agility Obtaining Business buy-in was critical to staying the vanilla path (would not be viable in the next phase) Leveraging Retail Reference Library best practices Onsite go live support increased ability to react to issues Assessing Skills & Capabilities, fill gaps and build teams for the future 11

12 CANADA VANCOUVER 12

13 NGEN IMPLEMENTATION PHASES Phase 1: CANADA Phase 2: US RACK STORES Phase 2.1 : Canada Racks Discovery Phase 3: Online Off Price Discovery Phase 4: Canada Full Price Instance Phase 5: Full Price SUSTAIN CURRENT SYSTEMS & CHANGE MANAGEMENT TODAY 13

14 NGEN PHASE 2: US RACK Off Price Opportunity Benefits of OP First Benefits Removes Off Price volume from RMS9 FY14 H1 FY15 H2 FY16 H1 H2 H1 H2 Allows Off Price to continue to scale at projected rates Key Considerations V14.1 Upgrade 1st Customer on V14.1 & our first RMS upgrade ever By Store Challenges staying vanilla (additional integrations, key functionality & Performance) Store Inventory Management Conversion & Enhancements Store Inventory Management Additional complexities required additional structure and optimized operating models Merchandise Operations Management By Div/Dept. Go Live 14

15 US RACK LESSONS LEARNED & STATS Lessons Learned Stats Resources & Services Program Mgmt. Office (Arch Review Board / Change Control Board) Business & Solution Architecture 109,000 Days of Effort Testing & Platform Architecture Test & Environment Automation Dedicated & Collocated Resources Change Readiness & Service Introduction Size & Scope Complexity Implementation Planning 13,500+ Employees Impacted across 9 business organizations 300+ team members across business & IT (upgrade & initiative) Level of Integration & Interdependency Executive Sponsorship Supporting Organizational Operating Model 40+ Systems & 700+ Interfaces Impacted 200+ SMEs Engaged Champion Change Remove Roadblocks 15

16 NGEN - IMPLEMENTATION PHASES FUTURE Phase 1: CANADA Phase 2: US RACK STORES Phase 2.1 : Canada Racks Discovery Phase 3: Online Off Price Discovery Phase 4: Canada Full Price Instance Phase 5: Full Price SUSTAIN CURRENT SYSTEMS & CHANGE MANAGEMENT TODAY 16

17 Q&A 17

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