Nordstrom’s High Cost for Online Sales

This strategy, known as omni-channel, is at the center of the retail industry’s efforts to fend off competition from Amazon.com Inc. But it’s a costly tactic to pursue, and increased sales often come at the expense of profits.
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“This business model has a high variable cost structure, driven by fulfillment and marketing costs, in addition to ongoing technology investments.”
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For the full year ending in January, Nordstrom’s e-commerce business made up 20% of revenue, up from 8% five years ago. However, profits fell 17% from a year earlier, to $600 million, as expenses rose 10%. 
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Balancing inventory at physical stores and in distribution centers is also part of the calculation. Nordstrom executives said part of the hundreds of millions of dollars the company invested in technology in recent years has gone toward tools that would help manage inventory.
http://www.wsj.com/articles/nordstroms-high-cost-for-online-sales-1456174730?