Nordstrom, a longtime leader in customer service in-store, is learning how expensive a merged channel strategy is. But as it fights its way through new costs, it is illustrating the changing nature of retail itself.

What is the cost of high-touch customer service, also known as pampering shoppers? How much do those little extras return in customer loyalty and higher revenue? Does an additional $10,000 worth of extra customer attention mean that the advertising budget can be dropped $20,000 with no loss in revenue?

Several years ago, I was at a reception at the National Retail Federation show and ran into the CIO for a Fortune 100 chain. I asked him what percentage of his sales were then e-commerce and when he could consider his employer to be a true merged channel retailer. Without a pause, he shot back, “The second answer will be ‘right now’ the instant I am no longer able to answer the first question.”

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