Pier 1 Changes It Up

By Cecile B. Corral -- Home Textiles Today, 4/11/2005 12:00:00 AM

Forth Worth, Texas —

After a successful recent test run in two major U.S. markets, including Las Vegas, Pier 1 Imports Inc. is moving forward with an initiative to become a multi-channel retailer with the formal launch of a new national catalog in September, the company said during its fourth quarter and year-end call last week.

"We plan to distribute a nationwide catalog to all U.S. markets this fall, and by November our e-commerce site will be fully integrated with the catalogs," said Marvin Girouard, the company's chairman and CEO. "Beginning in November, our customers can shop online, and we can ship orders to homes throughout the continental U.S."

In mid-March, Pier 1 Imports distributed almost 600,000 catalogs to customers and potential customers in six major U.S. markets that are home to a total of 150 Pier 1 units.

"Early direct order activity is encouraging, and stores in test markets are already beginning to show a notable lift in sales compared to other stores in surrounding markets," Girouard said. "Also, the feedback from store personnel is that customers bring catalogs into stores, asking about merchandise as they shop."

Currently, 90 percent of the product featured in the catalog is available in stores. By September, that rate will become 100 percent.

He said if the company can establish that its new catalog does indeed increase customer traffic, “as we expect it will, we can use it as a sales and marketing tool going forward.”

The new catalogs and upgraded Web site are part of a larger remodel effort that was started last month, when the company began executing new major marketing, merchandising and in-store strategies that are expected to be in place at all stores nationwide by the end of this month. They include edited merchandise, reduced clutter, new in-store signage and graphics, and a new point-of-sale system -- the latter which allows associates to look up in real time the status of inventories in all stores and distribution centers.

The company also recently revamped its advertising campaign for this new fiscal year after several unsuccessful runs last year.

It launched the week of March 31 and includes: a newly designed newspaper insert; two 30-second brand positioning TV spots; one 15-second promotional commercial event on TV; a 30-second national radio ad; a newly designed Web site; in store graphics; and new shopping bags and boxes.

Each month, the company will air a new 15-second TV commercial to support its major promotional events for that period.

These advertising changes are being coupled with a related customer research project that began last month. Conducted as a benchmark, Pier 1 surveyed 1,000 people between the ages of 18 and 54.

“The results of this initial data are the baseline for comparison going forward,” Girouard said.

Going forward, Pier 1 has commissioned quarterly surveys to evaluate the impact of its new marketing campaign.

“Our customer research is intended to measure aided and un-aided brand and ad awareness as it progresses through the year,” he said. “We'll also track the perception of Pier 1 stores against competitors and monitor consumer media habits to ensure relative ad plug ins.”

To support growth, Pier 1 has plans of opening a new, 450-000-square-foot distribution center outside Seattle by this time next year. The leased facility translates into a $10 million investment for the company. It will serve about 100 Pier 1 stores in the Pacific Northwest region of the United States and Western Canada.

This new facility will help reduce trucking costs, cut delivery time by three to four days from the one-week it takes for product to arrive at area stores now, and improve customer service.

To its Pier 1 Kids division, which completed its transition in the fourth quarter from Cargo Kids, the company is expecting to ante up its accessories offerings. The company is opening this year four new Pier 1 Kids stores and closing two.

About 85 new Pier 1 stores are scheduled to be opened this year and 25 are scheduled to be closed.