Color & Flair vs. Beige & Data
By Jennifer Marks -- Home Textiles Today, 1/28/2008 12:00:00 AM
Just As the subprime and recession chatter began cresting this month, execs from Williams Sonoma Inc. and Urban Outfitters made the stunning prediction that 2008 would be a very good year for them. Not necessarily for profits, but definitely for increasing their share of market — which each believes will set them in a good position when the economy picks up.
Urban Outfitters — parent of the eponymous chain as well as Anthropologie and Free People — took some lumps in late 2006. Assortments had grown too broad and were overloaded on upper price points.
Williams-Sonoma also hit a trough in late 2006/early 2007. Similar story: The mix had shifted too far in favor of big-ticket items at the expense of accessibly priced goods.
Both retailers contend they've sorted out their pricing issues. But their optimism about grabbing market share this year doesn't hang on the pricing grid. Both are staking their opportunities on distinctive market positions and design savvy.
A perusal of their January launches backs them up. Contrary to the maxim that tough times call for neutral palettes (The Great Beige Strategy), both companies' new offerings in home explode with color and pattern across their brand platforms.
To repeat: This is the strategy by which each plans to build market share in a tough economic environment.
That stands in contrast to the talk coming out of most other retailer presentations this month, which religiously invoked "economic headwinds" and inventory control.
Translation: Numbers will lead us ahead.
To that end, here's consultant Liz Tur, who commented on the Williams-Sonoma story: "It is refreshing to hear an upbeat approach to tough trading times … In recent years, so many [retailers] have made the assumption that providing you chase the numbers relentlessly, the flair will take care of itself!"
There's no question that sophisticated data systems have allowed retailers and vendors to make more informed decisions and to respond more readily to sales fluctuations. Williams-Sonoma plans to leverage its propriety database of 43 million this year to identify shoppers who are still spending, then craft tailored offers for them.
But there's no denying that as industry organizations have grown to a previously unimaginable scale so too has the reliance on spreadsheets — to the detriment of merchandising instinct and a level of trust in the customer's readiness to appreciate good product.
Urban Outfitters and Williams-Sonoma are placing their bets on connecting emotionally with the customer. Any other takers?
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