While you’ve been out shopping until you drop and maxing out your Amex all weekend, you may have missed these fascinating developments in the world of home furnishings retailing.
Nothing overly game-changing, but some newsworthy occurrences nonetheless that have the potential to shake things up a little bit.
1. Ikea Redirects Its Focus To Urban Retailing
Long the bastion of “if you build it big enough they will come, regardless of how bad a location it is” the Swedish retailer said last week it was redirecting its merchandising and store-siting strategy to more urban locations. Reasoning that newer generations may not trek out to the suburbs for their home furnishings shopping, Ikea said it will open more, smaller-scale locations in cities since that’s where most people are gravitating towards these days.
This is a rather remarkable about-face for a retailer that has always thought of itself as a destination, one worth schlepping to. The ongoing transformation will involve some serious personnel shifts but not necessarily wholesale store closings.
As perhaps the most successful international retailer on the planet, it also points a direction for businesses around the world that are trying to figure out their physical store strategies.
2. Hay Opens First U.S. Store
Another visitor from Scandinavia, Hay is a relatively new Danish-based home goods company that operates both wholesale and retail businesses. This month it opened its first American store in Portland, Oregon, which is an appropriate cultural fit for the clean design, earthy aesthetic that Hay espouses.
Think of Hay as a slightly upscale Ikea, with products across the home spectrum from furniture to pens to tableware. As such it is similar to Muji, the Japanese brand that has also staked out this space, and while there’s little mistaking its geographic origins, Hay is more design and less utilitarian than its Japanese cousin.
More importantly, it is another brand that has decided a totally vertical model may be the key to its success. Hay does sell through the Museum of Modern Art shop but clearly it sees its future with its own stores.
3. J.Crew Gets Into Home
Even as its president departed earlier this month, seemingly a victim of a difference of strategic opinion with the company’s private equity-dominated board, it has tiptoed into the home business with a modest offering of soft and hard product. The goods are under both its own brand as well as third-party suppliers such as Snowe, Coyuchi and Native Union. Throws, decorative pillows and other home textiles appear to be the main thrust of the introduction but there are also tech items and tabletop products.
Its entrance into home shouldn’t come as a great shock since J.Crew’s now-departed CEO was Jim Brett who came from West Elm, where he made that brand one of the best retailers in the home space.
Whether J.Crew Home will be anything more than a one-off with Brett gone remains to be seen but it once again affirms the trend of fashion retailers – Zara and H&M for instance – testing the home waters. Not a new trend by the way: The Gap once owned Pottery Barn.
4. Bed Bath & Beyond Advertises
Ordinarily the news that a large national retailer was placing ads – particularly during the Black Weekend period – is not particularly startling. But in the case, maybe it is.
Newspapers in at least some markets – Atlanta for one – included a free-standing circular from Bed Bath, which has almost exclusively restricted its promotional activities to direct mail up until now.
This is not to say this is the first time it has ever done this – unfortunately, subscribing to every newspaper in the country is not an option and BBB is notoriously silent on its marketing strategy – but this could mark a departure for the retailer, which has been losing market share for years.
BBB still clung to its 20% off/$5 off messaging online, which, at this point, is almost an embarrassment in a period when shoppers won’t even turn on their smartphone unless the sale is at least 25% or $25 off regular prices.
As we go through the rest of the holiday shopping season, we’ll have to see if this represents a true change of strategy or just an isolated test for a retailer that is increasingly trying just about anything and everything to change its woeful status quo.
No doubt some other home-related retailing news slipped between the cracks of Thanksgiving dinner – and its all-consuming aftermath – but these at least caught my attention.
Let the leftovers continue.
Date: November 29, 2018