Williams-Sonoma Sharpens Consumer-Direct Marketing
May 7, 2007,
Williams-Sonoma will supercharge its use of database marketing this year in an attempt to take customized, direct-to-consumer appeals to a level "never done before" in retailing.
"Test results are encouraging," Connolly said during the presentation.
When the company sent an e-mail offer to customers who had browsed for a particular item, response was nine times that of typical email offers, he said. When the company targeted an offer to customers who had already bought an item in Pottery Barn's Chesapeake furniture collection, response jumped to 18 times the norm.
"E-commerce will contribute over 25% of our total corporate revenue this year" and will exceed $1 billion, Connolly said. "Over one-third of new customers for our company are acquired through our websites."
For the Pottery Barn brand, the company is refocusing on its price points, looking to add more opening price points to the mix. Sharon McCollam, evp, cfo and coo, said that during the period from 2004-2006, customers were responding to higher price points, which evolved into a broader part of the merchandise mix. "Now we're going back to rebalance" to attract newer customers, she said.
Pottery Barn will also start bringing in special limited-time-only items culled from around the world. "It's the 'wow factor' of Pottery Barn," McCollam said.
In addition, the company is testing lower shipping rates — a factor particularly important in purchase decisions related to furniture and other bulky items. Connolly declined to go into details, but described the rates as "very competitive" and predicted they would be tougher for others to match.
The company's West Elm concept this year will open a super-sized store in downtown Washington, D.C. The store will be 37,700 square feet.; the 22 existing West Elm stores range from 15,000 to 20,000 square feet.
The company will open five West Elm and two Williams-Sonoma Home units this year. The expansion pace is cautious because neither is a mall concept, McCollam explained.
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