Pier 1 Looks to Change Corporate Image
September 19, 2005,
Fort Worth, Texas — Looking to inform customers that it's “not just a place to buy wicker anymore or just to buy candles,” Pier 1 is entering the fall season and looking ahead to the coming year with a new attitude that emphasizes furniture and contemporary looks, said chairman and CEO Marvin J. Girouard during the retailer's second quarter conference call last week.
“Our mix is cleaner than it's been in maybe two years. We had become very comparable to other basic furniture retailers, and that, looking in hindsight, was a mistake.”
New merchandise introductions for this fall will be “obvious,” Girouard said, “with a dramatic transition of color and newness in dinnerware and glassware, decorative accessories, candles, gifts and holiday décor.” This shift comes on the heels of the store's editing effort in the spring when it reduced the sku count in each unit by more than 20 percent and discontinued and replaced six of its nine bedroom furniture collections.
Come January, more merchandise changes will include contemporary collections and new spring assortments “our customers have requested,” he continued.
And the sku count will be further reduced to about 2,800 for next spring, “to ensure the customers can see the unique and exclusive elements, especially furniture,” Girouard said.
The retailer's advertising focus has shifted to catalogs and television commercials to drive traffic and better reach its target customers.
Earlier this month, Pier 1 distributed an 84-page catalog to more than three million customers throughout North America, nationwide and in Canada.
Girouard described the pages as filled with ideas, lifestyle photos and residential settings “to show customers how our products might look in their homes. We know customers use catalogs to formulate decorating ideas and to plan social gatherings for special occasions, and we believe catalogs will stay in customers' homes longer than other print media and direct mail pieces.”
This week, all Pier 1 stores will receive another one million copies of the fall catalog. The merchandise in the catalog is available to purchase in stores, and 90 percent of the merchandise is in stock. The fall catalog includes more than 500 items, which represent only 15 percent of Pier 1's total store assortment.
The next catalog is for the holiday selling season and will be mailed out to customers in early November. This will coincide with the launch of Pier 1's fully integrated ecommerce site, with the online catalog available through www.pier1.com. For the first time, customers will have ability to buy the retailer's complete line of furniture and other merchandise.
For TV, Pier 1 is developing new commercials that will begin airing in early October.
The changes Pier 1 is making and has planned for next year are part of its “evolution,” Girouard said, to regain its place in the increasingly competitive retail landscape. Using its newly developed quarterly consumer research study, the company learned it is facing several key market challenges. “Mass retailers and various warehouse stores are offering a broad range of products and selections that have changed the competitive environment,” Girouard said. “Customers who shop at mass retailers are enticed into buying items that are good enough or product substitutes based on shopping convenience and sometimes lower pricing.”
The study also indicated that on the other side of the spectrum, more expensive, high-end specialty retail stores offer a wider selection of better quality merchandise.
“The research suggests that Pier 1 customers perceive out stores as a great place to find an accessory item or small furniture accent piece, but may not think to shop Pier 1 to decorate or furnish an entire room, which they easily could do,” Girouard said.
With its new merchandising and advertising initiatives, Pier 1 hopes to “reclaim our place in the home furnishings sector, take back market share and return to our core competencies that made us successful,” he continued.
In related news, Pier 1 will open 35 new units in the next three months.