June 24, 2024


Fashion Your personal

Crate & Barrel’s new CEO, Janet Hayes, faces retail challenges

“Our business remains very strong, and we’ve seen record demand for our products across categories as people spend more time at home and improve their home offices, kitchens, outdoor spaces and more,” Crate spokeswoman Vicki Lang says in an email. “Janet’s leadership and deep background in home and design have set us up for continued success as we innovate in ways that will excite our new and existing customers.”

Homebound customers with disposable income drove sales at home furnishing stores last year. After dropping off to less than $2 billion in April, sales rebounded to almost $4.8 billion in September, according to data from the U.S. Census Bureau.

Crate & Barrel’s competitors cashed in. Williams Sonoma reported net earnings of almost $372 million for the 39 weeks that ended Nov. 1, a roughly 96 percent increase year over year. Wayfair’s net revenue was up to almost $10.5 million during the first nine months of 2020, from about $6.6 million in 2019.

The focus on the home is expected to continue, according to data consulting firm Accenture. Fifty-seven percent of consumers plan to do most of their socializing from home in the next six months, and many are continuing to move to bigger suburban homes that need decorating.

Still, it is unlikely the staggering sales growth some companies saw last year will be sustained, says Jaime Katz, a senior equity analyst at Morningstar who covers Williams Sonoma and Wayfair.

The trick now for Hayes will be finding ways to continue driving sales, Katz says. To do that, Crate & Barrel must work to generate more money per sale and create lifetime customers.

So, instead of getting a customer to buy a set of a bar stools, convince them to also buy a matching table. Or better yet, update the whole kitchen.

“That’s a more fruitful transaction for a company like Crate & Barrel than like, ‘Hey, we’re having 30 percent off bar stools this weekend,’ ” she says. A one-off purchase like that “is not meaningful enough to change how people think about utilizing the brand.”

Crate is headed in that direction. Its mobile app offers an augmented reality component that lets users see what a piece of furniture might look like in their home.

Crate & Barrel says 60 percent of its website traffic comes from mobile.

The data gleaned from those transactions can be used for product development, merchandising strategy and more, says Laura Gurski, senior managing director of consumer goods at Accenture. Hayes must ensure the company is using its data wisely.

“That will be the difference in their revenue and profitability,” she says. “Those that understand the consumer are going to be in a better place.”