Crate and Barrel sells a lot of furniture. They are now faced with the age old question of how best to get their furniture noticed by their potential customers. In the past, the firm relied on what had always worked for them: still photographs. However, lately that has all changed. The company now has over a million Instagram followers. They also now produce more digital content then they produce photographs. New videos are published on YouTube weekly. What changed at Crate and Barrel?
How Crate and Barrel Turned Things Around
In order to stay current and retain customers, the Crate and Barrel product managers knew that their product development definition had to change. They started with their stores. The product managers have moved to modernize the chain by decluttering their stores. At the same time the company has made a significant investment in social media and associated digital capabilities. Currently the company is spending more than 50% of their media budget on digital media. Furniture in the past has been slow to get online. However, that has all changed now and furniture is seen as being one of the fastest growing online segments.
All of this seems to be paying off for the Crate and Barrel product managers. Comparable sales at Crate and Barrel stores have been increasing over the past two years. These sales rose by almost 8% last year. Crate and Barrel operates 125 stores worldwide. What these product managers have been doing is taking the time to really study their customers. What they want to know is how their customer’s shopping habits have changed. What they were looking for are the customers who have great pride in their homes. Their best customers are almost amateur designers. Crate and Barrel product managers now realize that their customers are always online. They are always on the lookout for design options that they can use. What this means is that Crate and Barrel is now seeking to develop a more inspirational approach to both their media catalog and their website.
In order to better meet the changing needs of their customers, Crate and Barrel has launched design studios in each of their stores. The purpose of these studios is to provide their customers with either an in-home consultation or an in-store consultation. This coupled with the company’s increased investment in digital marketing and social media has to do with their efforts to talk more to content and inspiration. If they can get this right, then the product managers will have something to add to their product manager resume.
Next Steps For Crate and Barrel
Making changes at Crate and Barrel has not been an easy task for the product managers. They have had to change perceptions about just about everything. This has included how they take photographs of products, how they go about designing content about products, and how people believe that their products displays to potential customers. A key part of their success has been finding ways to get their merchant teams more involved in taking a look at the web analytics that have been collected. Their goal has to be to develop a better understanding of what their customers are searching for and how people are looking at Crate and Barrel products from an artistic point-of-view.
Crate and Barrel has already reached a point where 47% of their sales are online. The company expects this number to continue to grow. However, they realize that they may not have as much growth left as apparel retailers who may have an additional 20-30% that they can grow. For Crate and Barrel it is expected that their online sales will top out at 60%. This, of course, brings up the question of how best to use the company’s stores. Currently the thinking is that the stores environments can be made much more experimental. The goal would be to come up with events or product partnerships that can be used to create excitement within their customers.
When it comes to appealing to cost sensitive customers, the Crate and Barrel product manager have some advantages. 95% of the products that Crate and Barrel offers are unique to them. Over the past couple of years, more and more of their customers have been purchasing from their more expensive product lines. The product managers know that when they are able to offer their customers something that they will find to be unique either in quality or in design, then customers will be willing to pay more for it. The product managers understand that they need to remain competitive on the products that they offer that people can find other places. However, they also realize that they have to focus on differentiating their products and rewarding customer loyalty. They really don’t want to have to waste their time trying to out-price somebody else in the market
What All Of This Means For You
The Crate and Barrel product managers understand that they are standing in the middle of a changing market. The impact of this is that their product manager job description tells them that they cannot continue to do things the way that they used to do them. The company is already starting to make changes. They are moving away from using still pictures to try to sell their products and are now investing heavily in digital media and a strong online social media presence.
Currently the company is spending more than 50% of their media budget on digital media. They want to stay on top of the fast growing online furniture market. What the Crate and Barrel product managers want to know is how their customer’s shopping habits have changed. They know that their customers are always online and they want to be able to shape how they view the store and its products. Crate and Barrel has rolled out design studios in each of their stores in order to better help customers to understand what they want and need. In order to make changes, the Crate and Barrel product teams have had to start taking a look at web analytics in order to better understand what their customers are searching for. Crate and Barrel is getting close to maxing out their online sales and so now they have to take a close look at their stores and understand how to best use them. Crate and Barrel offers a lot of unique products so they can keep their prices high.
People who really like their homes shop at Crate and Barrel. They want to create unique decorating schemes and Crate and Barrel has the things that they are looking for. The Crate and Barrel product managers know this and so they are trying to develop an online presence that will allow their potential customers to find them and then shop at their store. We’re going to have to watch these folks carefully to see if their social media efforts are going to pay off!
Question For You: Do you think that the Crate and Barrel product managers should focus on growing their online sales or work on boosting sales at their 125 stores?
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What We’ll Be Talking About Next Time
I suspect that if I asked you to take a moment and feel sorry for the product managers who work for Amazon, you probably would not. For that matter, if I asked you to take a moment and feel bad for the product managers who work for Amazon, you probably would also find that hard to do. However, it turns out that being one of these types of product managers is quite difficult. The reason that it is so hard is because although your company is already very large, you are still under a great deal of pressure to keep growing your product lines. What’s a product manager to do?