project rapunzel
ONE: THE RACE TO THE BOTTOM
Project Rapunzel started by the realisation that Griffin had become overly dependent on "big box" retailer (Wal-Mart, Best Buy, and Target) in the consumer electronics realm. These three accounts formed the bulk of our yearly sellthough and despite having a good lineup at all three of these retailers, accompanied by healthy sales numbers, our profits were declining. Every quarter, we had to compete more and more with our traditional competitors for shelf space, as well as being undercut by house-brand and bargain brand goods. It seemed clear that if we continued to rely on these channels so heavily, it would be a race to the bottom and sooner or later the model would lose sustainability.
Our products have become commodities and fighting for shelf space at "big box" retailers has become a zero-sum game. Both our margins and our brand value are eroding. We need to get above this.
TWO: getting above this
I started to think about other channels that might be a good move, both from a sales and branding perspective. I thought about places where our kind of product wasn't being offered, but one where it wasn't such a stretch that we couldn't get our foot in the door. I thought about retailers whose stores offered a more curated shopping experience. I thought about who our current consumer was, an archetype that we referred to as "The cultural creative", and what kind of experiences they sought out. By chance, I wandered into a Crate & Barrel while on a weekend trip to New York City and it all fell into place. This is what we should be shooting for, this is the incremental business that could pay dividends across the board. Easier said than done.
I asked some of our sales associates if they had ever pitched to these kind of retailers and the answer I got is that they had, but that they weren't interested in the products we were currently offering. That made a lot of sense to me; These stores aim for a curated experience, for goods that uniquely speak to their customers and brand. Nothing that Griffin currently offered had that kind of appeal.
Getting Griffin into home furnishings retailers interests me for several reasons:
• It's largely virgin territory. If we can capture it, we can own the segment.
• Consumers at these retailers are less price-driven. It's often more about want than need. We can create that want.
• It will elevate our brand, people will think about Griffin in different terms, even when they see it at Wal-Mart. If we wanted to be able to pitch to retailers like Pottery Barn, Crate & Barrel, Restoration Hardware, West Elm, and Williams Sonoma, we would need to start by learning as much about them as possible. This included how they operate, what kind of customers each of them target, whether any of them already offer any consumer electronics, what their retail strategy is, and insights into the overall health and outlook for the segment. This was a perfect opportunity to enlist Griffin's talented and energetic research team.
THREE: UNDERSTANDING
THE RETAILERS
Our research team spent two weeks working with the I.D. team, helping us put together a more clear picture of the retailers that we were going after. We learned about their structure, how these chains differ and compete with each other, what core values they held most important, how their stores were laid out, what kind of materials and finishes they favored, and how they applied trends to their lineup on a seasonal basis. We visited stores, spoke to salespeople, surreptitiously followed costumers around, combed industry data, and made our determinations.
The research team put their findings into a technical report and our design team put together five profile boards that visualized each retailer in an easy-to-absorb format.
Home furnishings retailers are hungry for innovation, which presents us with a unique opportunity.
2013 Revenue $30.2 Billion
Over the next five years, this number is expected to increase to $34.8 Billion.
Over 25,000 US businesses
Most occupying enclosed shopping malls & suburban strip centers.
A demonstrated interest in CE
More home furnishings retailers are integrating technology into their furniture and accessories.
A desire for exclusive merchandise
Home furnishings retailers seek to set themselves apart from competitors with exclusive partnerships and new products.
A want to expand product offering
Home furnishings retailers are looking for innovative ideas and products to grow sales at existing stores.