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My first book report: Restoration Hardware Fall 2011 Source Book

September 14, 2011 by Mark Murray — Director, The Store Channel

Weighing in at 3 lbs. with 616 colorful pages, the Restoration Hardware, Fall 2011 Source Book is the topic of my first posting for Retail Customer Experience. Yes, I'm talking paper pages. It was a tight squeeze in my magazine rack last week. That weekend, it also garnered more of the wife-to-sister-in-law conversation then I would have imagined.

So, as with any respectable book report, allow me to provide author, setting and characters as well as place the story in a historic perspective.  Here goes.

The Author or at least publisher is Gary Friedman, Chairman & Co-CEO.  His passion and commitment to win or lose on a grand scale is the reason we need to take notice.  The reader (or should I say customer) discovers this on Page 1 when Friedman quotes "Teddy" Roosevelt, "our place shall never be with those cold and timid souls who neither know victory nor defeat."

In terms of the Setting, Resto's repositioning story appeared on my radar last September when they launched their fall collection at its redesigned "gallery" store in New York. Back then, it was a 56-page mailer and the mantra of "reinvented, remodeled and reborn." This fall, the idea is a 616-page coffee table book that actually sells coffee tables (and much, much more).

Today, the product-line, style, quality and yes the pricing are all at new, higher levels. The Source Book is more than a catalog in it includes editorial profiles and stunning photos of internationally recognized designers and craftsmen. It hits all the right brand hot buttons of the day - authenticity, quality, commitment and trust. It's believable.

In terms of Historic Perspective, whether Friedman is following his gut or Mickey Drexler at J Crew, the decision to "track up market" plays beautifully to what we now know about the post-recession consumer. The Future Company's 2010 Darwinian Gale suggests the "Recovery Consumer" is one that will be entirely different while having a capacity for dreaming that is as big as ever.  This prophetic report also explains how consumers are re-thinking the definition of value.  Perhaps Restoration Hardware has been burning the midnight oil?  At any rate, it sure sheds light on why weighing down the poor mailman with "Dream Books" for shoppers re-defining value is not such a wasteful idea.

By the way, the arrival of the Source Book took me a little off guard.  I had been reading about Restoration Hardware store closing over the past few years and assumed this was purely economic. I've since learned that along with my 616 page book, an equally detailed distribution strategy includes fewer, yet more vivid brand experiences at brick and mortar stores. Just this June, Restoration Hardware opened a 24,000 square foot location in The Gallery at Beverly Boulevard - a neighborhood where a $2,500 couch is an austerity measure when compared to an interior designer's recommendation.

For me, it's a case of retailers re-defining themselves as they re-define the role of the store as part of a multichannel shopping experience. How many times have we heard about that one? The difference is Friedman is doing it.  At that point, I knew this book is much more interesting to me than furniture.

In terms of "Characters," you meet iPad and iPhone apps to let you "browse, search, zoom, bookmark and shop." Restoration Hardware wants me to dream, shop and buy how ever and whenever I choose.  This takes their shopping experience from the traditional "product that's available" to "shopping that's ubiquitous."  Of course, my marketers' brain chimed in, "… and amortize the digital assets across three platforms."

Beyond the bold strategy, there was a powerful tailwind Friedman enjoyed, and that's private equity ownership - another similarity Resto has to Drexler and J Crew. This translates into not needing to compromise to "make the quarter."  This more entrepreneurial form of ownership is where we'll continue to see the most retail innovation - innovation that can be monetized for more aggressive growth. On September 9th, Restoration Hardware filed with U.S. regulators to raise up to $150 million in an initial public offering of its common stock.
 
So what's my "source book" report summary?

1. The bold acts of authentic, passionate, value focused retailers will be rewarded.
2. Playing to the post-recession consumer is the only enduring strategy (we've moved past "less" and are looking for "better").
3. Being smart about how you execute is admired (by both customers and the industry).
4. Communicating "Accessibility" – (how empowered shoppers can browse, shop and buy - when, where and how they choose) has become paramount to hosting meaningful experiences.
5. Making headway on your transition from price to value requires bigger ideas and much more time than a shareholder with a one-quarter stopwatch.

Finally, in the Source Book, Friedman asks if this bold move puts Restoration Hardware on the "Lunatic Fringe".  After spending more time with the book, apps and a store visit, I think I'm seeing them more on the "Cutting Edge."

And just so you don't think the Restoration Hardware story is a one-off:  IKEA just released a 376 pager for 2012 with the same iPad versions featuring videos, a micro site for blogs and consumer submitted photos and design ideas.  Finally, Google says it will be adding more and more catalogs in the coming months.   The search engine lets you add your own catalog by filling out a simple form.

We'll that's it for now - A retail brand re-defining themselves and how they want you to shop them in a bold and intelligent way.  I promise to get on someone's case in my next posting.  But, I felt it was good to start with an "Up" thing.

Cheers.

About Mark Murray

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