How Restoration Hardware Delivered 38 percent Growth in 1Q13 -- By Understanding the Needs of the Affluent Consumers, Pam Danziger of Unity Marketing Reports
Stevens, PA (PRWEB) July 16, 2013 -- Once again Restoration Hardware delivers powerful results to its investors. Last month RH reported first quarter revenues up 38 percent and comp store sales growth of 41 percent. Pam Danziger of research firm Unity Marketing asks why this home furnishings retailer, that started out as a supplier of historically-inspired designed fixtures and furnishings to home remodelers, is having such a great year in this still shaky economy?
"It is because the company really understands who its best customers are – the affluent with discretionary money to invest to improve their home environment," Danziger says. "And Restoration Hardware understands the best way to reach them – with an aspirational marketing approach that combines sophisticated home design with good value and marketed through a seamless multi-channel strategy that includes retail, internet, direct marketing catalog and social media." Next the company is taking aim at two new businesses to reach even further into the home market: RH Kitchen and Tableware and RH Antiquities, which will include a curated collection of kitchen furniture, appliances, lighting, cookware, tools, and food.
While few would think of Restoration Hardware as a luxury brand on the order of Tiffany, Louis Vuitton or Gucci, that is the company that RH aspires to keep. RH recognized long ago that shifting their product offerings toward the high-end was critical to growth in the business. That meant targeting the affluent, luxury-leaning consumers.
The key to Restoration Hardware’s success has been its understanding of the affluent consumer, their needs and desires. This is the kind of information found in Unity Marketing’s proprietary [ Luxury Home Report: The Ultimate Five-Year Guide to the Luxury Consumer Market. It provides details about who’s buying, what home products they are investing in, where they are shopping, how much they are spending, and their favorite places to shop. The report covers all the important home furnishings categories that RH has found such remarkable success in:
• Art and wall décor
• Antiques and collectibles
• Rug, floor coverings
• Furniture
• Lamps and lighting
• Major home appliances and home systems
• Home electronics
• Kitchenware, Cook’s tools
• Tabletop
• Decorative accessories
• Mattresses and bedding
• Linens, pillows and soft goods
The report focuses not on the products, but on the affluent customers with plenty of discretionary money to spend. This is the segment most critically important to the success of home furnishing marketers, like Restoration Hardware. [The Luxury Home Report provides an in-depth view of the buying behavior of the top 20 percent of U.S. households. However, this 20 percent can make or break a home furnishings marketer, because they are responsible for more than 40 percent of total home spending in the home furnishings market, laying out $104 billion out of the total $241.7 billion market.
What makes Unity’s work unique is the scope of coverage across all areas of home, as well as the five-year span that tracks trends in affluent purchase behavior. The affluent consumer segment buys a wide range of products in a broad range of different types of stores, not just ones that target the luxury customer. For example, affluent shoppers frequent a range of stores, from specialty furniture retailers to discounters. Affluent consumers look for bargains, just like everyone else, so the retailer hoping to attract these affluents must understand the balance between value-seeking behavior and willingness to spend.
• Unity Marketing’ [Luxury Home Report is the essential first step to understanding the behavior of affluent home furnishings consumers to drive strategic marketing planning. The results of our research and the accompanying analysis help home marketers and retailers understand the opportunity among the affluent consumers. Take action slides call out specific strategies marketers and retailers can use to attract more luxury consumers to their brands and their businesses.
And if only a specific slice of the home furnishings market is needed, a [Luxury Snapshot Report is available that focuses on only one product category, such as tabletop, linens, mattresses and bedding, major home appliances, and more.
About Pam Danziger and Unity Marketing
Pamela N. Danziger is an internationally recognized expert specializing in consumer insights for marketers targeting the affluent consumer. She is president of Unity Marketing, a marketing consulting firm she founded in 1992. Pam received the Global Luxury Award for top luxury industry achievers presented at the Global Luxury Forum in 2007 by Harper's Bazaar. Luxury Daily named Pam to its list of "Women to Watch in 2013."
Pam's latest book is Putting the Luxe Back in Luxury: How new consumer values are redefining the way we market luxury(Paramount Market Publishing, 2011). Her other books include Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience, published by Kaplan Publishing in October 2006; Let Them Eat Cake: Marketing Luxury to the Masses-as well as the Classes, (Dearborn Trade Publishing, $27, hardcover) and Why People Buy Things They Don't Need: Understanding and Predicting Consumer Behavior (Chicago: Dearborn Trade Publishing, 2004).
Pam Danziger, Unity Marketing Inc., http://www.unitymarketingonline.com, 717.336.1600, [email protected]
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