Furniture titans face off with multichannel tactics despite housing crisis
Pottery Barn distributes 140 million catalogs a year; Crate & Barrel catalogs are available online
190 stores in 44 states
Established in 1949
Crate & Barrel
92 stores in 27 states
Established in 1962
Because of the housing crisis, it's been a challenging couple of years for home-furnishings retailers such as Pottery Barn and Crate & Barrel. However, business is looking up, particularly online. Pottery Barn's parent company, Williams-Sonoma, reported online revenue of $1.1 billion for 2010, an increase of 26.9% versus 2009 (the results include Pottery Barn, Pottery Barn Kids and PBteen). Its nearest competitor, privately held Crate & Barrel, achieved online sales last year of $365 million, a 16.2% bump, according to Internet Retailer's Top 500 Guide.
Still more growth is forecast for the category. Forrester Research expects online sales of housewares, small appliances and furniture in the US to reach $17.7 billion this year, up from $12.3 billion in 2007 and averaging out to around 11% growth per year.
Pottery Barn has created a multichannel strategy built around its popular catalog business, which many experts credit with helping to define the brand as sophisticated and upscale.
"If they stop mailing catalogs, their Web traffic and Internet orders are slow," says Matt Nemer, managing director of equity research at Wells Fargo Securities. "The catalog is really the catalyst that gets someone to go to the Pottery Barn website and place an order."
Pottery Barn distributes around 140 million print copies of its catalog every year, in addition to distributing them online. Crate and Barrel also offers a number of catalogs (offered online or in print), including its "Best Buys," as well as seasonal editions in specific categories such as lighting, dining and media and storage. Crate and Barrel, which is privately held, does not disclose its catalog count, but Nemer says "it is a much, much smaller number."
While Crate & Barrel can't compete with Pottery Barn's formidable direct marketing heritage, online has proved the great equalizer. When it comes to marketing online, Crate & Barrel is doing about as good a job as — and in some cases, a better job than — its larger rival, say those who follow the companies.
Retail marketing experts give both brands high marks when it comes to communicating their unique positioning online.
"Crate & Barrel has always been good about having a very clean and simple e-commerce site, one that mirrors its stores," says Patti Freeman Evans, VP and research director for e-business and cha-nnel strategy professionals at Forrester Research. "Pottery Barn portrays content in a way that helps enrich people's experience of doing things such as making a particular recipe, which is in keeping with its catalog content."
Crate & Barrel has the edge when it comes to the e-commerce experience, says Bruce Henderson, chief creative officer of G2 North America, a brand activation agency based in New York. "They do a good job of offering really easy ways for the shopper to engage with the brand."
For starters, Crate & Barrel distinguishes itself by seeking and publishing customer product reviews and ratings.
"I admire brands willing to post reviews on their own sites," Henderson says. "User reviews are where the Web is at today, and I think in terms of not only being current, it also conveys openness that consumers value." He also applauds the site's live chat feature.
Neither San Francisco-based Pottery Barn nor Northbrook, Ill.-based Crate & Barrel responded to queries for this article.