SWOT Analysis for West Elm
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1 SWOT Analysis for West Elm
2 CONTENTS Why Retail? West Elm Overview West Elm SWOT Summary Resources
3 WHY RETAIL? The retail landscape is undergoing multiple transformations that will provide opportunities for brands to deliver on changing consumer needs. Retail is the fastest-growing category for mobile content Mobile Shoppers: 54% of Smartphone owners use their devices whilst shopping (Nielsen Q3 2011) The challenge for retail is in learning and understanding how existing and potential customers are using technology.
4 WEST ELM OVERVIEW Brand Heritage Williams-Sonoma, Inc History: West Elm was established in 2002 Category: Home Décor, Furnishings & Accessories Positioning: West Elm creates unique, affordable designs for modern living. Competitors: Bed Bath & Beyond, Crate & Barrel, Pier 1 Imports, Target and Restoration Hardware. Consumer Profile: Core: Modern, Affordable, Home Design, Social Media Enthusiasts
5 MERCHANDISING STRATEGY 40 Stores, 22 States, 3 Countries
6 STRENGTHS Net Revenues rose by 6% in 2011 to $867 million, West Elm led the way with 27% increase in same-store sales - Forbes TV & Print Surveys Talent Online & Direct Mail DTP & Artist Collaboration Social Media Inventory & Distribution System
7 STRENGTHS Online sales: enable increased reach, reduce operating costs, and meet the brands diverse needs. Merchandising strategies: strong product portfolio which caters to a middle-class, contemporary consumer of the home furnishing and accessories industries. The brand is located in 22 states across the country. West Elm targets a younger demographic and has the potential to increase brand awareness and loyalty by incorporating multi-platform use and improve brand equity. West Elm possesses a Retail inventory management system online and in-store. Brand Awareness: West Elm s presence on HGTV and in House & Home for example, has exposed the brand to large audiences looking to find design solutions. Talent: West Elm makes an effort to hire people within the field of Interior Design or Architecture.
8 In August 2011, West Elm Emeryville co-hosted a party with Pinterest.
9 WEAKNESSES Customers expect inventory to be transparent between the web and the stores. They complain that specials and exclusives should be consistent across all channels Johnson Nguyen, Full-Time Sales Associate at West Elm Emeryville Inventory Training Website SEM Talent Cluttered Industry
10 WEAKNESSES Competitors: Similar products are available at a lower price points in stores such as Target, Wal-Mart, Pier 1 Imports. The US home furnishings store industry is highly competitive, 50 of the largest companies make up 70% of the industry sales. Inventory management: Items are frequently back-ordered online; this information is usually unknown to sales associates, until they make an online order on behalf of a customer. Items Out of Stock during sales and holidays is common, West Elm needs to invest in methods to recognize its own potential disadvantages and innovate ways to overcome them. Training: Customers have started to detect the sales pitch when introduced to the Credit Card; West Elm misses the opportunity to create more meaningful interactions. Online visibility: Lost opportunities & Low website conversion rates: due to navigation, product availability & shipping costs. Talent: Product knowledge and part-time employees.
11
12 OPPORTUNITIES Gaming: 66% of tablet owners play social games daily, 46% of tablet gamers are women; Largest group is between 35-44, second largest group is between Mashable.com Mobile & TV commerce Social Media (Sign-on) SEM Gaming Training Expansion Design Apps & Digital Catalog
13 OPPORTUNITIES Consumers easily adapt to alternative retail channels, the opportunity lies in providing solutions on relevant devices or within platforms. m-commerce: As shoppers become accustomed to using mobile devices for more shopping-related purposes, they will expect fully featured apps or mobile websites to assist them both in-store and before they get there. Customer Service: Co-creators instead of passive recipients Content Strategy: Create experiences online and embed shopping options throughout the chosen platforms. By providing solutions online, in conjunction with affordable shipping, the limited number of stores can serve as interactive shops, design centers, & galleries Brand Expansion: The first European store will open in Britain early 2012, which will lead to an expanded customer-base and brand recognition
14 Pinterest
15 In 2012, West Elm will experiment with in-store ipad use by the sales staff, in order to better assist our customers Nick Weitzel Manager of West Elm Emeryville, California The online merchandising locator is frequently inaccurate; this results in wasted time searching for products, frustrated sales staff and customers, which eventually leads to missed sales opportunities. - Andrew Evans Stock Manager at West Elm Emeryville, California
16 THREATS In 2011 the retail industry experienced significant gains in holiday sales, however, the housing market was less successful. Economy Shipping Competition Declining perception of quality e-commerce sites Customer Anti service
17 THREATS Online retailers: e-commerce sites are more efficient, because they lack physical locations, and so can offer better prices. Moving online requires new thinking, new management structures, and new strategies. It would also require integrated front and back-end information systems, which can have a tremendous effect on customer service. Economy: There are both positive and negative correlations between consumer confidence and the economic climate. West Elm is in danger of being unable to cope with new channels and new consumer expectations. Browsers: Customers use West Elm as a showroom, where they take advantage of the extensive, well-stocked locations and some of the knowledgeable staff to research products; which they actually buy from other stores such as IKEA or Target.
18 SUMMARY Inability to adapt to emerging media may weaken the brand and allow competitors to gain a larger share of the market. Customer service & training model will need to be revised in order to compliment online and offline strategies. A gamified service for consumer goods, marketing and retention will become as important as social media and e-commerce.
19 RESOURCES Company Websites Social Media Platforms: Twitter, Facebook, Pinterest, Yelp, YouTube WSI Investors: Home Furniture and Houseware Retail: review.com/news/williams-sonoma-plans-first-british-store-in-london Nielsen: Frighetto, Jennifer: 201http://
20 RESOURCES PSFK: The Future of Retail Report preview?player=js Trendwatching: 12 Crucial Consumer Trends for Bloomberg Businessweek:
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