How Williams-Sonoma Finds Success in the Digital Age

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Williams-Sonoma continues to move steadfast into the digital age while still having its catalog be its primary driver for sales.

“We’re approaching $5 billion in revenue as a company and we are 50% direct-to-consumer,” said Pat Connolly, chief strategy and business development officer for Williams-Sonoma at the directXchange by NEMOA conference.  “The direct business is a very profitable part of our company; we recorded a 24% operating contribution last year.”

The first thing Williams-Sonoma believes in is product.  Connolly said Williams-Sonoma creates, designs and manufactures 85% to 90% of everything it sells.

“Over a period of years, we’ve developed a global supply chain.  This year we’ll have imported 30,000 containers from 52 countries,” said Connolly.  “By year-end we’ll have 900 associates on the ground in 14 offices directly overseeing our production of what we design and manufacture.”

Connolly said Williams-Sonoma likes to think of itself as very entrepreneurial.  One example he said, is centered on the manufacturing of upholstered furniture.  Five years ago, the company started making upholstered furniture to satisfy demand.

Today the company makes about 70% of its upholstered furniture that they sell.

“We’re now the largest manufacturer of high-quality upholstered furniture in the U.S.,” said Connolly.

Lifestyle merchandising is the next thing Williams-Sonoma believes in.  Connolly said the best way to sell a home product is to show it in the home.  A home a customer could aspire to have and attain with Williams-Sonoma merchandise.

“We have perfected that whole process through our catalog,” said Connolly.  “When the web came along we were ready to project that online as well.”

Williams-Sonoma has believed in multichannel retailing for the last 35 years.  Connolly said this is for the simple reason that people buy from more than one channel especially with home-related goods.

Connolly said Williams-Sonoma believes if you execute multichannel retailing,  the retailer that will be most successful in the next 10 years are those who can be good at more than one channel.

“We still believe in catalogs very heavily, we will mail about a quarter million catalogs this year, which is down from 400 million back in 2007,” said Connolly.

Connolly said that while Williams-Sonoma uses a lot of digital advertising to acquire its customers, the first thing they do when they acquire a customer is mail them a catalog.

“We are finding nothing that can drive the revenue better per contact than a catalog can,” said Connolly.

When it comes to ecommerce excellence, Connolly said Williams-Sonoma’s catalog heritage is in lifestyle merchandising and direct-to-consumer operations, data-driven marketing gave Williams-Sonoma a head start with advantages in critical skills that allowed them to be successful in ecommerce.

“We think we have a 20-year head start and we are trying to maintain that” said Connolly.

Under ecommerce excellence, Williams-Sonoma has focused on marketing effectiveness, personalization of its website, on-site search, and the culture of the company and more.

Social media has become a big area of focus for Williams-Sonoma.   Connolly said Williams-Sonoma believes that it needs to be part of the conversation.

“No one wants to go to a party, where people only talk about themselves,” said Connolly.

Connolly said it is important to engage with fans and followers, increase customers, authority and interest with them.

Connolly said with mobile, everyone is talking about it.  Connolly said that 25% to 30% of Williams-Sonoma’s total orders are coming from mobile; and about 50% of all emails are opened on people’s smartphone.

“There has been an explosion in mobile, but what you may not know is the amount of desktop usage has not declined,” said Connolly.  “Desktop hasn’t gone down and mobile has gone way up.  In the last past three years, the amount of time that people have spent online has doubled.”

Williams-Sonoma has redesigned its mobile website to be as user-friendly as possible.  The website design for the desktop is the same for tablets, as the tablet become the standard desktop for users.

Connolly said social responsibility is a strong trend or phenomenon when people purchase a product.  Customers not only want to know what the price is, or the content of the product, but they want to know where it is made, who made it, were the people who made it compensated fairly and did they have safe working conditions.

“It is always important to be transparent,  in what you’re telling customers, even if it isn’t what you would like results to be,” said Connolly.

 

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