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How adding stores is good marketing for online sales

How adding stores is good marketing for online sales

Williams-Sonoma chief executive Laura Alber expects the upmarket homeware retailer’s Australian online and catalogue sales to rise after the opening of another four bricks-and-mortar stores next month.

Rather than cannibalising online and catalogue sales, Ms Alber believes the new stores in Melbourne’s ­Chadstone shopping centre will drive Williams-Sonoma’s direct-to-consumer sales by building consumer trust in its brands and the quality of its products.

“What I can’t wait to understand is as we drop the stores in Melbourne, will direct-to-customer sales go up or down, will the stores cannibalise or not?” Ms Alber told The Australian ­Financial Review during a whistle-stop tour of Williams-Sonoma’s Australian ­operations this week.

“The bet I’m making is it will be ­additive [because] that’s what we have always seen and that’s what we’ve already seen here,” she said. “Once you get familiar with us and you start to trust our service and product quality then you will buy more online.”

The retailer’s direct-to-consumer sales represent almost 50 per cent of total sales of $US4.3 billion ($4.9 billion), making the owner of Williams-Sonoma kitchen ware stores and homeware banners West Elm, Pottery Barn and Pottery Barn Kids one of the top 20 online retailers in the US.

Ms Alber says direct-to-consumer sales in Australia are already a major portion of total sales and is confident DTC will eventually reach similar levels to those in the US, giving the company flexibility to compete with rivals by ­discounting or lifting advertising.

“What we’ve seen in America is that online shopping and store growth simultaneous to each other is really a winning combination – they feed on each other,” she said.

Local culture


“We see the same opportunity as we expand globally. But the only way you get that is if you have the trust of the ­customer because they’ve been able to come to your stores and they’ve been able to touch and feel it. It gives them confidence in buying sight unseen other products [online],” she said.

The four new stores in Chadstone will lift the number of Williams-Sonoma stores to 13, making it one of ­Australia’s largest speciality home wares chains less than 18 months after entering the market. It competes with retailers such as Harvey Norman’s Domayne, Myer and David Jones.

Williams-Sonoma identified Australia as an attractive growth market in 2012, based on the strength of online sales from Australian consumers, and opened its first four stores in Bondi Junction in May 2013. It is now using online orders and data analytics to decide where to open more stores and to tweak its range to cater to local tastes.

“One of the things we love about ­Australia and why we came here is because the cultures are so similar – people love their homes, it has the same food and entertaining and gift-giving culture and is family-orientated.” she said. “All those pieces are really good attributes for our brands.”

Williams-Sonoma told investors last year costs associated with global ­expansion had been higher than expected. But Ms Alber, who joined the retailer 19 years ago and took the helm in 2010, says the group has rigorous return hurdles for new investments and is confident the expansion will pay off.

“We have the appetite and the patience to act like entrepreneurs and make good investments but also be more long term than some people are about their business,” she said.

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