Pottery Barn set to shake up Canadian furniture market

Canada's tattered furniture market is about to be reupholstered....

Canada’s tattered furniture market is about to be reupholstered.

Despite the fact that there are literally thousands of stores in the furniture/appliance category in Canada and several major chains, most peg their marketing strategy on a single message – price.

That’s about to change.

When Pottery Barn moves into the Canadian market this summer, experts say Canadians will be introduced to a furniture chain that blends an up-market retail environment with affordable prices and a trendy, yet traditional product line. And that will have an impact on all players – from department stores to national chains to independents.

‘It’s the Banana Republic of home furnishings,’ says Richard Talbot, president of Markham, Ont.-based retail consultancy Talbot Consultants International. ‘It appeals to the upper- and lower-middle markets. That’s a fairly wide band they’ve succeeded in hitting.’

San Francisco-based Williams-Sonoma plans to open three Pottery Barn stores in Toronto over the next 18 months.

While Pottery Barn is one of the true success stories in the U.S. – direct-to-customer sales increased 34.2% in fiscal 1999 – it has attained these heights despite very little investment in mass media advertising, says Leigh Oshirak, Pottery Barn’s public relations manager. Instead, a healthy chunk of the chain’s consumer awareness can be attributed to its catalogue and Web site.

‘Given that the catalogue has such high circulation (80-million copies in the U.S.), we have a very well-established brand,’ she says. ‘We are not the big advertisers people think we are.’

Occasionally, Pottery Barn buys space in U.S. shelter magazines such as Elle Décor and Home & Garden. And it didn’t hurt that the TV sitcom Friends helped turn Pottery Barn into a household name, when a whole episode was written around its apothecary table.

Interestingly, Pottery Barn’s catalogue will not be distributed in Canada, nor will its Web site be e-commerce enabled here, according to Tracy Brown, a spokesperson for Williams-Sonoma.

According to Brown, the retailer won’t comment on its marketing strategy for Canada, which is still being finalized. Still, Wendy Evans of Toronto-based retail consultancy Evans & Company, says the Pottery Barn name will precede its debut: ‘The buzz that’s built up from having announced its arrival to finally opening will do a pretty good job of marketing the brand.’

The chain’s appealing in-store atmosphere will also draw shoppers, adds Torella. ‘They provide style and good value in an idea-oriented way.’

When visitors walk into Pottery Barn, it’s as if they’ve entered someone’s living space: rooms are set up to reflect a lifestyle. The stores even house a design studio, where customers can sketch out their floor plans, then choose products accordingly.

Dave Glassman, director of marketing for Restoration Hardware, which Torella considers to be Pottery Barn’s closest competitor, agrees that attractive merchandising is vital in the furniture category. Despite facing off against Pottery Barn south of the border, the San Francisco-based banner has grown to more than 100 locations from 11 in 1995. (It has three locations in Canada: one in Vancouver and two in Toronto.)

The company’s five-times-a-year catalogue helps communicate its brand message, he adds. ‘They act as ads. We’re not expecting people to order from them, but they will drive shoppers into stores.’

Like Pottery Barn, Restoration Hardware doesn’t buy TV or radio, but sometimes its ads will pop up in U.S. lifestyle magazines such as House & Garden, Martha Stewart Living and Elle Décor, as well as Canadian newspapers like The Vancouver Sun and The Toronto Star.

While Torella says Restoration Hardware didn’t steal market share from any one company when it entered the Canadian market, he thinks its winning formula does have an overall impact. ‘If you have a great concept like Pottery Barn and Restoration Hardware do, I think you are going to survive and grow,’ he says. ‘The ones that are going to get hurt are the ones at the bottom end, that aren’t building relationships or offering anything unique.’

Indeed, price-driven retailers such as The Brick and Leon’s Furniture have been making moves themselves to heighten their brand profiles.

While their electronics and appliances businesses won’t be affected by Pottery Barn’s arrival, Richard Byers, vice-president of marketing at The Brick, says more than half of his chain’s merchandise constitutes furniture.

Based in Edmonton, The Brick recently went to market with two new television campaigns: one created by Palmer Jarvis DDB in Vancouver, and a national effort called ‘Come On Home to the Brick,’ produced in-house. ‘We’re trying to show that The Brick is contemporary and stylish,’ says Byers.

The PJDDB effort, a series of three darkly ironic spots – including one that shows a man who has collapsed while trying to wrestle a TV from the back of his van – debuted in late October, but Byers says it was pulled shortly thereafter due to poor sales results and negative customer feedback. At the same time, ‘Come Home to The Brick’ saw the retailer’s furniture business record double-digit increases, he says.

Meanwhile, Leon’s, which recorded $483 million in sales in 1999, unveiled an upscale section, The Platinum Gallery, in a Scarborough, Ont., store last year. While national marketing manager Bob MacNelly won’t comment on its performance, he says the chain plans to introduce the concept in other venues. MacNelly says Leon’s isn’t intimidated by Pottery Barn: ‘We’ve been able to withstand The Brick and Sears’ expansion in Ontario,’ he points out.

One criticism leveled at Leon’s is that it fails to advertise its best attributes. ‘The message I still get is ‘Don’t pay a cent,” says Torella. ‘I think they have so much more to tell in terms of selection and value. It’s a missed opportunity.’

For MacNelly’s part, when asked how Leon’s advertising communicates the selection and value message, he says, ‘I’m not necessarily saying it does.’

Which begs the question: Why do Canada’s furniture retailers often produce such price-driven ads? They’ve chosen the lower end of the market, says Evans, and it’s really hard to move up. ‘Could the taste level be a little better? Probably,’ she says. ‘But you have to do a really good job to ensure the image is moving up with your intentions.’

These companies built their business on price, agrees Torella. But with Pottery Barn’s arrival, he says, now is a good time to switch their focus to brand-building.

‘If you’re a commodity, you’re interchangeable.’ When consumers have thousands of choices, he says, you have to give them a reason to choose you.