Pirch – The “Third Place” For Kitchen and Bath Lovers

pirchWho would have thunk that hanging out in a kitchen and bath appliance store could replicate the Starbucks experience for coffee aficionados and Apple for computer lovers? Well, thunk again. Pirch, as in perching, or sort of feathering your nest in a totally fun and interactive experience, is the reason consumers will flock (pun intended) to Pirch as a “third place” to hang (work, home and Pirch). Just as Starbuck’s and Apple disrupted how coffee and computers were sold and consumed, Pirch is disrupting the appliance world with a fundamentally new and co-created experiential model.

Founded in 2009 on the vision of its CEO, Jeffrey Sears, and Chairman, Jim Stuart, their goal was to make shopping for kitchen and bath appliances “inspirational and joyful.” Originally named Fixtures Living, it was changed to Pirch in 2013, meant to more accurately suggest a perch or nest. “Perching is like feathering your nest, roosting at home. It’s a feel-good name,” said Sears in a PRNewswire article.

Upscale and luxury kitchen and bath appliances and fixtures are spread throughout some 20,000 to 40,000 square feet (depending on location), in a beautifully designed, modern showroom-like store (sleek and inviting like Apple). After being greeted at the door by Pirch’s “baristas of joy” at the Bliss Cafe (hmmm…sounds a little like Starbuck’s), offering a cup of latte, or customized espresso drink from their $10,000 Italian espresso maker, the customer is connected with a trained expert-associate who guides them through vignettes of working kitchens and bathrooms (live cooktops and grills, ovens, refrigerators and working showers, sinks and baths), in which customers can literally experiment with and “test drive” the products.

“Try before you buy” is encouraged by Pirch. Best of class brands are curated from around the world.  Brands such as Fisher & Paykel, Miele, Franke, La Cornue, Toto and Sub-Zero, are all displayed in warm, inviting settings, compelling customers to try them out. Test an aromatherapy shower (privately of course by reservation in what they call the “Sanctuary”), and test the water pressure from various shower heads or soak in a tub carved from Carrara marble. Attend cooking classes where chefs will demonstrate how to operate a $100,000 Molteni range and cook up sumptuous recipes for your tasting delight. Or, cook your own favorite meal. Or, ladies, check out the ladies room, where you can test drive a Kohler toilet with an adjustable seat temperature.

The entire experience is “an endless journey of inspired living. From design ideas to culinary instruction, the PIRCH experience is best described as magical.” And it compels customers to focus on what they want to do, rather than what they want to buy, which makes the ultimate purchase that much more rewarding. Pirch’s expert staff controls and manages the entire holistic process, including delivery, installation and service, as opposed to third parties.

CEO, Jeffrey Sears, was named “Disruptor of the Year” by the NRF (National Retail Federation) and one of the “100 Most Intriguing Entrepreneurs of 2014” by Goldman Sachs. Pirch was awarded “Retail Store of the Year” (2014), by Chain Store Age, was listed 25th in Forbes’ 2015 list of “America’s 100 Most Promising Companies,” was recipient of the 2014 Grand Prize from A.R.E. (Association for Retail Environments), and was included in House Beautiful magazine’s 2014 “Most Amazing” list.

Sears was quoted in a PRNewswire article: “Our company was born from empathy and frustration. We asked, ‘how is it that the very products adorning our homes and serving as backdrops to priceless memories, are presented in such an uninspiring manner?’ So, we decided to do something about that.” He went on to say, “Pirch is delivering a retail experience that encourages guests to dream about, play with, and ultimately choose products that will improve their lives at home. The products we carry are integral to creating inspired moments, and we believe that the process of selecting them should be just as inspiring.”

Pirch showrooms are located in San Diego, Costa Mesa, Glendale and Rancho Mirage California, Dallas Texas, Chicago Illinois and Atlanta Georgia, and its eighth location just opened in the Westfield Garden State Plaza mall in Paramus New Jersey, (next to Gucci, Neiman Marcus and Tiffany), with a store planned for Manhattan’s SoHo in 2016.

CEO Sears states his manifesto as: “One part Passion, One part Conviction, One part Macaroni and Cheese.”

And, guess what?  This business model is not some high-tech, app-driven, sexy Silicon Valley startup, running on fumes and fund-raising.  And it’s not brain surgery. Pirch has simply created a wonderfully designed setting within which it has placed wonderfully designed products, which can be played with and learned about from experts, before deciding to buy.
Indeed, add Pirch to Apple and Starbucks as pioneers in their respective spaces.

A Tale of Two Malls

Paco6Fifty meters off Nanking Road in Shanghai, behind the Apple Store, you still have remnants of the early 20th century city. The alleys are narrow and you can stare into homes lit with cold fluorescent lights. The dirt, the smells, the noise and the life are visceral. Although it isn’t the dark side of the moon, the impulse is not to linger. It isn’t from a sense of danger, but rather the dawning realization that you are an alien – a stranger in a strange land. It’s an unsettling time warp, where in the space of a few dozen paces, the 21st century fades and the 19th century seems just around the corner.

This juxtaposition makes Shanghai an unlikely battleground for modern luxury shopping. Each year, new malls open in a very crowded marketplace with a fresh proposition. The older the mall, the more it gets pushed down-market. Commercial properties are not aging well in a city of 24 million people where construction fever floats on a bloated financial system desperate for just a modest return on their cash.

For jaded shoppers bored with last year’s hot spot, the attraction is no longer about scale, but about the proposition. While it is not quite as simple as the 2013 holiday decorative stars, the 2014 goats continued to try to reinvent the retail thematic proposition. But in a mall where five years ago you had to stand in line to ride the escalators, today it is startlingly vacant. [Read more…]

Beauty’s Buying Blitz: It’s the Early Aughts All Over Again

NYX Cosmetics at Yigal Azrouel Spring 2015 - BackstageIf it weren’t for the massive stack of 2015 promo calendars clogging our mailbox (thank you, Triple-A Termite Control and Super Shiny Carwash!), we’d bet our bottom dollar it was 2000 all over again.

At least this seems to be the case for the beauty business, which is currently on an acquisition spree, the likes of which we’ve not seen since the go-go early Aughts.

But before we dive into any serious tea-leaf reading, let’s recap the M&A landscape of the past year.

Acquisitions on Steroids

In 2014, L’Oréal Group snapped up a whopping six brands: three that are primarily skincare (Magic Holdings International, Decléor, Carita); two in hair (Niely Cosméticos, Carol’s Daughter); and one in makeup (NYX Cosmetics).

The Estée Lauder Companies, while less acquisitive, nonetheless swooped in with three third-quarter purchases, adding two fragrance brands to its portfolio (Le Labo and Editions de Parfums Frédéric Malle) and one in skincare, Rodin Olio Lusso. [Read more…]

What Can Luxury Brands like Louis Vuitton Learn from Lego?

legoImportant Lessons, It Turns Out

Fast Company just published an interesting story about Lego and its Future Lab, titled “How Lego Became the Apple of Toys.” Before the recession, Lego was in serious trouble. Fast Company sets the stage:

“About a decade ago, it looked like Lego might not have much of a future at all. In 2003, the company — based in a tiny Danish village called Billund and owned by the same family that founded it before World War II — was on the verge of bankruptcy, with problems lurking within like tree rot. Faced with growing competition from video games and the Internet, and plagued by an internal fear that Lego was perceived as old-fashioned, the company had been making a series of errors.”

What Lego Did Wrong & How Lego Made It Right

[Read more…]

Luxury A 2014 Recap and 2015 Outlook

luxrecapIt isn’t only consumer product goods companies targeted at the middle class that fared poorly in 2014. Regardless of what the confidence readings or the employment indicators say, shoppers around the world have exercised restraint for a number of years and have not returned to their free-spending ways of the late 90s and early 2000s.

Blame it on exogenous factors ranging from the Crimean crisis and the sanctions imposed on wealthy Russians; the tightening of anticorruption measures in China, creating a reluctance among the Chinese to be seen as ostentatious spenders; or the street demonstrations in Hong Kong. There are also real macro financial factors as well, including Japan entering a recession in Q4 2014; weakening trends in Europe as the year progressed; and the continued consumer malaise in the US. When the numbers are finally tallied, 2014 will have been a year of very modest (if any) growth in the global personal luxury goods sector. [Read more…]

The New Luxury Consumer? Think: Multiple Consumers

atk_luxuryThe luxury industry may have lost a bit of its luster lately:  in 2014, Prada’s third-quarter profits sunk 44%; LVMH sales growth has slowed down; and analysts downgraded their recommendations for some listed companies.
There are several reasons for this. First, weak economic performance in parts of Europe and Asia is deflating consumer demand in those areas. Second, societal shifts, including a crackdown on corruption gift giving in China and last year’s protests in Hong Kong, are stealing some of the industry’s cache. At the same time, a lack of truly innovative products has failed to energize consumers.

But there is a big and most important reason:  the luxury consumer base has changed. It’s not your grandmother’s luxury market today, which brings tremendous growth opportunity for the luxury brands that can evolve with the changing face of affluence and market to these new customers based on their individual needs. [Read more…]

Tory Burch. Doing Almost Everything Right

tory_burch_2About a dozen years ago, sitting in her blue and white David Hicks and Billy Baldwin design-inspired kitchen in her 6000-square-foot Pierre Hotel co-op overlooking Central Park, Tory Burch set about to create an affordable clothing line that she and her friends would like to wear. By this time, Tory Burch was already something of a socialite and had appeared in the pages of Vogue and on the cover of Town & Country. Not entirely to the manor born, but close enough, Tory, a graduate of the University of Pennsylvania, had worked in the fashion industry, not in design, but in advertising and public relations. Perhaps this is where she learned about marketing and branding, or perhaps she just has very good instincts.

The first Tory Burch boutique opened in 2004 on Elizabeth Street in Manhattan’s Nolita, now a fashionable retail stretch, but a somewhat more pioneering location at the time. With a $2 million dollar investment from then-husband Chris Burch and additional funds from friends and family, the store launched with multiple categories of clothing and accessories. In 2005, Oprah Winfrey discovered a Tory Burch tunic and pronounced it the next big thing. With Oprah’s endorsement, a unique fashion point of view that struck a chord with a certain crowd in Manhattan in its early days and some good exposure on Gossip Girl, fashion history was made. [Read more…]

Canada Goose – Keep Warm, Be Cool

gooseLike most New Yorkers I made it through last winter’s Polar Vortex with many layers and ‘Hot Hands’ in my pockets, but going into this season, I knew I had to replace my very well worn 10-year-old Bogner and 12-year-old Moncler down jackets. I asked a friend, younger and hipper than I, what she recommended. “Canada Goose” she said, “cheaper and cooler than Moncler.” I’d never heard of Canada Goose, but, once aware, the red white and blue Canada Goose expedition patch logos were suddenly everywhere in New York City. The parkas are more function than fashion, many trimmed with coyote fur around the hood. PETA has objected, but celebrities, including Matt Damon, Daniel Craig and Claire Danes have been photographed in theirs. Last season, Canada Goose was featured in the US Magazine “Who Wore it Best” section. Was it Lucy Liu, Cameron Diaz, Maggie Gyllenhaal or Emma Stone? Kate Upton wore a white Canada Goose parka over a white bikini bottom on the cover of the 2013 Sports Illustrated Swimsuit issue. Photographed in Antarctica, the headline reads, “Kate Upton Goes Polar Bare.” [Read more…]

A Holiday Fable

‘Twas the day after Christmas, when all through the mall,
Every shopping creature was stirring in a big free-for-all.

The sale banners were hung in the windows with twine,
In hopes that black ink would show up on the bottom line.
The merchants were hunkered down like well-tailored elves,
West Coast dock slowdowns having bared all their shelves.

Warren_saleCheap gasoline gave the season a boost,
Proving to be many a retailer’s surprise golden goose.
Walmart trotted out Kelly & Michael clones in their TV attack,
Having decided the entire season could now be called Black.

Target did its usual mix of cheap and chic kerfuffle,
Trying to forget the ghosts of breaches and Steinhafel.
Macy’s ran a record number of one-day sales with flair,
Doing enough business to never muss up Terry’s hair.

Sears and Kmart were largely invisible,
Eddie’s vision rapidly becoming a sinking dirigible.
Mike Jeffries & Dov Charney were two December casualties,
Undone by H&M, Zara & all the other fast-fashion casual Ts.

Radio Shack watched as the clock wound down tic by tic,
It couldn’t be saved by a bizarrely retro Weird Al Yankovic.
Kohl’s tried kash and koupons in every denomination,
Making sense of them caused customer consternation.

And Amazon finally opened an in-town warehouse sorter,
Promising deliveries even before a shopper places the order.
Best Buy had all its consumer electronics at the ready,
Hoping not to go the way of Circuit City and Crazy Eddie.

Luxury brands kept their stores all orderly and neat,
Waiting for those big bonuses to come in from Wall Street.
JCPenney was still suffering from its Ron Johnson hangover,
Though the trouble was still too much merchandise holdover.

But no matter the channel, the site or the store,
The customer would only respond to more and more.
Now 10 percent off, 20 or even 30,
It took 40 or 50 for shoppers to get down and dirty.

In fact, only one store was sale-less and unflappable,
It bore the image of a fruit, of course, it was Apple.
So the endless sales and promos from very far to quite near,
Promised to stretch through well into the New Year.

It’s just how business is done in retailing these days,
Sadly, executives and customers are no longer fazed.
And longing for the good old days is just a wasted gesture,
Trying to do it any other way is meaningless conjecture.

So as the season ends and the stores turn out the light,
We wish you Happy New Year, it was one hell of a fight.

Where Has All the Luxury Gone?

Coach StoreWe in the industry have been bandying about the term “luxury” pretty freely of late, but there is growing realization that if a product or brand is easily accessible and relatively inexpensive, it’s not really a “luxury” product. And the minute you add the term “affordable,” it becomes an oxymoron.

As the ever-widening income inequality gap illustrates, the rich are still getting richer. According to Pew Research, the top 1% of households in the US, or those making $400K or more annually, earn 23% of the total income in the country, and control 35% of the net worth. Both figures have been steadily growing for more than a decade.

One ever-present behavior in the spending habits of the superrich of any generation is opting for the special over the mundane. Makers of high-end jewelry and electronics, cars, exotic vacation hotels, and other products and services target this group of discerning consumers for a reason: They value, and are willing to pay a steep premium for, that which is appreciated by and accessible to only an elite few.

Milton Pedraza, CEO of The Luxury Institute, a research firm that tracks and advises the global luxury goods market, says that consumers consistently define luxury as the best of design, quality, craftsmanship, and service. Brands that always deliver against these attributes, including Audemars Piguet, Chanel, and Buccellati, also tend to have a compelling brand heritage story. [Read more…]

Sleepless Nights

mattress isolated on the whiteI am not sure about where you live, but around here in southeastern Pennsylvania, it seems like wherever I drive, I am never far away from a mattress store, and a discount one at that.

It makes me wonder how these stores can keep their lights on. Can there really be that many people in this community of half a million that, give or take, need a new bed? I don’t have the answer for the mushrooming growth of retail banks, but do I understand Americans have been buying mattresses in record numbers making the mattress category the fastest growing segment in the $164.4 billion home furnishings business in 2012, according to HFN’s State of the Industry report. In 2013, the mattress segment posted slower but still good growth to reach $9.4 billion.

Mattress Madness

Obviously Americans are sleeping better—or at least investing in record numbers in better beds. And with recent double-digit growth in the category, mattress retailers are trying to squeeze every bit of spring out of the mattress business. Sleepy’s tops out at over 900 stores, and 1800Mattress.com gives ‘showrooming’ mattress shoppers access to deep discounts for most of the leading brands. The leading television channels and even Walmart are getting in on retailing beds. [Read more…]

Are You Trapped in the Past?

shutterstock_176490206Think you are a Retail Guru? Student of the Industry? Current or former Master or Mistress of the Universe? Or have you just been around the business for at least 25 years? Well, wherever you were in 1989, were you capable of foreseeing what retail would be like in 2014? Some of you who were part of the industry in 1964 may in fact still be alive and kicking. If you are a member of that rarified group, did you envision then any of the changes that have occurred in our industry over these past 50 years?

Change is a concept that most of us say we understand and readily embrace. Yet, in reality, we have little or no capacity to conceive of, plan in support of, or manage change.

Past as Prelude

In 1964, retail was principally focused on downtown business districts in either overlarge emporium like local department stores and/or mega-catalog houses. Downtown specialty retail was invariably local. Few, if any, shopping malls existed; there were no strip or power centers, and no big box players or discounters of any consequence. Local city-based Woolworth’s and Woolworth-like stores that blanketed downtowns were more the norm throughout the country. Technology then was embodied by mechanical cash registers in the front of the house and manual comptometers and handwritten ledgers in the back room. [Read more…]