10 Things RH Does That Prove Physical Retailing Works

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At 90,000 square feet and six stories, the new RH Gallery retail location in Manhattan\’s trendy Meatpacking District does more than just dominate the neighborhood landscape. It also dominates the retail landscape as a model for what companies across the entire retailing spectrum need to be doing to stay vibrant, prosperous and above all, relevant to a customer base increasingly picky about where they shop.

The new location – don\’t you dare call it a flagship…much less a store, says CEO Gary Friedman – is the continuation of the company\’s ongoing reinvention and reformation as the leader of the home furnishings pact.

From a $300-million-a-year seller of housewares doodads and stiff mission furniture called Restoration Hardware that never made any money and was a couple of payrolls away from going under, RH has evolved into a role model for retailing. The new Gallery personifies everything RH has been working towards over the past decade. Here are 10 ways it sets the playing field for any retailer faced with the same challenges.

1. If You Build It…You\’d Better Build It Nice

You can see just about every penny of the $50 million RH spent to build the place. Resembling a luxury condominium more than a retail store, it sports premium building materials from its dramatic staircase and its soaring atrium to its glass elevator. If you\’re going to ask somebody to get off their computers and go to a store, it needs to be a quality environment where the customer feels special. And RH delivers in spades.

2. If They Come…Give Them Something Special to Do

A cornerstone of the RH merchandising strategy is to include hospitality along with the furniture. The new RH Gallery features a rooftop restaurant and bar that will probably prove to be one of the toughest reservations in town to get. \”If you give people something to eat and drink, they\’re probably going to stay longer,\” said Freidman, not needing to say they will probably spend more too.

3. If You Sell Elegant Products…Present Them Elegantly

While most stores that sell furniture are endless mazes of confusing vignettes with credenzas lined up like tombstones, RH has a refined visual design plan based on using merchandise displays in mirror-imaged vignettes opposite each other to reinforce the look. This provides a symmetry that is both pleasing to the eye and to the selling possibilities of seeing the same merchandise twice.

4. If You Cater to High-End Customers…Give Them a High-End Experience

RH has a private elevator to allow high-profile customers to navigate the store without getting trapped in small spaces with the common folk. The premium experience extends down to the smallest detail: coat checks carry the RH logo and are printed on premium paper stock. No generic plastic numbers here.

5. If You\’re in a Design Business…Be Serious About Design

RH has segmented its in-house interior design staff into five glassed-in private work spaces off the selling floor. This effectively separates them from floor sales personnel, making their role clearly exalted. It clearly says, \”We design here.\”

6. If You Are Opening a Special Store…Tell the World in a Special Way

The Sunday before the store opened, RH took out a four-page, broadsheet-sized, free-standing advertisement in The New York Times making the announcement. The white-on-black copy opened with \”The Death of Retail\” as the only wording on the first page. The second page continued \”Is Overrated.\” As an attention-getter it more than did the trick.

7. If You Have a Successful Format…Learn How to Layer on Additional Levels

RH is well aware that its design aesthetic, while clear and consistent, may not appeal to all demographic groups. It is why it splintered off the RH Modern sub-brand a few years back and plans additional spinoffs including RH Color and RH Beach House. All are being pursued without muddying up the existing design statement.

8. If You\’re an Omnichannel Retailer…Have a Consistent Merchandising Presentation

Too many retailers struggle with aligning their online presence with what a customer sees when they walk into a physical store. They rarely match up. But at RH they do. The merchandise presentations, the signage, even the typefaces all are consistent and on brand.

9. If You Get a Customer into the Store…Give Them Something to Buy

While the bulk of RH\’s business is in furniture and big-ticket home décor, the new Gallery has a full display of bedding and bath products, as well as candles, soaps and small accessories. Not every customer is going to spend $10,000 on every store visit – and some never will – but there are things to buy and ways to get the shopper engaged with the purchasing process, an oversight many furniture stores make.

10. If You\’re Going to Build a Store That Raises the Bar…Keep Raising It

While this new RH Gallery is the logical progression from the 18 new-format locations that came before it, number 20 is likely to have even more new elements. New York will have the first RH GuestHouse by the spring, which makes you wonder what the next Gallery will have to do to up the bar higher.

And that\’s exactly the way RH wants it.

Warren Shoulberg liked to shop at the old Restoration Hardware but he\’d love to LIVE in the new RH.



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