What the Failure of Pirch Says About Experiential Retailing
Failure of Pirch

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When it first opened and spread its stores across major metropolitan areas around the country, Pirch was the talk of all retailing. A well-designed, interactive shopping environment, it was the poster child for what came to be known as experiential retailing. It was going to take over the entire industry before not too long. The failure of Pirch is now the talk of the retail world, and the conversation is about what its demise means for the industry’s future. Pirch was the future of retail…until it wasn’t.

Pirch joins a list of once-promising retailers like Home Depot Expo, Sears Great Indoors, Showfield’s, and Incredible Universe (from Radio Shack) that tried to explode the shopping experience into a … well, experience, with a huge scale and overpowering product presentation. All are long gone.

The Birth of Pirch

It all seemed so exciting back in 2009 when the company opened its first retail store – they liked to call it a showroom – featuring kitchen and bath plumbing fixtures, major appliances, and all kinds of related products. Many of the sinks, tubs, and showers had real running water and shoppers could make appointments to use them after hours, though we’re not sure how many actually did.

The presentation was elegant, exciting and – back before the word became obnoxious and overused – “immersive.” Pretty quickly Pirch got new funding from private equity – of course, it’s what startups do. And with Catterton’s money, it expanded to ten locations, including on the east coast in the Noho/Bowery neighborhood of Manhattan and at the Garden State Plaza shopping center in that retail mecca of Paramus, NJ. Its high-profile launches even included the late rent-a-celebrity iconoclast Iris Apfel posting a picture of herself on Pinterest in a suds-filled tub.

I saw these locations (but not Iris), though I never got to any of the amazingly handsome California stores. They were also located in highly-priced retail spaces, and in retrospect, maybe too highly-priced for what was being sold.

Falling Off Its Perch

Maybe a year later, maybe a little bit more, Pirch suddenly pulled back, closing everything but six locations in Southern California which it continued to operate until last month’s closing announcement. At first, Pirch put up the good front saying it wasn’t going away. On its website in March it posted:  “As of Wednesday, March 20th, Pirch is temporarily closing all our showrooms through this weekend. This is a pause of business to give management the opportunity to complete a go-forward plan. We are navigating through various options. We take this situation very seriously and are working diligently to resolve it. We appreciate your patience while we work to find a path forward. We intend to share the go-forward plans sometime next week.”

Of course, that next week has come and went and finally in mid-April Pirch filed for chapter 7 liquidation, a complete shutdown of its entire business. Well, almost complete because we are now entering the legal portion of the story. The Orange County Register newspaper reported in late March that Pirch was being sued by two of its landlords for $850,000 in back rent. It also said that high-end appliance brand Sub-Zero was suing it for $4.22 million in unpaid invoices. And more recently have come reports that American Express wants its money too, to the tune of $33 million…which is a lot of charge card slips.

Pirch Post-Mortem?

What went wrong? Certainly, those leases had to be killers and hard to justify. When Pirch made a sale, it was a big one, $50,000 or more for a new kitchen or a couple of bathrooms. But how many of those sales did it actually make? The stores featured very little in the way of take-with merchandise that a walk-in shopper in these high-traffic areas could buy, perhaps just to come away with something impulsive or as a way to get started with a longer-term, larger relationship with Pirch. We obviously never saw its cost structure or SG&A but one has to think it was an expensive place to run. Immersiveness only goes so far.

So, Pirch joins a list of once-promising retailers like Home Depot Expo, Sears Great Indoors, Showfield’s, and Incredible Universe (from Radio Shack) that tried to explode the shopping experience into a…well, experience, with a huge scale and overpowering product presentation. All are long gone.

As such, they are poster children for lessons on being careful about jumping onto the next latest, greatest thing in retail. Retailers have tried on everything from smaller scales with interactive devices like smart dressing room mirrors and informational kiosks to these full-tilt-boogie stores-as-amusement-parks. Very few of them seem to have worked…in fact, it’s hard to pick one that has.

It’s why all this latest brouhaha about AI and what it can do for the physical shopping experience has to be taken in stride. Shoppers are not going to don bulky headgear to walk around virtually in actual stores. That’s just not going to happen. The Star Trek Holodeck remains several retail lifetimes away no matter how fast the technology evolves.

Retail will eventually discover which in-store technologies actually work, just as they are finally figuring out how to sell online. But it’s going to take some time. In the meanwhile, the in-person shopping process is still going to be very similar to what it’s been for generations. Not quite business as usual…but certainly nothing close to business as unusual either

Full disclosure: when I first saw Pirch I was beyond excited and really thought it would work. I was wrong. So was Pirch.



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