Editor's note: RH’s turnaround pays off
The stock price of RH, or Restoration Hardware, shot up about 40% in one day in mid-June, the result of pretty good earnings and a forecast that is simply incredible for the upscale and not-inexpensive furniture retailer. Wall Street gurus, many of whom have been bashing retail for nearly a decade now, did a quick 180-degree turn, praised the chain and talked about its bright future. Funny what some good news will do.
So much for retail being dead. As is becoming more and more clear these days, those retailers who take the right steps to invigorate their business model are doing quite well, thank you. Heck, even Macy’s, given up for dead just months ago and viewed as the ultimate dinosaur in the industry, is being talked about as a new model for traditional brick-and-mortar as the chain reinvents itself into a destination shop.
In the age of Amazon and the digital revolution, how is this all possible? The answer, of course, is that the sky is not falling for traditional retail as long as merchants understand what is necessary to attract consumers into their stores.
[caption id="attachment_581830" align="alignright" width="127"] Seth Mendelson[/caption]
Let’s be perfectly clear once again. Bad retail and bad retailers are most definitely in trouble. Those merchants who do not want to make the investment in their companies, because they either do not have the financial wherewithal, have no vision or do not want to take the risk, are in jeopardy of not surviving. Those who do not think they need to offer consumers a combination of competitive pricing, great assortment and a great experience will quickly enter the fabled retail graveyard, where the list of occupants is growing longer and longer by the year.
RH Design Gallery, among others, is showing us what it takes to be good merchants. The chain has developed a strong rapport with its customers, has quality products and backs it all with superior in-store service. Yes, you pay more, but, in the end, you definitely get what you pay for.
Other retailers are catching on too. Many are finding their niche — whether it is focused on price, convenience, expertise or something else — and are making the right marketing moves to make consumers aware that they remain an option for their shopping needs.
The question, of course, is will the rest of the industry catch on to this to ensure its survival? Are they ready to compete in the current retail arena, a world where the rules have changed dramatically and where offering the basics are no longer enough?
Some are — and they have taken the steps to stay ahead of the curve. It may be a good time to take a page from their playbooks.
So much for retail being dead. As is becoming more and more clear these days, those retailers who take the right steps to invigorate their business model are doing quite well, thank you. Heck, even Macy’s, given up for dead just months ago and viewed as the ultimate dinosaur in the industry, is being talked about as a new model for traditional brick-and-mortar as the chain reinvents itself into a destination shop.
In the age of Amazon and the digital revolution, how is this all possible? The answer, of course, is that the sky is not falling for traditional retail as long as merchants understand what is necessary to attract consumers into their stores.
[caption id="attachment_581830" align="alignright" width="127"] Seth Mendelson[/caption]
Let’s be perfectly clear once again. Bad retail and bad retailers are most definitely in trouble. Those merchants who do not want to make the investment in their companies, because they either do not have the financial wherewithal, have no vision or do not want to take the risk, are in jeopardy of not surviving. Those who do not think they need to offer consumers a combination of competitive pricing, great assortment and a great experience will quickly enter the fabled retail graveyard, where the list of occupants is growing longer and longer by the year.
RH Design Gallery, among others, is showing us what it takes to be good merchants. The chain has developed a strong rapport with its customers, has quality products and backs it all with superior in-store service. Yes, you pay more, but, in the end, you definitely get what you pay for.
Other retailers are catching on too. Many are finding their niche — whether it is focused on price, convenience, expertise or something else — and are making the right marketing moves to make consumers aware that they remain an option for their shopping needs.
The question, of course, is will the rest of the industry catch on to this to ensure its survival? Are they ready to compete in the current retail arena, a world where the rules have changed dramatically and where offering the basics are no longer enough?
Some are — and they have taken the steps to stay ahead of the curve. It may be a good time to take a page from their playbooks.