Omnichannel is the path to brand loyalty at Pier 1 Imports.
CEO Alasdair James, who assumed his post on May 1, is confident and focused on that approach, despite some disappointing results thus far in December.
“The first two weeks of December are much weaker than expected,” James said during the company’s third-quarter earnings this week. “We believe this declining performance is due to a combination of factors, but it is internally and externally driven. First, we utilized a promotional program during the first two weeks of December which has simply not been effective in delivering sales uplift. Next, our merchandise is not resonating well enough with the customer to overcome the considerable marketing investments and value driven messaging of our competitors.”
James assessed the key takeaways from the third quarter and the current tone of business reinforced the findings the company’s assessment work in the past five months.
“It is clear to us that our omnichannel is the right platform that will enable Pier 1 Imports to thrive in the future,” James said. “We’re on the right strategic course with the focus areas I remunerated last quarter. Those include, refining our brand positioning to become more relevant to a broader group of consumers while also improving our value proposition, reinventing our marketing programs to support our refreshed brand DNA, improving our supply-chain sourcing and inventory management to help us reduce our cost of goods and drive efficiency, bolstering our IP capabilities, and bringing great automation to the business and finally improving of the effectiveness of our promotional programs while delivering a strong value message.”
For an omnichannel approach, which Pier 1 employs, James believes it’s important to chart a path to more profitable omnichannel sales through offsets to the cost of fulfillment.
“We are moving as quickly as possible to facilitate change,” he said. “First, we’re assembling a best-in-class team, which includes the creation of two new roles we believe are critical to the organization, a head of pricing promotions and a head of global sourcing. Additionally, we have commenced a search for a new marketing chief to replace Eric Hunter, our EVP of Marketing, who is leaving the company next week.”
Over the past few months, James said Hunter and his team have completed a full-blown revamp of the company’s brand position and its messaging is resonating extremely well with home decor shoppers in focus groups.
“Supply chain is another area where we’re moving quickly to do some initial blocking and tackling and lay the groundwork for change,” James added. “We are in progress on steps to optimize our DC space and improve our technology and systems and we're now able to ship products from our distribution centers direct to consumers allowing us to pick up sales and manage our inventory more patiently. On the store front, we’ve been testing three new concepts. It’s early days, but one of our key learnings thus far is that we can drive topline growth while operating with lower levels of inventory. Overall, we see an opportunity to be more efficient with our working capital.”