Why Restoration Hardware Is Focused on the Affluents -- And You Should Be Too

Furniture World News Desk on 4/25/2014

More than a decade ago, Restoration Hardware was the go-to source for replications of vintage fixtures and furniture to finish a home remodeling project. And it was going bankrupt in the process.

Today, under the direction of Gary Friedman (who styles himself "chairman, chief executive, creator, and curator"), the quirky vintage aesthetic remains, but it is accompanied by a sharp focus on the style and desires of the affluent consumer and a move upscale, going against the rush toward lower prices adopted by its competitors after the recession. The company's new moniker, a simple "RH," conveys the modern feel and the company's balance sheet shows sales have grown more than 20 percent per year since 2010.

RH's new luxe offerings demand display environments worthy of their prestigious DNA. That is giving rise to new luxury-inspired RH stores with a new Boston location joining the company's five others, called 'Design Galleries.' Massively bigger than traditional RH stores, the new RH Design Galleries offer wine bars, restaurants, performance spaces, courtyards and rooftop gardens, all in the name of transforming shopping at an RH store into an experience. If the new style stores are as successful as planned, the company is slated to replace the existing 62 stores with this new reimagined luxury model.

RH has taken its knowledge of affluents' desires for distinctive items that enhance one's experience of one's home, and they have used this knowledge to spark a dramatic recovery. These same challenges face home luxury brands across the spectrum, and those who do not get the latest intelligence to inform their business strategy may well find themselves riding a dated concept or approach into company decline. Make Unity Marketing your research partner, so that fate doesn't happen to your brand.

In June, Unity Marketing will field a new study that will include a deep dive into home redecorating and remodeling activities among affluents. The survey will ask a sample of 1,250+ affluent consumers (incomes $100,000 and above) about their home-related purchases and plans for future purchases. This study will be conducted with the next wave of Unity Marketing's Affluent Consumer Tracking Study (ACTS).

With this special focus on home-related purchases, home marketers will be able to  join the elite list of Unity Marketing clients who regularly receive updates on trends in affluent consumers' luxury and high-end purchases, including furniture, major appliances, decorative home accessories, mattresses, linens and more. In addition, the ACTS study has been expanded to include a 'Shopper Track' so that home marketers can track affluent's shopping behavior for home goods in regular and luxury department stores, online, in home furnishings specialty stores, luxury boutiques, and appliance specialty shops.

As RH has discovered, the affluent shoppers represent the best prospects for growth in the post-recession environment. For example, in the latest 'Shopper Track' survey, nearly 20 percent of the n=1,436 affluent luxury consumer surveyed (HHI $269.1k average) made purchases with interior designers, architects, contractors for home remodeling or redecorating since January. Further, a majority of affluents shopped in home specialty stores (53 percent) and home improvement stores (64 percent) over the past three months. Think how intelligence about these shoppers active in home can be used strategically to turn your brand from a market follower to a market leader.

The ACTS study offers high-end home marketers and their retailing partners a complete 360-degree look at their customer, their purchases and shopping behavior along with a forward-looking predictor of future behavior in the Luxury Consumption Index (LCI).

Unity Marketing invites Furniture World readers to report what you would like to learn about the changing home luxuries market and today's affluent consumer. Please take our short survey at: https://www.surveymonkey.com/s/C9ZHYFR

The results will be used to design the upcoming survey to be conducted in June 2014.

About Pam Danziger and Unity Marketing: Pamela N. Danziger is an internationally recognized expert specializing in consumer insights for marketers targeting the affluent consumer. She is president of Unity Marketing, a marketing consulting firm she founded in 1992. Pam received the 2007 Global Luxury Award for top luxury industry achievers presented at the Global Luxury Forum by Harper's Bazaar. Luxury Daily named Pam to its list of "Women to Watch in 2013." She is a member of Jim Blasingame: The Small Business Advocate's Brain Trust and a contributing columnist to The Robin Report, a monthly newsletter for senior executives in the retail, fashion, beauty, consumer products and related industries.

Pam gives luxury marketers "All Access" to the mind of the luxury consumer. She uses qualitative and quantitative market research to learn about their brand preferences, shopping habits, and attitudes about their luxury lifestyles, then turns these insights into actionable strategies for marketers to use to reach these high spending consumers.

Pam is a frequent keynote speaker for audiences that need to understand the nuances and distinctives of the affluent consumer segment, including HENRYs (High-Earners-Not-Rich-Yet) and Millennials on the road to affluence.

Pam's latest book is Putting the Luxe Back in Luxury: How new consumer values are redefining the way we market luxury (Paramount Market Publishing, 2011). Her other books include Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience, published by Kaplan Publishing in October 2006; Let Them Eat Cake: Marketing Luxury to the Masses-as well as the Classes, (Dearborn Trade Publishing, $27, hardcover) and Why People Buy Things They Don't Need: Understanding and Predicting Consumer Behavior (Chicago: Dearborn Trade Publishing, 2004).