Crate & Barrel – Full of Ideas

Crate & Barrel – Full of Ideas

Crate & Barrel’s unique style, merchandising and marketing strategies have combined to make this American chain an outstanding success story…

Few, if any, American stores distinguish themselves so dramatically from competitors as does Crate & Barrel, an upscale housewares chain that began with a single store and a single employee more than 40 years ago. Today, the chain operates more than 138 stores in 23 states and the District of Columbia, as well as a very significant mail order business and even a growing internet sales business. Total volume today is more than $1 billion.

This unusual building, located in suburban Chicago, is one of the chain’s newest locations. Furniture is displayed on the second floor, housewares on the ground floor

While it has grown tremendously, it remains true to its founders’ dream of offering consumers uniquely designed – and affordable – products to differentiate itself from other retailers. As its size and overall sales have increased, so has its ability to distinguish itself by its product offerings. Today, many of its products are designed exclusively for the chain. Its buyers travel the world seeking the new, the fresh, the unusual – “the Crate & Barrel look.”

From its beginning, Crate & Barrel’s founders, Gordon and Carole Segal, knew the consumer they wanted to reach – a middle to upper-income family interested in stylish, fashionable, home furnishings. From the start, it catered to this audience with imaginative and stylish presentations, totally different from the traditional gondola runs found in most other stores. It created architectural or home settings for its merchandise, and presented products in ways that would emphasize their shape, form, color and function.

Unusual lighting (with lots of spotlights) call attention to key categories

That presentation technique is constantly being refined and today is truly an art form that assaults the senses with verve and imagination. There probably isn’t a single gondola fixture in any store. Merchandise can be found on wall shelves, crates, boxes and table settings, often highlighted by overhead spotlights. Masses of single colors – blues, reds, oranges, etc – call attention to products and their presentation. Its dominant theme is “style”, so product presentations vary regularly – sometimes just in a different location, other times by being displayed on different types of fixtures. A different presentation will often make the same product appear new and/or different.

Its first store was a tiny 1,700 sq ft unit in the Old Town section of Chicago. It didn’t open a unit on Michigan Avenue’s “magnificent mile” retail street until 1990. Now its stores are elegantly designed, reflecting the topography and style indigenous to each area. Its stores now are 30,000 sq ft or more, sometimes multi-level – either in malls or adjacent to major malls.

Bold colours are emphasized by concentrating colours

For example, its new store in Tyson’s Corner, Virginia, is a combination of washed pine and more contemporary materials. It includes a two-story atrium with natural light warming the displays. Its front combines pickled-wood pine and cedar, concrete masonry and painted metal. The chain now has its own in-house architectural department, which enables it to continue creating its unique interior and exterior “look.” The exterior of a store in suburban Chicago looks like a modernistic office building, not a retail store. Its growing direct mail business embodies this same high degree of innovative presentation. Catalogues are high style, printed on glossy stock, and picturing products with outstanding photography. Product descriptions reflect the same creativity as do store displays, encouraging and enticing consumers by appealing to one’s desire for something new, different and stylish.

Even its web site: reflects the firm’s obsession with style – presenting an organized, clean and uncluttered look. The site is designed for viewer convenience – providing a state-by-state listing of stores or allowing consumers to type in the names of cities or states to find a store location. One can also sign up to receive catalogues regularly, or shop on-line from the latest direct mail catalogue.

Accessories in bold, bright colours are dramatically displayed

For some two decades, the store focused on housewares and gift items, but it has also been selling unusual, distinctive furniture pieces for the last 20 years. As with much of its housewares inventory, furniture is exclusively designed for Crate & Barrel, by its own merchants or exclusive to it from its vendors. A smattering of furniture items is shown on the main sales floor, but the full range of furniture items occupy a separate floor in the multi-floor units. Designs, colors and fabrics are used to create the exclusive furniture fashions.

Its furniture lines shown in the housewares areas, in many cases, require some assembly – sort of an upgraded IKEA look. Occasional tables, desks, side chairs and dining tables. The furniture display floors present the higher end, more formal furniture lines –displayed in room settings – so customers can really visualize how the items will look in their homes. Furniture includes upholstery, dining tables and chairs and bedroom groups. Most items are made in US factories and most are exclusively designed for Crate & Barrel.

A Partial Inventory
A Short List Of Items Sold by Crate & Barrel:
  • Pots, pans, bakeware
  • Bowls
  • Gadgets
  • Cutlery
  • Towels, shower curtains
  • Bath mats
  • Table cloths, placemats
  • Some flatware
  • Dishes
  • Candles, vases
  • Other gift items
  • Pillows
  • Furniture – tables, beds, sofas, etc.
  • Floor and table lamps
  • Fireplace accessories
  • Wine and bar accessories
  • Decorative baskets

As the company grew, it realized a need to set up an efficient distribution system, especially as so many of its items are imported and state-side inventories were needed to replenish store stocks. Its first distribution centre in suburban Naperville, is today a sophisticated one million sq ft complex. It is now serving West Coast stores from a DC in Tracy, California, and the East Coast with a smaller DC in that region. In total, the company now has 2.5 million sq ft of warehousing space. Corporate headquarters are in another suburban location and measure 173,000 sq ft, housing some 400 corporate headquarters staff.

What distinguishes Crate & Barrel from other retailers are two elements – its stylish designs and its presentation flair. Its glassware, for example, is stacked in colorful tiers and start at $1.50 price points. Its target audience is women, who make up 80% of its clientele. Its buyers travel the world, searching out unique products and reliable sources. Increasingly, they arrange to have products made to their specifications so their customers will not find items they buy in mass-market stores. If a vendor will commit to giving Crate & Barrel an exclusive on its own designs, buyers will accept this concept, too.

Lacking money for expensive displays when opening the first store, the Segals nailed pieces of wood from crates onto walls and simply spilled products from the packing crates and barrels in which they arrived. Out of this financially restricted practice, grew today’s continued Crate & Barrel innovative presentations.

What do customers think of the store, its products and its people? Some customers have been known to admit: “It sells endless amounts of things I would like to have, but don’t really need.” Others feel that it sells lots of fun and trendy stuff for the home. Although many items, such as pots and pans, are included most are decorative and often are more expensive than can be found elsewhere. They also are more exclusive and distinctive so become fashionable additions to one’s home or apartment.

Today Crate & Barrel’s web site is a powerful addition to its marketing arsenal. For example, its wedding registries in each store can be supplemented by the web site registry, so out-of-town givers can make selections to be supplied either by a local store or via direct shipments. It notifies buyers acknowledging orders and again when products are shipped. There is also an “outlet” section in which discontinued or marked-down items can be purchased.

By Bob Vereen, Hardware Journal’s US Correspondent