Every marketer dreams of having 1-to-1 customer relationships that, ultimately, lead to customer loyalty and brand advocacy. At Pier 1 Imports, knowing its customers is an absolute priority and one that has taken on even greater importance.
Third-quarter results for Pier 1 Imports were disappointing, based largely on decreases in store traffic, CEO Alex Smith said during Wednesday’s earnings conference call.
“One of the more pronounced changes we’ve been observing for several quarters now within our business and throughout the broader retail sector is the decline of casual store visits,” Smith said, according to Seeking Alpha. “At the same time, the home furnishings category has become increasingly price driven. These dynamics are changing the way our teams think, react, strategize, and plan. We’ve invested wisely over the past three years and developed the capabilities that will help us compete effectively as shopping patterns continues to evolve. Our decision to double down on our omni-channel model in fiscal 2015 was absolutely the right one. Our customers are digitally connected, love to shop and want to experience a balance of value and inspiration, both in stores and on our site.”
“Our job is to deliver a great shopping experience through our associates, our products, our marketing and our technology, which we’re doing,” Smith noted. “Our conversion rates, both in store and online, tell us our merchandise assortments are resonating. It also tells us that our associates are doing a good job engaging the customers coming in our door and the continual improvements we're making to the website are benefitting completed orders. Our investment in the mobile redesign last year has translated to substantial increases in traffic demand and conversion, with the most pronounced growth coming from phone versus tablets.”
What’s more, Smith said that the company’s “known customers i.e. those in our database” are shopping more frequently and their spending rates are at an all-time high, and its rewards credit card penetration is stable at around 35% of sales.
“Currently, we know and can talk to customers accounting for over 70% of our sales,” Smith said. “This is a strong number given the size of our store fleet and our current level of ecommerce penetration. Our task at hand is to drive incremental customers to the brand and, most importantly, to our stores and we believe this can be accomplished through a combination of strategic and tactical marketing initiatives. First, our ability to talk to our customers in a more personal way continues to improve. Our new database, which was built from the ground up and is the backbone of the entire program, went live in the third quarter. We’re building on key learnings from our new campaign management tool, which includes versioning our direct mail books and daily emails to ensure that when the Pier 1 Imports brand is in front of her, our messaging is highly relevant.”
Smith said the company has new segmentation tools, which it uses to gain deeper insight into customer behavior and preferences.
“We now have the ability to develop a broader understanding of our customer and where she is in the purchasing cycle,” he explained. “It’s actionable data that will help us increase our number of known customers going forward. Our job is the same as it's always been, to understand our competitors and their positioning, and use this knowledge to help us to become a better version of ourselves, secure in our market position and brand strength.”