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Alasdair James, who became the new CEO at Pier 1 Imports on May 1, is pleased with the company’s latest fiscal results but knows there is so much more potential that will strengthen brand loyalty.
Despite delivering a comp sales growth of 1.8 percent in the company’s fiscal second quarter, James believes there is considerable room for improvement.
“It is clear that we are not living up to the full potential of our brand and our organizational capabilities,” James said. “We know there is much more opportunity to be captured as we formulate and begin implementing our new operating and growth strategies.”
Pier 1 Imports hired a top-tier consulting firm to help the company analyze opportunities around two key areas: Brand proposition; and operating efficiency opportunities.
“At the end of the day, there needs to be a clear reason why a customer should shop Pier 1,” James said. “We see a clear opportunity to take a well-known and admired brand and advance it in ways to deliver value and drive new growth in a rapidly changing industry.”
For an omnichannel approach, which Pier 1 employs, “it is important to chart a path to more profitable omnichannel sales through offsets to the cost of fulfillment,” James explained. “As we face these challenges and continue our brand consulting work, we’re uncovering opportunities that we believe will deliver significant top and bottom-line growth in the coming years. I say that because I am so encouraged by the brand positioning and operational initiatives that we are identifying. They have real potential to drive substantial incremental revenue and operating margin expansion.”
To meet these objectives, Pier 1 will focus on five key areas:
Refining brand positioning
Bringing new perspectives to its marketing programs
Rethinking supply chain sourcing and inventory management
Bolstering IT systems
Improve value offering and promotional programs.
“We have identified key customer groups who are loyal Pier 1 Imports shoppers,” James said. “Our analysis tells us there is a substantial topline opportunity to firstly grow our share of wallet among them by building upon our core strengths in major categories such as décor and secondly and develop ways to better communicate our offerings and make a bolder statement both online and in-store in those categories where they are under-penetrated.”
The core Pier 1 Imports customer is between 45 and 60 years old.
“We believe there is an opportunity for the brand to appeal to millennials between 30 and 40 years of age,” James added. “This may include new merchandise or brand extension in the future, but initially we believe we can cultivate this audience through increased social media and digital marketing activity. Our research has emphasized the importance of value as a key consideration in our customers’ buying decisions. We believe we can improve our overall value proposition through a combination of enhanced assortments across critical categories and key sourcing initiatives. Once the brand positioning is clear, we’ll be redefining our marketing programs, so that our campaigns better support our brand DNA.”
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