Williams-Sonoma CEO Laura Alber is confident about her company and its ability to grow substantially, while attracting more customers and drawing more brand loyalty.
During the company’s March 16 fourth quarter earnings call, Alber discussed Williams-Sonoma’s strategic direction.
“We see the opportunities to do business differently,” Alber said, according to Seeking Alpha. “We have identified four key strategies that will drive improvements across the organization. We are confident that between our growth opportunities and these strategies we will double our revenues over the next 10 years.”
Alber then outlined the strategic focus.
“First, we’ll reserve our product leadership,” she said. “Going back to the first phase of Chuck Williams' store in Sonoma, we have been a leader and innovator in building differentiated and market leading product assortments. Our goal is to ensure our product serve a distinct purpose by being differentiated from our competitors through our price quality relationship, design aesthetic, and functionality. We have developed a best-in-class vertically integrated sourcing network, to remind you our direct sourcing advantage separates us from conventional retailers, and online market places in our category.”
Alber added: “We can also monitor every aspect of social compliance from fair wages and working conditions and factories to the use of toxin-free raw materials. And we eliminate layers of cost from agent commissions to vendor and distributor markups. This allows us to deliver outstanding quality to great value while advancing social consciousness in the communities in which we operate. From artisan education to sustainability, free trade to hand-crafted, we believe that doing business the right way creates the greatest long-term enterprise value.
“In addition, we are now focusing our efforts on developing and buying fewer more differentiated products that better leverage this network across all of our brands. We believe that our long-term sustainable success on both the top and bottom lines will be built on a foundation of product quality, innovation, and value.
“Second, we are revolutionizing our approach to inventory. We have a significant opportunity to improve customer service and reduce cost by advancing our inventory management practices. In 2015, we experienced supply chain challenges related to the West Coast port disruptions that resulted in increased cost and lower service levels. As we worked through resolutions it became clear to us that we have an opportunity to reduce cost through more aggressive inventory management. Our goal is to lead the market in the delivery of furniture and home furnishing.”
This year the company is planning for inventory growth lower than sales growth for the year.
“There are two key components to this plan,” Alber said. “First, we have begun implementation of a new inventory optimization system that advances our slew level demand forecasting and gives our teams more sophisticated tools to replenish our regionalizing distribution network and stores. And second, we are eliminating less productive skews, which allows us to have better in stocks and improve order fulfillment. We see this as a significant opportunity and our entire team is aligned around this initiative.”
Given the brand’s current growth trajectory, entry into the commercial furniture market with West Elm workspace, and international growth positions it to become a $2 billion brand, Alber asserted.
“We are rapidly expanding our global reach through existing and new franchise relationships and other opportunities such as the John Lewis shop-in-shop model,” she added.