Driving eCommerce: The Case of Restoration Hardware
Like many successful retailers, Restoration Hardware uses a combination of retail stores, a robust e-commerce presence, and a print catalog to drive branding and sales.
In its 10-K filing for investors, Restoration Hardware described its catalogs, which the company describes as "source books," using the following language: "Our source books are one of our primary branding and advertising vehicles," and "a key driver of sales through both our website and retail stores." Nearly half of the furniture retailer's net revenue comes from catalogs and e-commerce sales.
This may explain why Restoration Hardware upped its investment in catalogs from $35.8 million in 2015 to $61.3 million in 2016 according to its own annual filings. Savvy retailers like Restoration Hardware are investing in print because it's a critical component of the retail/e-commerce/direct mail triad that builds their brand and drives their revenues.
With retailers like Restoration Hardware, "It's a whole philosophy with these guys," said Ken Morris, a principal at consulting firm Boston Retail Partners. "Artful images in catalogs might spur someone to visit a gallery to look at furniture and days, or weeks, later customers might place their purchases online."
According to their retail managers, Restoration Hardware only tracks sales geographically, not worrying about whether a lead was generated from e-commerce, a catalog, or a physical trip to a store. Said one retail manager, "The catalog drives trips to the store, the store drives a trip to the web later."
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Sample Restoration Hardware Source Book spread