The Home That Fashion Built
In June, Target announced a revamped product strategy with a focus on private labels in two main categories: fashion and home. Its plans to breathe new life into its apparel offerings made a lot of sense. It has become increasingly difficult for them to compete with the market pressures faced from fast fashion, Amazon, and a plethora of off-price and discount retailers, yet its style chops have been reinforced by the runaway success of many of its designer collaborations. But its decision to put extra focus into their home category really piqued our attention. Despite there being plenty of players in the domestic space for home goods, including Wayfair, Overstock, IKEA, and yes, Amazon, Target acknowledged that home, with the right strategy, offers them important inroads with their core customers. In fact, if you’ve been paying attention to this space, you’ve noticed that in the United States, fast fashion brands including Zara and H&M, have been slowly but surely introducing their home offerings to the market. So pull up that Eames lounger, and let’s talk about the home furnishings market for a second.
There are few words more powerful than ‘home.’ Whatever the individual sensory response elicited, home brands know that there’s nothing more personal that that which gets to take up residence inside one’s abode. (Hey, Mom and Dad’s hand-me-down recliner has likely featured in more memories than you might be giving it credit for.) But in all seriousness, where do home brands fit into the lifestyles of today’s changing consumers? If younger generations aren’t as likely to live in spaces that are outsized for their needs or even buy a home at all, is this even an attractive corner of the market to occupy? The operative word here is ‘lifestyle.’ The opportunity for a home brand to gain increased relevance in consumers’ lives is through different types of experiential touchpoints and partnerships and to have a ‘grow with the consumer’ approach. Let’s examine each of these avenues separately.
No matter where in the world you call home, we’d bet that your local coffee shop has made no small amount of effort to make its decor look like somewhere, well, someone like you would want to hang out. It’s not just the coffee and overpriced avocado toast they’re serving up, it’s the ambiance that just feels right. But let’s see this scenario from the side of the home brand. This ‘third place’ is now such a major part of consumers' lives, these brands would be remiss if they didn’t pay close attention to how people socialize, work, and generally pass time in these types of venues. As a home brand, if items like the ones you’re selling are helping to make cool people feel cool in their cool space, then why couldn’t you somehow reverse-engineer this so that your brand gets to be front and center in this type of environment? Indeed, if you’ve been tracking headlines like West Elm and Restoration Hardware opening up hotels, then you’re definitely catching the drift here. It’s about finding the right partnerships, whether that is hospitality, fashion, or health and beauty brands, but they must reflect a shared ethos, and more importantly, target a similar consumer base.
Let’s shift gears and talk about this notion of 'growing with your consumer.' Can you remember your first IKEA experience? (We’re really hoping that it didn’t involve a significant other because we’ve heard the stories about how that turns out.) You likely shopped there to outfit your first apartment or home, and it was perfect for your needs at the time. But as you grew up and perhaps acquired a family or a bigger budget along the way, your expectations changed. You wanted something durable, more permanent, and more reflecting of where you were in life. In fact, IKEA’s mastery of democratic design for the home has also been one of its challenges to customer retention. What works at one stage, may not always make sense later down the line. So how does a home brand, especially as its offering can require significant financial expenditure on behalf of the consumer, protect itself against customer attrition over time? Well, IKEA has made major efforts in small goods like Textiles, Decor, and Cooking Tools for the home, items which not only take up less real estate (throughout the supply chain), but they also have a higher rate of purchase. You’re not buying a new couch every year, but you are likely to pick up a new set of glassware or towels at a higher frequency. And this is precisely what we’ve seen fast fashion brands do in their entry to the home market. They have, for the time being, limited their offerings largely to decor, and with virtual and in-store adjacencies to their fashion offerings, seamlessly brought home goods into the fold. It’s also worth mentioning that home offerings targeted towards children have been an important component of their overall home assortment. (Get ‘em while they’re young, right?) In a nutshell, with the right mix of product categories, those catering to both staple- and trend-driven shoppers, brands either entering or established in the home space can increase their stickiness with consumers over the long haul.
While design and product development for home have inherent technical differences from that of fashion, there are also plenty of similarities to note. Decor categories are facing increasing pressures of shortened lead times for development, as consumers, just as they do in fashion, have a world of inspiration at their fingertips and a desire to get their hands on that exotic material or print from the other side of the world. Moreover, trends in color and materials, while taking different shapes in home products, often borrow from the same sources. I’m talking to you, millennial pink office chair. On this very topic, Fashionista's recent piece delves into the influences traded between architecture and fashion.
In conclusion, just as the apparel industry has had to take a long hard look at what the present- and future-tense consumer really wants and needs, the same goes for home brands. And in fact, getting this right will dictate who is and isn’t part of the future retail landscape. Want to know more about a successful home product strategy? Talk to us here.