COVID cooks up an e-commerce bonus for Williams Sonoma

Last week we looked at how COVID-19 had impacted on certain categories of the retail apparel industry, favoring a consumer shift to casual clothing and away from high end and business outfits as people remain housebound. Lockdowns have also brought a boost to certain other segments of the retail sector, such as firms specialising in interior decor and accessories.

Williams Sonoma is a good case in point. It has seen a 15% year-on-year rise in customer growth in recent months. The firm has gained from a move to home cooking as restaurants have been off the menu during lockdowns. The question as those restrictions are lifted is whether this turns out to be a permanent shift. CEO Laura Alber reckons it is:

As we look forward, we are excited about the growing interest in cooking, especially for Millennials, which will not only benefit our business in the short-term, but as more people learn to cook, it will become a lifelong skill that should drive our business over the longer-term.

There are swings and roundabouts in play. Backpacks usually sell well at this time of year as families prepare for kids returning to school, but not in 2020. But to balance that, there's been an uptick in interest around home study furnishings and accessories.

Another shift with significance for the future has been a swing towards a younger demographic with the sought-after Millennial customers seemingly nest-building during lockdown, with a notable increase in business coming from apartment dwellers with no gardens or outside spaces. If you're stuck indoors, make it as comfortable as possible.

Digital first

All of this is being serviced by a digital first strategy, with e-commerce sales currently running at a 46% per annum growth rate, supported by new omni-channel offerings, such as ship-from-store and curbside pick-up. Alber says:

Our e-commerce performance [is] a powerful example of our brand and digital strategies that work. The key drivers of our growth were innovative, sustainable products and engaging content-rich experience and technology improvements. Our newly designed single page checkout experience, improved site speed, extensive product information page improvements, and our outward-powered design crew room plan or enhancements all drove strong results.

We continue to optimize our digital spend, high returning investments, leveraging our in-house media capabilities, and a strict test-and-learn agenda across the portfolio.

This is payback for long term investment, she argues:

We have been investing in e-commerce for many years, so we have a very sophisticated platform. It's not as if we have some big hockey stick to come with the tech stack.

Tech thinking

Chief Technology Officer Yasir Anwar says that the COVID crisis has been a time of learning:

In COVID time we took a step back and looked at the optimized way to keep investing in tech. Right now we are trending back towards our pre-COVID investment in technology all over, including doubling down on e-commerce. I'm so proud to have such a growth mindset and everybody in my technology team's agility, commitment and willing to fight against all odds. That has worked very well for our customers and for our associates.

During these COVID times many companies have gone through faster transformation, digital transformation. We have done the same. Many times we have gone faster in implementing and building things which might have taken six months in a regular time period. My teams have built it in two months, one-and-a-half months. We have gone very fast to market, to experiment with the customers and learn the signals from the customers, what they need in our sites and their experiences, using our own homegrown experimentation platform, using our own homegrown recommendations platform. We're trying to connect out much better than ever, with our website experiences, with our store experiences and design.

There's a big emphasis on data underpinning all this, he adds:

One important thing of the past few years has been to focus and drive our decisions based on data, analytics and powered by Artificial Intelligence and ML, whether it's search engine, whether it's outward experiences and all. We have developed a very, very strong package of talent, platform, technology and the innovation stream is growing very fast. And we believe that this is not at an end, it's at the beginning. We're going to build so much more which is going to be very long lasting, beyond COVID and beyond 2021 and further.

That includes new roles for physical stores as part of the omni-channel balance, he says:

We have been continuously investing in converting stores into more omni experiences, whether it's Buy Online, Pick-up In Store, ship-from-store, ship-to-store, curbside pickup, especially to be providing safety to the customers during the COVID times.

That said, what the omni-channel mix will look like in terms of physical and digital will inevitably morph over time, adds Alber.

We are investing in our stores where we operate and we are closing others, so that we can be very focused on running great stores with great experiences in them. The mix will continue to shift, obviously, because the growth in DTC [direct to consumer] is much greater and stores are contracting.

I think this pandemic has shown us that we are agile, and we can operate regardless. And the store people are the people who make this happen, whether they have their stores open or they're talking to customers from home. That was something that I think we were all really just hoped would happen, but we're so impressed and it continues to be a strength.

My take

Whether there is really a new generation of sourdough bread bakers and creators of homemade casseroles out there on a permanent basis remains to be seen, but for now Williams Sonoma has pivoted to new COVID realities well. Again, it's a good example not only of earlier tech spend, but also of savvy allocation of resources, as we noted back in March.