Will homey habits from the pandemic fuel Williams-Sonoma future growth?
@jordvdz via Twenty20

Will homey habits from the pandemic fuel Williams-Sonoma future growth?

Williams-Sonoma Inc., the parent of Williams-Sonoma, Pottery Barn and West Elm, reported that same-store sales grew 25.7 percent in the fourth quarter and 17.0 percent in 2020 with the help of the home cooking craze. Officials expect some old, some emerging and some new trends to drive healthy growth in 2021.

Asked by an analyst on the company’s fourth quarter earnings call which trends emerging during the pandemic would prove “stickiest” post-pandemic, Laura Alber, president and CEO, cited the continued benefit of home cooking discovery, particularly as many Millennials and other younger generations have picked up cooking.

Ms. Alber said, “Once you learn to cook, you never go back. You may go out to dinner, but you’re going to cook better, and you’re always going to be interested in the cooking trend, and that is key to the future of Williams-Sonoma.”

All three of the company’s banners are expected to benefit from a thirst to entertain at home as social distancing measures further ease. Ms. Alber said, “We haven’t been able to entertain, right? I mean Easter, some people might actually be able to get together for Easter. July 4th. Imagine the holidays. We are busy dreaming of the most inspiring Christmas parties, the Hanukkah parties, New Year’s parties that we can host in our homes.”

All three banners have also seen strength in outdoor furniture, and that’s expected to continue. Ms. Alber, “We all got fresh air. Nobody even got the cold or the flu. I think you’re going to stay outdoors a lot more than you did before.”

Finally, the work-at-home trend is expected to support purchases. Said Ms. Alber, “I don’t know about you, but I still haven’t really accomplished the perfect work-from-home station. I still have a desk to buy. You’ve just been so busy. You just don’t get around to it.”

Other factors expected to support growth include the shift on online selling, given its digital-first focus, the expected continued recovery in brick and mortar, the benefit of double-digit growth in 2020 in new customer counts and loyalty members, and catching up on inventory shortages due to current supply-chain bottlenecks.

BrainTrust

"Food and socializing are entwined and they’ll help Williams-Sonoma drive growth this year. "

Lisa Goller

B2B Content Strategist


"Ms. Alber sounds more like she is wishin’ and hopin’ than looking at reality. I hope her enthusiasm is part of the real planning process."

Gene Detroyer

Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.


"I’m not of the mindset that the unprecedented shift to everything-at-home is permanent."

Phil Rubin

Founder, Grey Space Matters


Discussion Questions

DISCUSSION QUESTIONS: Do you see Williams-Sonoma’s banners tapping the right trends in 2021 and post-pandemic to continue to drive growth? Which trends cited in the article will likely be most beneficial and which are more questionable?

Poll

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Richard Hernandez
Active Member
3 years ago

I think this not only applies to Williams-Sonoma but all who trade in home – Sur la Table, Walmart, Target, Lowe’s/Home Depot (outdoor furniture and equipment). People are of course still staying at home and because of that people are making the investment in things that they normally might have not considered — dinnerware, flatware, linens (napkins, tablecloths, towels), grilling equipment, outdoor furniture, home office, home decor, etc. for their family. Along with that, those retailers have also run discounts on those items to make them more desirable additionally advertising attachment items to offset the investment for those items. I believe this trend will continue as BOPIS, delivery to home, and curbside have gotten easier as the pandemic has progressed.

Lisa Goller
Trusted Member
3 years ago

Food and socializing are entwined and they’ll help Williams-Sonoma drive growth this year.

Upscale home entertaining will help to compensate for a year of social deprivation. Many consumers are excited to show off their new home cooking prowess or the furniture they upgraded during the pandemic. Williams-Sonoma wants these consumers who take pride in sharing their domestic bliss.

Conversely, others seek to escape their home for travel, sports, entertainment and events after a year of withdrawal. Consumption of these substitutes is important to watch as the pandemic gets under control.

DeAnn Campbell
Active Member
3 years ago

I do think economic uncertainty, despite current vaccine-fueled optimism, will continue to make all of the “More Life at Home” trends stick with us for the long term. Although shorter term I see an imminent rush to eat out in the second half of this year, simply because we are tired of our usual routines and desperate for some new experiences. But entertaining at home for the holidays will be big for the next couple of years, as well as a renewed love of dinner parties.

Gene Detroyer
Noble Member
3 years ago

Ms. Alber sounds more like she is wishin’ and hopin’ than looking at reality. I hope her enthusiasm is part of the real planning process. Consider, same-store sales up 17 percent. Boy, if they add 5 percent to that it would be more than an outstanding performance.

Once we are released from the pandemic protocols, will those who haven’t indulged in the trends developed in the pandemic adopt them? I doubt it. Will those holiday gatherings be any different than they were prior? Even home cooking, how long will it take for the tired worker at the end of the day to just say, gee, I really don’t want to cook tonight. Let’s go out or order in?

In the months or even years post-pandemic, home is not where people will want to be. They will have had enough of “home.”

Phil Rubin
Member
3 years ago

Williams-Sonoma is thriving during the pandemic and for good reasons. These good reasons are its ability to position itself to take advantage of the shift to everything-at-home and the good fortune to be in the right categories at the right time. The former will help it continue to grow but I’m not of the mindset that the unprecedented shift to everything-at-home is permanent. As people are vaccinated and things like restaurants re-open, there is enough savings and disposable income to return to dining out and spending time with people away from home. Some of the spending is going to be at the expense of further investments in home and that will ultimately slow the growth.

Bindu Gupta
3 years ago

In-homing will surely boost Williams-Sonoma’s brands. People have realized the importance of having an effective WFH set-up, benefits of cooking and designing more functional spaces and this will stay with them in the long run.