Photo: West Elm
Will opening hotels help West Elm sell more furniture?
West Elm is launching a number of boutique hotels. The home furnishings retailer, owned by Williams & Sonoma, will design, furnish and market the hotels. Guests will be given the opportunity to purchase items found in their room.
The first properties in Detroit, Savannah, Charlotte and Indianapolis are expected to begin opening in late 2018. DDK will operate the hotels.
“After twenty-six consecutive quarters of double-digit comparative growth, including our successful entry into the commercial furnishings market with West Elm Workspace, we’ve created an active bond with our customers that can extend beyond home and work,” said Jim Brett, president of West Elm, in a statement.
West Elm will emphasize local décor, cuisine and culture from the region in its hotels, including artwork commissioned and curated locally.
The move comes amid the growing popularity of boutique hotels. But Mr. Brett told the Wall Street Journal that part of the reason it is opening hotels is because he didn’t want to make the mistake of other retailers in opening too many stores. West Elm currently has 93 stores and expects to open a similar number of hotels. Last year the company launched a commercial furniture division, Workspace, to similarly diversify its expansion options.
Although the items in the rooms won’t include price tags, guests will be able to purchase West Elm bed sheets, bar trolleys, chairs and other furnishings as well as any artwork in the hotels online at westelm.com. West Elm hospitality head Peter Fowler told the Journal, “We don’t want you to feel like you’re sleeping in a showroom.”
Others pursuing similar moves include Restoration Hardware, which opened a 14-room hotel and restaurant in New York’s Meatpacking District last year, as well as Equinox Holdings Inc., which plans to open fitness-themed hotels.
- West Elm Expands Into Travel And Hospitality With West Elm Hotels – West Elm
- West Elm to Launch Its Own Boutique Hotels – The Wall Street Journal (sub. required)
- West Elm bets its brand will draw guests to a new hotel chain – Business Journals
- West Elm Launches Boutique Hotel Line (And It’s Shoppable) – Conde Nast Traveler
- Major Hotel Brands Compete For Space In The Boutique Hotel Trend – International Business Times
Discussion Questions
DISCUSSION QUESTIONS: Do hotels make sense as a branding extension for West Elm and other retailers? What do you think of enabling guests to purchase items in their hotel rooms? Should other retailers with a strong lifestyle or niche focus be looking to diversify beyond retail?
Poll
BrainTrust
Shep Hyken
Chief Amazement Officer, Shepard Presentations, LLC
Bob Phibbs
President/CEO, The Retail Doctor
I, the eternal optimist, say: It’s a long shot.
What a brilliant idea! Most people test drive a car before they buy it, so why not sleep in a bed for a full night or two before you buy it? It is a great extension for a furniture retailer, albeit bedroom furniture. I do think it is a good idea and if they sell no items they still have their hotel revenue to keep the profits coming into the company. Marriott does the same thing allowing customers to buy items online that are used in their rooms so it’s not so novel but still a good idea. I can see Bed, Bath and Beyond attempting an extension of their sales by providing linens, etc., to various hotel chains so that customers can experience the quality and feel of their products. West Elm is truly a innovator and truly a segment disruptor!
Part of West Elm’s stated motivation is to widen the brand footprint without opening too many brick-and-mortar stores. It’s a creative way to expand a lifestyle brand into a related business. (Of course there is the added benefit of filling several hotels with saleable product.)
Hotels have been in the ancillary business of selling their proprietary mattresses, bedding and towels for several years. This takes the concept into reverse gear and it may turn out to be a brand expansion opportunity for West Elm’s parent, too — Williams-Sonoma kitchens inside West Elm hotels, anyone?
Running a hotel is quite different than running a chain of stores. While I like the idea of showcasing products by letting consumers use them prior to purchase, I have to wonder if the bottom-line price for West Elm is worth it.
This is the ultimate showcase. Don’t just let people sit on a bed. Let them sleep on it. Sometimes for multiple nights. Let them touch, feel and use the quality nightstands and dressers.
Selling beds and sheets isn’t a new idea. Marriott, Starwood and other brands have been doing this for years. But they are in the hotel business and selling beds is simply an add-on to their offer. So is West Elm Hotels an extension of the retail store or a standalone business? Or, an even bigger question: Can a successful retailer run a successful hotel?
I would offer that the number of potential customers looking to purchase furniture while vacationing or attending a conference is slim. Everyone is trying everything but talking about upgrading their brand experience in their own stores. I was in Vegas last weekend and visited Lindbergh clothing which had a cafe. Two employees in a two-story location — and 50 percent off everything. The cafe was busy but the merchandise sat. Until retailers up their game in their own locations, look for further brand extensions as distractions.
I think it is a smart idea and, for it to work, all the other issues in terms of how the customer rates their stay at the hotel must be top notch. Otherwise it will not work. From the front desk to the room service and especially to the maid service, which provides fresh sheets and a sparkling clean room, it must be first rate. Then it will make the guests see the quality of the total experience. It’s not easy to do but it has to be this way, or all the effort of providing the furniture in these rooms will not work.
There is a lot of serendipity needed for this to take off. I wonder if they would be better off trying to develop a scripted dramatic web series. The protagonist would be a hotel interior designer who fights through creative conflict et al., always landing on a beautiful design concept at the end of each episode … all items would be for sale at West Elm.
However, as a real estate play, I have always wondered if Macy’s would be better served converting low-performing stores into residential units (zoning allowed), if the profit per square foot would be greater.
I think it is a really smart way to diversify. As Brett says in the article, West Elm only can expand their retail footprint so far, and this approach allows them to evolve as a lifestyle brand. I like it.
Depending on their level of financial involvement, and assuming that they’re well-run, it’s probably worth a try.
But how well an average room will serve as a showroom I have to wonder: I would think the main considerations when furnishing a hotel room are cost and durability, not necessarily what is important in a house.
I know I am late to the conversation, however, I just wanted to say that this is not part of their core competency and I would agree it is a long shot. I would have suggested a partnership with a known brand to feature their merchandise, with a way to make purchases.
For my 2 cents.
As a setting for experimentation and intelligence gathering, or as a PR vehicle, this has some promise. But I continue to be a believer in perfecting the core competency of the business rather than in trying to be good at two things at once. This has great potential to be an internal distraction and only small potential to sell more furniture.