Lessons Learned from the Failure of Williams Sonoma

If you watch the stock market, you probably know of Williams Sonoma's woes. They are far from over. Amazon and others continue to encroach on the retailer's space with more competitive pricing and amenities such as wish lists and gift registries. At the high end, physical stores targeted on foodies' experiences are exploding. Although Williams Sonoma might be somewhat unique, a closer look at its technology fails and how they impacted customer experience provides lessons for us all, not just those in retail.

Have a 21st century data strategy.

Back in the 1990s when the Internet was just emerging, it was OK to think of it as a separate channel. Today, omnichannel is more than a buzzword; it's an expectation. This means data on inventory, sales, and marketing has to be synched, not on a batch but on a real-time basis.

One bride I know had an embarrassing moment at a recent wedding shower, where four guests gave identical gifts. All were purchased from her Williams Sonoma wedding registry, with a mixture of online and in-store ordering. Not only did Williams Sonoma's application fail to keep the duplicates from happening, but weeks later, the registry had still not caught up with the error. How many cast iron grill pans does one loving couple need?

A 21st-century data strategy applies to how you leverage that data as well. The beauty of customer communities and ratings, feedback scores, and the like is that customers can share input about the quality and usefulness of the products you sell. Williams Sonoma's fail #2 was not leveraging that feedback in the most basic of product decisions. If all your customer ratings of a product are nearly 0 stars, and customers consistently say products simply don't work, that warrants a response from you. Either pull the product or tell customers how you plan to address it. The company simply wasn't watching its data.

The same is true for its social channel. If you have a social channel, monitor it! Customers go on Twitter more often with complaints than with kudos, and they expect responses. This doesn't have to be a costly venture; but it was one Williams Sonoma has apparently given up on as well.

You can't just talk omnichannel.

Omnichannel is not just about data, but about integrated processes. We all talk about integrated contact channels, but a recent call by me to Williams Sonoma to resolve an online issue, allegedly to one of their online experts, left me bemused (for lack of a better term to print). After numerous efforts to electronically solve my problem, that same online service expert suggested I call a store. For an online issue that the online experts couldn't resolve. That had nothing to do with the store.

Don't lose focus.

The final step toward demise Williams Sonoma took was to go low, closing retail stores in key areas. Once known as the experience store where customers could go to try products, watch live cooking demonstrations, and engage with a community of home chefs, Williams Sonoma was pushed down by later entrants like Sur la Table and, in some markets, celebrity chefs' retail establishments, where customers got real cooking classes, celebrity sightings, specialty tastings, and more. Williams Sonoma chose not to compete in that higher-margin battle, instead shutting down the one way it could differentiate against Amazon.

To be clear, today a technology fail is a retail fail that no amount of employee training or motivation can overcome. A lack of focus, a decades-lagging data strategy, and the lack of technology to empower customer-facing employees—be they in stores or online—has resulted in a miserable customer experience at Williams Sonoma. In a marketplace where there is a clear choice between going high (Sur la Table, as an example) and going low (Amazon now carries many brands Williams Sonoma does), technology fails and a lack of focus took Williams Sonoma down the low road, costing it its brand prestige, market value, and ultimately its customers.

Rebecca Wettemann is a vice president at Nucleus Research.

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