Williams Sonoma/ Hbr
1. What are four to five ways that specialty retailers differ from discounters (a la Wal-Mart)?
Inventory turns: According to the data provided in the Williams-Sonoma Inc. case study (1990) average specialty store turns were just under 2x. If you look at the data from the Wal-Mart Article discount stores have turns many times that, actually turns around the neighborhood of 8x.
Margins: Discounters such as Wal-Mart go for the high volume low margin approach. Sine their whole approach revolves around offering low prices, this goes hand in hand with low margins.
Customer Service: Specialty stores focus on offering customer service. Selling their high prices and high margin offerings requires a high level of customer assistance and service from its sales force. Customers feel like they deserve and are paying for knowledge and service when they shop at stores such as Williams-Sonoma.
Atmosphere/Experience: When someone walks into a specialty store they are being sold on a concept. A specialty retailer selling higher end goods would not prevail if their physical stores had the atmosphere of a Wal-Mart for example. Wal-Marts concept is large selection at low prices. So like-wise, Wal-Mart's clientele would probably question the low prices concept if they walked into a store with displays and fixtures similar to Williams-Sonoma's. Also Williams-Sonoma is selling style, or a lifestyle. Discount retailers however, are not; they are selling the concept of wide selection at low prices.
2. What is the primary force impacting the company (Porter)?
I believe that Williams-Sonoma's primary force of competition is jockeying for position. Williams-Sonoma is constantly at odds with the competition. The company has to keep careful watch of its competition and continually fight for market share.
Department Stores: According to the case study, department stores maintained substantial purchasing power over wholesalers and manufacturers. These
Inventory turns: According to the data provided in the Williams-Sonoma Inc. case study (1990) average specialty store turns were just under 2x. If you look at the data from the Wal-Mart Article discount stores have turns many times that, actually turns around the neighborhood of 8x.
Margins: Discounters such as Wal-Mart go for the high volume low margin approach. Sine their whole approach revolves around offering low prices, this goes hand in hand with low margins.
Customer Service: Specialty stores focus on offering customer service. Selling their high prices and high margin offerings requires a high level of customer assistance and service from its sales force. Customers feel like they deserve and are paying for knowledge and service when they shop at stores such as Williams-Sonoma.
Atmosphere/Experience: When someone walks into a specialty store they are being sold on a concept. A specialty retailer selling higher end goods would not prevail if their physical stores had the atmosphere of a Wal-Mart for example. Wal-Marts concept is large selection at low prices. So like-wise, Wal-Mart's clientele would probably question the low prices concept if they walked into a store with displays and fixtures similar to Williams-Sonoma's. Also Williams-Sonoma is selling style, or a lifestyle. Discount retailers however, are not; they are selling the concept of wide selection at low prices.
2. What is the primary force impacting the company (Porter)?
I believe that Williams-Sonoma's primary force of competition is jockeying for position. Williams-Sonoma is constantly at odds with the competition. The company has to keep careful watch of its competition and continually fight for market share.
Department Stores: According to the case study, department stores maintained substantial purchasing power over wholesalers and manufacturers. These