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Pier 1 Imports, the omnichannel retailer specializing in imported home furnishings, has filed for bankruptcy. Mintel experts Alexis DeSalva and Diana Kelter take a comprehensive look at the competitive retail industry as well as what led to Pier 1’s decreasing popularity with consumers.
Alexis DeSalva, Senior Retail and eCommerce Analyst, US
Pier 1 failed to compete with the lure of value-based retailers and digital competition
Consumers have increasing shopping options for home furnishings, and many are gravitating toward those that offer established style and convenience. Pier 1 Imports and some similar competitors are losing shoppers to places like Amazon and Target, where consumers can find affordable, on-trend home decor while also easily fulfilling other shopping needs. In fact, almost half of home decor shoppers had shopped either Target, Amazon or Walmart for such needs compared to only less than one in five who shopped Pier 1, according to Mintel research on shopping for home decor. Pier 1 failed to offer customers a consistent, brand style that would convince shoppers to consider them as an option.
Pier 1 lost shoppers on and offline because the assortment wasn’t compelling enough for consumers to rationalize making a special trip to the store.
Online is a similar story. Although in-store shopping remains the most common way to shop for home furnishings, consumers appreciate the ease of product discovery and deal-seeking provided by shopping digitally. According to Mintel research on how online shopping for home decor is evolving, consumers see more convenience at big-box retailers such as Amazon, where three-quarters of online home decor shoppers recently shopped, or Walmart, where more than two in five had recently shopped, compared to home furnishings stores, where only one in five had recently shopped. Pier 1 failed to innovate digitally in a compelling way. The e-commerce site appears outdated and the broad assortment is so wide-ranging it’s difficult to navigate, giving online browsers many reasons to abandon their carts.
Target is perhaps the biggest threat to Pier 1. Not only is there likely some overlap in customers, but Target’s expanded home furnishings assortment is comprised with well-priced private brands with distinct styles, and exclusive collaborations that lure in new shoppers, while also building loyalty among the many already shopping in their stores. Pier 1 lost shoppers on and offline because the assortment wasn’t compelling enough for consumers to rationalize making a special trip to the store, especially when they could get a more convenient experience at Target or elsewhere.
Pier 1 failed to evolve it’s aesthetic in a DTC world
Direct-to-consumer (DTC) brands have transformed the world of retail and it’s putting the pressure on legacy retailers to evolve the relationship they have with consumers. With DTC brands building a reputation digitally, the aesthetic is the only thing they have to capture consumer attention, which puts more importance on design and messaging. As a home decor brand, Pier 1 failed to evolve the aesthetic of its brand in-store and online. Additionally, brands that aren’t traditionally home decor based became a direct area of competition.
For example, plants have become a core focus of home decor for Millennials, and West Elm recently embraced that focus by forming a partnership with a DTC plant company, Bloomscape. In addition, as DTC personal care brands prioritize aesthetics, such as Glossier or Quip, they intrinsically become a component of shaping the design of a home versus something that’s hidden in a drawer. As seen in the Mintel Trend, ‘Extend My Brand,’ we’re seeing the opportunities brands have to expand in various manners, but that also means brands have to think about competitive forces in a less traditional manner.