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Sunday, June 14, 2009

Anthropologie's appeal

Sophisticated Sell By: Polly LaBarre It's quite possible to think of Anthropologie as the anti-Gap (and not in the highbrow sense that its Frenchified academic name implies). The Gap pours its investment and creativity into expensive, splashy, celebrity-studded advertising campaigns. Yet, as striking as the spots are, little of the groovy vibe carries over to the actual experience of shopping in the stores (which may be why so many of the Gap's stores are struggling).
"One of our core philosophies," explains Anthropologie president Glen Senk, "is that we spend the money that other companies spend on marketing to create a store experience that exceeds people's expectations. We don't spend money on messages -- we invest in execution."
Customers: What (Certain) Women Want Anthropologie is an oasis of offhand sophistication where you can shop without feeling like some SUV-driving, gold-card-wielding, will-my-kids-get-into-the-right-school suburbanite; where you can buy into the season's runway-sanctioned trend without feeling like a fashion victim; and where, miraculously, almost everything fits. That formula, replicated in each of Anthropologie's unique, custom-designed spaces, holds an almost magnetic appeal for an affluent and influential set of customers -- a set of customers that most other retailers only dream about.
Anthropologie has never advertised, yet its customers stay longer in the stores than most chain shoppers. Their average visit lasts an hour and 15 minutes. And some visits extend to an epic four hours. They spend more -- the average sales per square foot is over $600, and the average customer spend per visit is a relatively high $80. And they keep coming back: Net sales have grown at a 40% compounded annual rate over the past five years; and same-store sales growth was 16.8% in Q4 2001, a rate surpassed in the first half of 2002. The 10-year-old division of Philadelphia-based Urban Outfitters Inc. continues to evade the fate of small box chains in a dismal season for retail and is on target to grow revenues from $121 million to $200 million this year. (That figure includes online and catalog sales.)
According to Senk, there isn't anything offhand about the retailer's connection to its customers. "Most stores cater to a broad base of customers or specialize in a product category. We specialize in one customer. And we offer her everything from clothing to bed linens to furniture to soap."
A veteran merchant who began his career at Bloomingdale's more than two decades ago, and who ran retail and mail-order for Williams-Sonoma Inc. before joining Urban Outfitters in 1994 to build the fledgling Anthropologie business, Senk has a healthy disregard for the conventions of retail. "In my experience, retailers spend most of their time looking at things from the company's perspective or the marketer's perspective," he says. "They talk about trends and brand but rarely about the customer in a meaningful way. We're customer experts. Our focus is on always doing what's right for a specific customer we know very well."
Wendy Brown, director of stores, adds, "We have one customer, and we know exactly who she is. And we don't sit around a table and say to each other, What do you think she'd like? We're out there. We're in the stores, we're in the marketplace. We live where the customer lives."
Ask anyone at Anthropologie who that customer is, and they can rattle off a demographic profile: 30 to 45 years old, college or post-graduate education, married with kids or in a committed relationship, professional or ex-professional, annual household income of $150,000 to $200,000. But those dry matters of fact don't suffice to flesh out the living, breathing woman most Anthropologists call "our friend." Senk, 46, says, "I like to describe her in psychographic terms.
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She's well-read and well-traveled. She is very aware -- she gets our references, whether it's to a town in Europe or to a book or a movie. She's urban minded. She's into cooking, gardening, and wine. She has a natural curiosity about the world. She's relatively fit."
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While most retailers today are obsessed with the highly lucrative and populous "tween" (preteen and young teen) and boomer markets, Anthropologie has cultivated an understanding of and connection to the ultimate tweener: the thirtysomething sophisticate, once known as a Gen-Xer, who has carried her mildly rebellious, against-the-grain independence into a serious career and family life. She's defined less by static qualities and more by a set of dynamic tensions. If the tween anthem is Britney Spears's "I'm Not a Girl, Not Yet a Woman," the Anthropologie customer's plaint is more Alanis Morissette: "I've got one hand in my pocket, and the other one is giving the peace sign." Translation: "I can't pick up my children or sit through a meeting in low-rise jeans, but I'm not nearly ready for an elastic waistband."
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The Anthropologie customer is affluent but not materialistic. She's focused on building a nest but hankers for exotic travel.
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(She can picture herself roughing it with a backpack and Eurail pass -- as long as there is a massage and room service at end of the trek.) She'd like to be a domestic goddess but has no problem cutting corners (she prefers the luscious excess of British cooking sensation Nigella Lawson to the measured perfection of Martha Stewart). She's in tune with trends, but she's a confident individualist when it comes to style. She lives in the suburbs but would never consider herself a suburbanite. (This is where Senk's kinship to his customer is most apparent. He had lived in cities all over the world -- London, San Francisco, New York, and Philadelphia -- before settling in an elegant turn-of-the-century house in the Philadelphia garden suburb of Chestnut Hill with his partner, Anthropologie antiques buyer Keith Johnson. Says Senk: "We're city people -- we'd never dreamed of moving to the suburbs. But Chestnut Hill is sophisticated. It's like a suburb in the city.")
Anthropologie pours even more creative energy into building a vibrant store experience. Nothing is standard in an Anthropologie store, but a few organizing principles help structure the experience. Nearly every store features a sweeping, sculptural post-and-beam structure called "the arcade," which creates a series of niches or"vignettes" along a curved path. (One exception is the arcade-free Philadelphia store, which occupies the old Van Rensselaer mansion on Rittenhouse Square and which is limited by the rooms and orientation of the building.) The vignettes range from a Tunisian Casbah-inspired collection of exotic wares to a gauzy bedroom tableau. Anthropologie's energetic young visual director, Kristin Norris, is responsible for every aspect of the stores' look and feel, including the creation of these vibrant little worlds.
"I think of everything as a story," says Norris. "A bedding story isn't just about linens and comforters. It's about the feeling of nighttime and a sense of place. It's about the pictures on the wall, the soft glow of a lamp, a closet with robes and soft clothing peeking out." Likewise, a dining table overflowing with plates, glasses, candlesticks, table linens, and hay is "a story about fall entertaining." Whether a setting is based on the rooms of your house, the artifacts and way of life of a foreign culture, or a season's collection, Norris and her team create rich, seamless arrangements of one-of-a-kind objects, home merchandise, clothes, and visual themes. It's hard to tell where the merchandise ends and the display begins.
That's precisely the idea, says Norris. "We try to create little environments that tell a story. The idea is to capture a customer's attention so that she'll explore every corner and let her imagination go. We mix up the stock in a way that gives the customer ideas -- ideas about how to mix colors and textiles that she'd never think of combining or ideas about how materials like turquoise and leather can cross categories from clothing to accessories."
Norris's team (in tandem with each store's visual manager, display coordinator, visual sales associate, and a loose circle of contributing artists and craftspeople) adds a rich layer of artistry and visual wit to the store experience: A stunning, four-story yarn sculpture is cantilevered off the top floor of the Philadelphia store. An upside-down tea party -- complete with dangling cups, saucers, and brightly patterned café table -- delights visitors at the entrance to the Westchester Mall store. Branches covered with leaves cut from rich velvets and tweeds speak of fall.
Along with visual cues, Anthropologie trips the customer's imagination with physical sensations. "Anthropologie is defined by the idea and activity of discovery," says Pompei. "We do everything we can to ground the experience in tactile, visual, kinesthetic, sensual elements. From the materials we use to how the space is laid out. There are no aisles -- you wander and chart your own course. It's subliminal but effective. I describe it as like taking a walk in the woods, or walking the hill towns of Tuscany. The paths are never straight; they're always arched or curved or faceted. You always have a sense of anticipation of what's 15 feet in front of you. Consciously or not, your senses are activated. That's fun. Not in the entertainment sense, but in the engaged sense. It's fun because it's stimulating. It's fun because you're seeing things and connections you've never seen before."
Merchandise: Philosophy, Fit, Mix Every customer discovery in an Anthropologie store starts with discoveries by buyers in the field. Keith Johnson, de facto chief product anthropologist, spends half of his time (down from nearly three-quarters a few years ago) traveling the globe to scour antique fairs, flea markets, obscure emporiums, tiny shops, museums, and factories for inspiration and artifacts. For eight years, his job has been literally to shop the world -- and he has the passport (reinforced with 72 extra pages crowded with stamps and visas) to prove it.
For Johnson, the ultimate find is not only a one-of-a-kind object that Anthropologie can sell in the store (found objects make up a small percentage of home sales, which comprise 35% of total sales), but also one that inspires a new in-house design. "My job is to provide the store with some backbone to create wonderful displays and ambiance," he says. "We sell antiques, but the focus is to create an evocative environment. At the same time, I'm always looking for products that we can reproduce and turn into our own collection. There's a high premium on proprietary product. It reinforces the unique experience of Anthropologie -- and the margins are great."
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The women's division works with Anthropologie's three-concept framework every season. (The clothing is currently primarily feminine, with a smaller amount of ethnic and modern.) "We create a story: Who is she? Where does she live? What does her favorite sweater look like?" says Wurtzburger. For spring 2003, the modern concept is named "Johannes" -- after the midsummer's night festival in Finland -- and is a casual concept that mixes a preppy look with old-world detail.
Be Cheap Unbridled creativity and strict cost control are by no means mutually exclusive concepts. Anthropologie has always favored humble, recycled, and natural materials. Some of the store's most striking visual effects have been crafted out of mundane materials. Last season, the visual team took the idea to new levels of austerity when it created window displays using only big pieces of butcher paper, scissors, and a needle and thread. The windows featured paper cutouts of some striking silhouettes with detailing from that season's collection. The backdrop was a big sheet of butcher paper covered in hand-written poetry. People called from all over the country to see if they could buy the cutouts.