The Decline of Pier 1 Imports. What Happened? 10 Marketing Tips
We all know Pier 1 as the home goods retailer that was the popular destination for exotic rattan chairs and cheap embroidered pillows in the 1990s. however, after years of struggles, the company finally filed for Chapter 11 bankruptcy in February of this year, as was reported over at runrex.com and guttulus.com. There is a lot we can learn from the company’s decline, including marketing tips that can help us avoid a similar fate. This is why this article will look to highlight some of the factors that were behind Pier 1’s decline.
The growth of online retail
The growth of online retail, with consumers increasingly opting to shop online, has hurt Pier 1’s fortunes according to the gurus over at runrex.com. With over 930 stores, the company has been heavily reliant on brick-and-mortar stores, which has been a big issue with foot traffic to stores declining over the last couple of years, as outlined over at guttulus.com. This has affected sales badly, leading to a streak of poor earnings that meant that the company was always struggling and in decline even before the coronavirus pandemic.
Competition from big-box retailers
Other than the growth of online retail and competition from e-commerce players like Amazon, the company has also come under heavy competition from big-box retailers like Walmart, who offered similar electric décor items, only at lower prices as discussed over at runrex.com. These competitors cut into the company’s customer base and left it struggling to find its footing in what was now a very competitive space, precipitating its decline.
Dated stores
The company was founded in 1962, and its stores looked like they had been around just as long according to the folks over at guttulus.com. Over the years, the company had neglected to sufficiently modernize its stores to attract customers and increase in-store shopping experience. This put off most of its customers, who left as a result of its dated stores, but also due to its poor merchandise assortments. This is yet another factor that can be attributed to Pier 1’s decline and eventual filing of bankruptcy.
The company tried to make too many changes in a short period
Pier 1 was on a lengthy losing streak, and to arrest its revenue slide, the company announced in 2018 an ambitious three-year turnaround plan to revitalize the company and boost revenue, as discussed over at runrex.com. The plan included new approaches to product sourcing, merchandising, pricing, store design, and so forth, including digital marketing. However, the company tried to make all these changes at once and the accompanying costs and challenges proved to be too much for it, leading to a sharp decline in earnings and liquidity that also contributed to its decline.
The decline of the mall
Pier 1 Imports was also heavily reliant on malls, with most of its stores located in malls all across the country. However, when malls began to lose their popularity, so did Pier 1’s stores, with foot traffic into their stores declining for years now as explained over at guttulus.com. The company linked its fortunes with that of malls when they were popular in the noughties, which then became a big problem for it when the tide turned and malls lost popularity as people increasingly stayed away, leading to its decline.
The company failed to carve a niche for itself
One of Pier 1’s main selling points at its peak was the fact that it would offer unique merchandise at very affordable prices. But in recent years, some of its competitors have been able to offer similar products at lower prices, as discussed over at runrex.com. The company has been left stuck in the middle, in a spot where it doesn’t offer products that are of a quality high enough to attract high-end and affluent customers, while also not being cheap enough to attract value customers. The company, was, therefore, unable to carve itself a niche, which contributed to its decline.
Diversification of merchandise failed
Pier 1 also tried to diversify its merchandise by going beyond furniture, which is what it was mainly known for as covered over at guttulus.com. They tried to offer different products like lights, candles, and so forth, but these new products failed to attract new customers. The company’s failed diversification plan also made it difficult for them to clear inventory brought in as a result of the plan, which led to heavy losses. This is another factor that contributed to Pier 1’s decline and filing of bankruptcy.
It has no clear brand
Other than the fact that the company has failed to hit a sweet spot as mentioned earlier on, its inability to develop a solid brand placement has also contributed to its decline, according to the gurus over at runrex.com. While their unique selection was its original brand identity, the internet and its ubiquity put paid to this, and ever since, the company has been struggling to carve out a solid brand identity as consumers don’t know what its unique about Pier 1 and what makes the company different.
An extensive footprint
With over 1,000 stores, the company had too many stores, which is another factor that contributed to its decline, according to the subject matter experts over at guttulus.com. With foot traffic to its stores declining, paying rent, honoring leases, and catering for operational costs in its underperforming stores was proving difficult even before the onset of the coronavirus and the closers that came with it. The company’s appetite for real estate, where it acquired one store after the other, came back to bite it, particularly with business moving online.
Failure to embrace harmonized retail
Nowadays, as the gurus over at runrex.com will tell you, it is not about being everywhere and being all things for your audience, but showing up for the right customers in remarkable ways, at the right time and when it matters; this is what is referred to as harmonized retail. Pier 1’s failure to embrace harmonized retail, highlighted by how the company decided to shut down e-commerce completely in 2007 just as everyone else was investing in it, is yet another factor behind its decline.
The above are some of the factors that contributed to Pier 1 Imports’ decline, and hopefully, you can glean useful marketing tips that will allow you to avoid the company’s fate, with more on this and other related topics to be found over at the amazing runrex.com and guttulus.com.