OVERVIEWIn October 1998 Euromarket Design, Inc. launched an advertising campaign for Crate & Barrel, its chain of housewares and furniture stores.With an estimated budget of $3.5 million, Chicago-based ad agency McConnaughy Stein Schmidt Brown (MSSB) created a visually striking print campaign that appeared in national publications and regional magazines. While most of Crate & Barrel’s previous advertising had focused on selling individual products, the new campaign attempted to burnish Crate & Barrel’s overall brand image and distinguish the company from its various rivals. Although the market for housewares was growing—as consumers’ real wages rose, new home construction surged, and aging baby boomers spent more on redecorating—Crate & Barrel faced increased competition from other housewares retailers, ranging from other upscale stores such as Williams-Sonoma Inc.’s Pottery Barn to the mass merchandiser Target, owned by the Dayton Hudson Corp.
Crate & Barrel did not abandon specific products completely in its effort to promote its new image. Instead, the 1998 print ads paired shots of individual offerings with scenes of nature or buildings. The copy for the ads was somewhat lengthy and relied on a subdued wittiness to convey the campaign’s message—that Crate & Barrel offered timeless products that imbued one’s life with simplicity. For instance, one of the five ads queried, ‘‘What does one of our tables have in common with an afternoon in the country? Or one of our chairs with a lakeside sunset?’’ The copy continued, ‘‘Well, all warmly embrace the concept of simplicity: Clearly a plus in an age when three-fourths of the world’s surface is covered with water, but four-fifths is wired for cable.’’ An elegant, classic table was portrayed next to a scene of a wooden bridge expanding out over the ocean to the horizon line. The company’s logo was discreetly placed in the corner of the piece. Other ads depicted a Crate & Barrel chair (along with a deserted shoreline), a goblet (with a snowcovered pastoral scene), plates (with a country chapel), and stockings stuffed with presents (with another snowy landscape). While some of the print executions were clearly holiday oriented, they nevertheless attempted to impart the campaign’s overall theme, that Crate & Barrel was ‘‘not just a local housewares shop,’’ as Heidi Musachio, an account supervisor at MSSB, told Adweek. Like most other retailers, Crate & Barrel’s peak business was during the holiday season. Accordingly, the campaign ran through December 1998 and then ended. Although the company’s sales figures rose during the duration of the campaign and the ads received plaudits from the advertising community, Crate & Barrel shifted its advertising account to the recently formed Chicago ad shop Tucker Tapia and returned to more product-focused spots.
HISTORICAL CONTEXT
Crate & Barrel’s humble origins gave no indication of its future status as a housewares and furniture ‘‘powerhouse,’’ as the Chicago Tribune described the company.
Founded in 1962 by Gordon and Carole Segal, the first Crate & Barrel store was housed in an abandoned elevator factory in Chicago and stocked with specialty housewares items. Because they could not afford expensive merchandise fixtures, the Segals displayed their wares on packing crates and barrels, thereby hitting upon the catchy name for their venture. ‘‘I knew plenty of young people like us with good taste and no money,’’ Gordon Segal told HFN: The Weekly Newspaper for the Home Furnishing Network. ‘‘Who was catering to them?’’ As the company expanded and opened new stores, Crate & Barrel won the allegiance of the baby boomer generation—who increasingly earned more money to complement their ‘‘good taste’’—with its distinctive and well-made products.
In the early 1990s Crate & Barrel broadened its offerings to include furniture. In fact, by 1995 furniture accounted for one-third of the company’s sales. After its 1994 revenues topped $272 million, Crate & Barrel opened a Manhattan store in 1995 with a splashy campaign. By 1996 Crate & Barrel had grown to 62 retail outlets in 15 U.S. markets and did a brisk catalog business as well. Segal teamed up with German mail-order giant Otto Versand in 1998 to help fuel expansion of the privately held company. At the time the 1998 Crate & Barrel print campaign debuted, Segal boasted to the Chicago Tribune that ‘‘we’ve never had business better.’’
TARGET MARKET
Crate & Barrel’s success was due in part to the financial well-being of its core customers, those consumers aged 35 to 60. According to Gifts and Decorative Accessories, the bullish U.S. economy had created ‘‘new pockets of affluence,’’ in which ‘‘5 percent of the population [was] made up of households with incomes of more than $100,000.’’ Leading the pack were baby boomers, who had sown their wild oats in the 1960s and 1970s and had settled down into middle age and family life by the 1990s. As a result, as the Chicago Tribune noted, these consumers chose ‘‘to spend their cash on decorating, remodeling, and expanding their homes.’’ In 1997 ‘‘boomer-led families making more than $70,000 a year spent almost $100 billion on home-related products,’’ the Los Angeles Times reported. Crate & Barrel’s furniture sold especially well among baby boomers, who were more apt than their younger counterparts to devote thousands of dollars to new furniture. The company recognized that it would need to attract these mature consumers with its 1998 print campaign.
To reach this audience, Crate & Barrel incorporated themes that resonated with the group. After the rampant consumerism that had characterized much of the 1980s, the affluent classes of the 1990s largely eschewed this worldview and at least paid lip service to the notion of simplicity—of living with less and thereby living more fully. Moreover, as baby boomers aged, they grew nostalgic for the past. Crate & Barrel incorporated both of these sentiments into its 1998 print campaign. One of the ads, which depicted an oversized chair with classic lines and minimal detailing as well as an empty wooden bench facing the seemingly infinite span of the sea, proclaimed that ‘‘things were simpler ‘then.’ Or so we often hear. But if things were simpler ‘then’ does that mean they have to be more complicated now? Not by a long shot. At Crate & Barrel we’ve got a veritable store full of classic designs that prove ‘then’ doesn’t own simple. It merely has a time share.’’ The message was clear. Not only were Crate & Barrel’s products themselves attractively and stylishly straightforward, but they could also seamlessly connect consumers to a less complicated past. As Segal told HFN, ‘‘We’re selling concepts and lifestyles, not items.’’
Baby boomers were not the only consumer group interested in housewares, however. ‘‘American consumers’ passion for the home spans to the young,’’ noted Gifts & Decorative Accessories. First-time home buyers and newlyweds were crucial customer groups for Crate & Barrel as well. In an effort to draw in the soon-to-be-married (and those who wished to lavish gifts upon them), the company had become one of the first non-department stores to offer a gift registry. By 1997, 17 percent of its sales were derived from this tremendously popular service. One of the 1998 print pieces spoke directly to this group. The spot, which featured Crate & Barrel dishes and a photo of a humble-looking church, declared that ‘‘the average person spends 26 years finding the right partner. 13 months finding the right church. 8 months finding the right caterer. And 6 months finding the right honeymoon spot. Which just may explain why the average person ends up with the wrong plates.’’ According to Jim Schmidt, MSSB’s creative director for the campaign, the ad’s use of tongue-incheek humor and visually arresting images was intended to appeal to younger consumers, an important demographic group for the retailer. While older consumers, who were at the apex of their careers and thus their earning capacities, had more disposable income, younger consumers—who were often embarking on their first housewares purchases—were crucial to Crate & Barrel’s long-term success. Brand allegiances were formed early in life and lasted for a long time, and the company that could garner a following among the young would have a significant competitive advantage.
COMPETITION
Crate & Barrel faced considerable competition. According to the Arizona Republic, ‘‘The retailing landscape [was] packed with companies trying to cash in on the home craze.’’ On the one hand, Crate & Barrel was challenged by other upscale housewares stores, especially Pottery Barn and Restoration Hardware Inc. On the other hand, massmerchant retailers had begun to offer inexpensive imitations of the items found in more expensive stores. Target proved a particularly potent adversary for Crate & Barrel in this segment. Moreover, as a furniture seller, Crate & Barrel competed against more traditional furniture retailers. ‘‘Everybody is your competition nowadays,’’ Segal told the Wall Street Journal. ‘‘The whole marketplace is more dynamic and aggressive.’’
In the realm of specialty stores, Pottery Barn primarily appealed to a younger, hipper customer. With its slightly less expensive products and dim store interiors, Pottery Barn attracted consumers with what Forbes termed its ‘‘relaxed contemporary’’ merchandise. The Swedish company Ikea AB, a chain of rapidly expanding furniture and housewares stores, drew an even younger core audience, often including college students and others furnishing their first apartments. At the other end of the demographic spectrum was Restoration Hardware, which, according to Business Week, ‘‘cannily play[ed] off childhood memories of nesting baby boomers.’’ Founded in 1979 by Stephen Gordon after he had been unable to find authentic-looking fixtures for a remodeling project, the chain evolved into far more than the average neighborhood hardware store. Pricey furniture shared the floor with mirrors, lamps, and a number of knickknacks such as old-style toys. Each store had a hardware section, but Restoration Hardware’s focus was predominantly on its housewares and furniture.
Gordon’s brainchild was also engaged in rapid expansion. At the close of 1998, 65 stores were in operation, often in close proximity to Crate & Barrel’s venues. ‘‘Their customer is our customer,’’ Bette Kahn, a Crate & Barrel representative, told Business Week.
Although Kmart Corp. had made headway into a more upscale market with its line of Martha Stewart Everyday housewares, Target was the clear leader among the giant retailers in drawing more affluent customers, those who might otherwise frequent Crate & Barrel. According to Fortune, Target’s average customer was a college-educated woman with an income above $50,000. The more than 850 Target stores had seen a 26 percent increase in sales between 1997 and 1998, and the company’s stock had risen a stunning 527 percent since 1995. Target’s success stemmed from its persistence in ‘‘always looking to have the latest things,’’ a retail analyst told Fortune. As HFN explained, ‘‘Instead of trying to copy a department store, Target’s MO has been to emulate a Pottery Barn or a Crate & Barrel, and to translate those colors and trends to the masses.’’ Designer Michael Graves offered a line of futuristic housewares exclusively at Target, which expanded the home section of its superstores to highlight such offerings. The chain also began to carry elite brands, such as the cookware line Calphalon, which once would have been considered too upmarket for Target. As part of its ongoing branding efforts, Target inaugurated the ‘‘Grab Your Own Style’’ campaign in 1998, which stressed the company’s more sophisticated image. The campaign kicked off with a 16-page insert in Bon Appetit, a food and cooking magazine that catered to older and more affluent readers. With its focus on the coordinated home decorating ideas available at Target, ‘‘Grab Your Own Style,’’ like Crate & Barrel’s 1998 print campaign, touted notions of simplicity and fashion more than individual products.
MARKETING STRATEGY
Crate & Barrel strove to forge a distinct brand image for itself with its 1998 print effort. ‘‘The goal of the campaign was to reaffirm in people’s minds that when you buy something from Crate & Barrel it is classic and timeless,’’ MSSB’s Schmidt explained. While Pottery Barn imbued its stores with a more funky aura and Restoration Hardware banked on a warm nostalgia, Crate & Barrel’s 1998 print ads stressed elegant simplicity.
Of course, to impress this message upon consumers, the ads had to be noticed. Schmidt emphasized that the executions were intended to stand out from the page in order to capture the reader’s attention. Half black-andwhite and half color, the spots were indeed striking. For instance, one piece depicted a single goblet, which was photographed to reveal every simple detail, every line, and every reflection of light from its surface. This artful presentation made it seem much more than a glass; it became an image, representing the essence of the Crate & Barrel brand.
By posing the goblet next to the scene of a snowy landscape, Crate & Barrel further refined the aura of simplicity. The ad copy humorously reinforced this notion by undercutting any sense of pretentiousness that might be conveyed by the photo: ‘‘It’s the time of year when we raise a glass to our family and to our friends. To our pasts and to our futures. It’s the time of the year when we raise a glass to our dreams and to our hopes. In short, it’s the time of the year when there’s a lot of pressure on a glass.’’ Segal explained the principle underlying Crate & Barrel’s advertising (as well as its store presentation) to HSN: ‘‘To be a good retailer, you’ve got to have that theatrical ego-centricity. You’re setting an atmosphere and the architecture.’’ Crate & Barrel ran the pieces in publications that were read by the upscale, home-oriented audience it sought. These included Martha Stewart’s Living and Metropolitan Home, as well as the Sunday magazines of the New York Times and the Chicago Tribune.
The timing of the 1998 print campaign was also carefully calculated. Unlike some other industries, housewares retailers did a substantial portion of their business during the holidays, when consumers purchased new items either for their own entertaining or to give as presents. The campaign therefore debuted in October and ran through this peak period. In addition to the goblet piece, Crate & Barrel employed the holiday theme in an ad that portrayed three stockings stuffed with wrapped packages. Above another snowy scene, the copy expressed every parent’s Christmas reality: ‘‘5:05am: Can we go downstairs now? 5:10am: Can we go downstairs now? . . . 5:34am: Can we go downstairs now?’’ The spots featuring the company’s tables and chairs stayed away from holiday motifs, however, since furniture sales tended to be less seasonally sensitive.
OUTCOME
By all accounts Crate & Barrel’s 1998 print campaign achieved impressive results. According to MSSB’s Schmidt, the company’s sales during the holiday shopping season rose between 5 and 10 percent. The ads were also praised by advertising critics. In addition to being recognized at several Chicago awards shows, the campaign was ranked among the year’s best by Communications Arts. Nonetheless, because of the business cycle in the housewares industry, Crate & Barrel ended the campaign at the close of the holiday season. In April 1999 Crate & Barrel switched ad agencies, settling on Tucker Tapia. Its new campaign, launched that month, returned to the more product-focused style of earlier Crate & Barrel ads. The theme of this effort was the Crate & Barrel ‘‘cocktail,’’ in which large pieces of furniture were paired with small housewares. In one, for example, a sofa was shown on end balanced on a martini glass. The company also anticipated returning to television advertising in the fall of 1999 after a two-year hiatus.
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