Williams-Sonoma: Omnichannel Execution & Markdown Discipline

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Exactly. For example, if you have a region where you don't have a store, and in this catchment area, you would, let's say for simplicity, generate a million dollars in sales per year. Then, if you open a store, what would happen to this million dollars in sales?

For the most part, I think we would be able to drive even more business out of that market. We would have the success from the store business driving sales. That's what I loved about the Williams-Sonoma Inc. brands, especially Pottery Barn. It was very dynamic. Both the store and online business worked together to drive sales. The stores helped drive the online business by giving guests an opportunity to see the products, and vice versa. The online business directed guests back to the store for services like design services, in-home services, or in-store appointments. I think it balanced out, and that's where the success came from—the dynamics we built between both.

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You mentioned moving products around efficiently to avoid markdowns. Could you explain this in more detail? I didn't quite understand it.

Once we started implementing many of the Omni-channel strategies, like buy online, pick up in store, or ship from store, we saw significant business growth. For example, after Black Friday weekend and Cyber Monday, during Cyber Week, we noticed a lot of business through ship from store. This happened because online might have been out of stock, so the item would be shipped from the store to support the online sale. This allowed the product to be sold at the current selling price instead of being marked down, as the company would capture the sale either online or in-store. It was an effective way to minimize markdowns at the end of the season.

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