RH Transcends Retail With Residential Hospitality

RH Transcends Retail With Residential Hospitality

RH Transcends Retail With Residential Hospitality 1440 428 Chute Gerdeman

When you stand back and think about shopping for furniture, it’s a lot like shopping for a car. It can be a big commitment in terms of making a decision, it’s likely an investment, and honestly, you’re hoping it’s going to last a while. With infrequent purchases in the category, its forced brands like RH (formerly Restoration Hardware) to rethink the retail experience to increase store traffic.

Residential Hospitality

Blending retail, home, and hospitality the luxury lifestyle furniture and home decor brand launched RH Chicago, The Gallery at the Threes Arts Club in 2015. The 100-year-old, 70,000 square foot space had been defunct for more than 20 years. Previously serving as a home for young women studying music, drama, and the visual arts, RH wanted to bring it back to life, revive the elements of art, and tell a new chapter.

“We found this building to be the perfect environment to reimagine the retail experience and introduce a level of hospitality never before seen in a store, welcoming guests to an inspiring setting where they feel at home,” says RH chairman and CEO Gary Friedman.

Courtyard
Courtyard
Courtyard

The entry courtyard with running fountain and natural lighting streaming in from overhead sets the tone for a grandiose, luxury experience. From there, guests can explore the culinary arts in the exquisite café and wine tasting room operated by restaurateur Brendan Sodikoff, who is well-known for highly acclaimed Chicago restaurants like Au Cheval.

living room setting
Living Room
Bedroom

The five floors above serve as a place to see, touch, and immerse oneself in the different home settings, and spotlight RH’s newest additions RH Modern and RH Teen. A series of design ateliers encourage the attention from everyone from expert interior designers to curious home renovators, and the rooftop garden welcomes the perfect city view.

Design Atelier
RH Modern
Rooftop

A Design Evolution

While the Chicago location has been open a few years, the brand has since opened similar gallery experiences in West Palm Beach, Toronto, and soon a flagship in Nashville. Even more interesting though is what they’ve been busy working on behind the scenes that is worthwhile to note. Rather than being complacent with a delightful customer experience, the brand has been actively busy studying retail productivity and space investment. During a recent Q4 earnings conference call, Friedman discussed they had discovered a gallery design format that they believe would yield the most productivity and integrate all of the businesses in a single footprint. The current gallery spaces like RH Chicago with 54,000 square feet of selling space showcase 50% of the brand’s product assortment, where typical retail stores with only 6,000 to 7,000 square feet of selling space feature just 10% of the assortment. The new footprint will be half of the Chicago design gallery with 29,000-33,000 square feet of selling space but the same volume of assortment since they’ve just figured out how to optimize the environment with an efficient design.

rooftop
RH Teen
RH Modern

The design evolution hasn’t just been about the square footage or percentage of assortment though; RH has also been testing elements of the entire customer journey. In the Chicago gallery, the café on the first floor initiates energy as guests arrive, whereas in West Palm Beach the rooftop restaurant draws people up through the space exposing them to the product along the way. The brand initially questioned the placement of the rooftop restaurant, but it’s now their highest performing hospitality experience drawing more than $7 million in its first year.

RH has described these first 15 galleries in major metropolitan cities as an ongoing experiment over the past five to seven years, with the belief that they now have a stable position and format that will serve the majority of the market.

As more brands look to add a service or hospitality component to the retail experience, it’s going to require an understanding of principals and best practices from other industry categories.

Want to learn more about retail brands shifting focus from commodity products to an amenity approach? Check out our article, “Brand Extension: The New Hospitality Lifestyle.”

HOW WE THINK SETS US APART

A collection of insights research and observations across retail, restaurant, c-store and grocery. Helping brands provide a better experience for their customers. Enjoy.

Be the first to know about the latest POV releases. Sign up for The Gist quarterly newsletter.

CHUTE GERDEMAN
455 South Ludlow Street
Columbus, OH 43215 USA
+1 614 469 1001
sign up for The Gist quarterly newsletter
Our website uses cookies in order to optimize the experience. By continuing you agree to our use of cookies.
Privacy Policy