The Strategy Behind Williams-Sonoma's Global Expansion

In an effort to tap into the $532 billion global marketplace for housewares and home furnishings, Williams-Sonoma, the San Francisco-based omnichnannel retailer, took its business beyond its domestic borders. In a session yesterday at NetSuite's SuiteWorld conference in San Jose, Calif., Rob Bogan, vice president of international systems for Williams-Sonoma, discussed the brand's experiences going global.

At the center of Williams-Sonoma's international strategy was building out robust e-commerce sites for customers in Australia and the U.K., the two countries the retailer targeted first for its international presence. Helping with this mission is NetSuite, a provider of cloud-based software suites, with whom Williams-Sonoma partnered with to be the platform for its international sites. Specifically, Williams-Sonoma is using SuiteCommerce as its multichannel platform. The retailer has also opened brick-and-mortar stores in Australia and the U.K.

We sent out an RFP for what we called "retail in a box," Bogan said, noting that Williams-Sonoma wanted to expand internationally without cost crippling the company. He said that the company's domestic platform was too expensive to develop for international sites. In addition to cost, time to market was a critical consideration for Williams-Sonoma in choosing its web platform. We knew there was money to be made here, Bogan said in regards to Williams-Sonoma's international expansion, but the company needed to move quickly to seize the opportunity. We couldn't spend two years developing our own web platform and miss the opportunity at hand, Bogan said.

Within 100 days of signing a contract with NetSuite, Williams-Sonoma launched four websites in Australia; the U.K. was next. The retailer chose those two markets for a number of reasons — it scored data by country, including which international visitors were shopping on its domestic website and in its U.S.-based stores; population and market size; and it wanted to launch in English-speaking countries first. After its market analysis, Australia and the U.K. became the top targets.

Williams-Sonoma is using SuiteCommerce for a number of business functions for its international business, including product procurement, logistics, reconciliation, financials and point of sale. Sites that are live in the U.K. and Australia include Pottery Barn, Pottery Barn Kids and West Elm; the Williams-Sonoma brand site is live in Australia only.

We were looking for an integrated commerce platform to support an end-to-end customer and commerce relationship, Bogan said. NetSuite has helped Williams-Sonoma accomplish that.

Lessons Learned
Bogan looked back at some of the lessons Williams-Sonoma learned from its initial venture into international commerce. Here's a rundown of those lessons:

• Cross-dock: Williams-Sonoma struggled with maintaining accurate inventory tracking. For example, products were being sold in-store that weren't entered into the inventory system, leading to negative inventory counts.
• Product assortment: Bogan conceded that Williams-Sonoma didn't do enough market analysis to determine the best products to sell in the U.K. and Australia. He cited an example of poor sales for backpacks in Australia. What the retailer didn't know was that children in Australia are provided free backpacks.
• New peak seasons: Boxing Day wasn't on the radar of Williams-Sonoma when it was just selling domestically, Bogan said. That changed when the retailer opened stores and a website in the U.K.

Other lessons learned included a lack of brand awareness, working with new vendors, working with new builders for its brick-and-mortar stores, finding third-party providers for fulfillment, and differences in product testing standards. Every market has it nuances, Bogan said.

What's Next?
Williams-Sonoma has plans to expand into more countries — Bogan wasn't willing to disclose where just yet — with both brick-and-mortar stores and e-commerce websites. In fact, it's in the process of opening new stores in Melbourne and Sydney, as well as more brand websites in the U.K. The websites that are already live in those markets will be getting more functionality as well. For example, the U.K. and Australian sites recently added a gift registry feature, and a better allocation system for in-store inventory is in the works.