Pier 1 makes the web a higher priority

Two years into its web comeback, Pier 1 CEO Alex Smith says efforts to grow e-commerce to 10% of revenue are accelerating.

Mark Brohan

Three years into its e-commerce comeback, the web will soon take on a higher priority for Pier 1 Inc., CEO Alex Smith told analysts on the company’s recent year-end earnings call.

For the 2014 fiscal year ended March 1, Pier 1 reported:

Pier 1, a housewares and home furnishings retailer that at one point ranked as No. 298 among the Internet Retailer Top 500, stopped selling online in 2007, blaming weak results and other restructuring priorities. Under the direction of a new CEO, Pier 1, reintroduced e-commerce in August 2012.

Now with a budding e-retail operation, Pier 1 has set a goal of the web accounting for 10% of sales by 2016, Smith told analysts on a recent earnings call. “We are well on track with our goal to have 10% of our business coming from e-commerce by the end of fiscal 2016 as set out in our three-year growth plan,” Smith told analysts. “Although we have not yet fully realized the efficiencies of scale and experience, we can already see that our online business will at the very least be as profitable as our stores.”

To hit its e-commerce growth target Pier 1’s plans for the current fiscal year include tying its 1,000 stores more closely with its web channel. While not releasing many specifics, Pier 1 is deploying more web-enabled computer tablets that enable store employees to place web orders if a shopper can’t find an item in a store. “We plan to make ordering from Pier1.com even easier in the stores,” Smith said. “We have been piloting the use of tablets in-store and plan a rollout during fiscal 2015. Our ability to leverage our stores in this way is a significant competitive advantage.”

Web shoppers who spend time in a Pier 1 store generate more business than those who only shop in stores, Smith told analysts. “Customers who shop Pier 1 Imports both in-store and online spend nearly four times as our average in-store-only customers,” Smith told analysts. “When we can convert our customers to in-store and online and engage them through our loyalty program they spend even more.”

To facilitate faster order delivery, Pier 1 is looking at opening another web-only distribution center, although the company didn’t provide many details. “We have brought forward the building of our second fulfillment center by a year,” Smith told analysts. “Our new facility in close proximity to our Columbus, Ohio, distribution center will be operational in the fall of this year, freeing up capacity and giving us redundancy.”

To attract more shoppers, Pier 1 plans to increase its selection on Pier1.com over the next year by 29.4% to 11,000 SKUs from 8,500 SKUs during the next fiscal year. “We are planning to quadruple the number of SKUs available online,” Smith said. “Our e-commerce side provides a highly efficient method for increasing our assortments and testing new products and categories such as bedding. This year our customers will see expanded sizes and colors in rugs, wall art, mirrors and wall décor among others. She will also see additional sizes, functions, and colors across all furniture categories, including an expanded assortment of outdoor furniture and textiles.”

Pier1.com remains a work in progress that will require an even bigger corporate commitment if the company is to generate 10% of revenue online in two fiscal years. “We are proud of our web site, but also realistic,” Smith told analysts. “We know we have much to add in terms of functionality and also need to make sure that our site is as attractive on tablet as it is on PCs. These are all priorities.”


Alex Smith, online and in-store shoppers, Pier 1, Pier 1 2014 earnings, Pier 1 2014 web sales, Pier 1 Imports