Ethan Allen CEO: Brick and Mortar by Itself is Not Relevant

Ethan Allen CEO Farooq Kathwari made a bold point for a furniture retailer in a recent interview, following their quarterly earnings announcement: Brick and mortar by itself is not relevant.

“Today we know that brick and mortar by itself is not relevant unless you are in a position to provide service,” Kathwari said. “Providing an interior design service is a great advantage and that’s what we are focused on.”

Kathwari says the key is to use online not just for sales but also for customer outreach.

Farooq Kathwari, chairman, president, and chief executive officer at Ethan Allen talks about how the company has made brick and mortar relevant again:

Brick and Mortar by Itself is Not Relevant

I discussed in our earnings call about the fact that today you have to differentiate yourself. You have to be in a position to be relevant. We have at Ethan Allen 1,200 interior designers that work for us in North America and about 500 internationally. We have 200 design centers. These 200 design centers are like brick and mortar.

Today we know that brick and mortar by itself is not relevant unless you are in a position to provide service. Providing an interior design service is a great advantage and that’s what we are focused on.

Less than 5 Percent of Sales are Online

We absolutely are trying to appeal to millennials online. However, our online strategy is a bit different. We have today over 600 of our interior designers chatting online. So we are online. Our designers are working with clients and then bringing them into the design centers because we want them to see the product. We want them to experience it because this is not selling small stuff or toys, this is a serious purchase. Our online is very active and we are bringing people in.

Our advertising is more in the traditional mediums and the digital mediums. We spend a fair amount on direct mail to about 2 million households a month. Digital mediums are strong. A combination of the two is very relevant. One has to do that.

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