Inside upscale furniture brand Mackenzie-Childs’ DTC strategy

Furniture and home decor brand Mackenzie-Childs is focused on building a direct-to-consumer model to grow its customer base.

Currently sold through high-end retailers like Neiman Marcus and Williams-Sonoma, the luxury brand is investing more in its e-commerce site and store network. While the company isn’t cutting off wholesale partnerships, it’s realizing, like many consumer retailers, that digitally acquired customer data through a DTC model is an engine for growth. It’s become a go-to pivot for brands as they address the limitations of the wholesale-only model: limited data visibility, a less concrete customer connection, and a lack of access to people who prefer to shop online.

“It’s less about using the web to change the way we’re doing things, but it’s one of the [legs] of the stool,” said CEO John Ling. “You need to be good at all [channels]. As a retailer, we can’t decide where the customer is going to shop — you need to be accessible to them in all those different channels.”

The 35-year-old brand, which has three physical locations in the U.S. and a dozen partner-operated stores in global locations including the U.K., Turkey and Russia, depends on real-life interactions. Customers want to see and feel the products in stores and at events like the brand’s annual farm sale at a flagship upstate New York location.

Though the company has sold online for 13 years, it’s been investing in e-commerce technology and new hires for the past two years to get a better view of customer behavior and improve the online shopping interface. It revamped its website, optimized the site for mobile shopping and devoted a larger percentage of its ad spend to digital and social campaigns to drive traffic to the site. Through the new website and backend system, the retailer now draws on customer analytics to personalize offers, reach out to customers who may have abandoned their purchases, and grow the brand’s reach among a digitally native population who are less drawn to physical stores.

“Throughout all the different channels [online and at physical stores], we’re in the middle of upgrading all of our [customer data] systems — we’re building a more robust customer database tool that will allow us to track customer orders, and behaviors,” he said. “We want to evaluate the intersection of the customer and product — we don’t just want to know what product they’re buying but what they’re doing with the product, how often they shop and what products they buy together.”

Going DTC offers a data advantage over operating through partner retailers. Ling, who wouldn’t comment on specific sales numbers, said e-commerce is the fastest-growing part of its business, with “double digit” growth. The retailer also sends a physical catalog to a limited number of active customers — an outreach that’s only possible through a study of customer data. But phone orders are declining — just 10 percent of orders are now carried out over the phone, a 20 percent dip compared to three years ago.

Meanwhile, the brand’s physical stores will also play a role is marketing channels in order to better communicate the brand story to customers. Enhanced data will only make the in-store experience more relevant, Ling said.

“The brand is just so visual and so tactile — it’s important to put that out in front of the customer,” he said.

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While Mackenzie-Childs doesn’t sell on third-party marketplaces like Amazon, it’s considering how it may incorporate them into its DTC strategy. The challenge is to maintain the distinctiveness of the brand while owning the customer experience.

“Our products are on there sometimes due to unauthorized sellers,” Ling said. “We don’t believe we can ignore it, [but] once you get into that, you’ve got to get it right.”

One concern from selling on third-party marketplaces is ensuring the company can meet the demands of millions more customers. And while these marketplaces can grow, the customer base through its massive scale, not fully owning the customer data and analytics remains a disadvantage, Ling said.

Despite this risk, third-party e-commerce marketplaces may still offer a window into customer intent that can go further than that which can be obtained through the traditional method of sourcing to retailers’ shelves. Selling on third-party marketplaces like Amazon also offers a marketing lift for a legacy brand that can make it appear more tech-forward, said digital marketing consultant Judge Graham. The trend among brands going DTC — either through third-party marketplaces or its own e-commerce sites — is a wake-up call to retailers to offer brands more access to customer data and analytics, he added.

“We’re slowly getting into a world where the Neiman’s of the world are going to have to put down their walled gardens and be a bit more collaborative with customer data as it relates to those brands,” he said. “Retailers need to flip the script and get on board.”

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