Pirch retreats from retail with new membership program

Dive Brief:

Pirch on Wednesday announced a new loyalty program for members of the architect, builder, contractor and interior design trades, dubbed the Pirch Black Trade Loyalty Program, according to a press release emailed to Retail Dive. There are no fees to members, according to a Pirch spokesperson.
The loyalty membership includes trade pricing, B2B incentives, an exclusive partner website and special access to events and spaces in showrooms, including private rooms for meetings with clients that will only be available to Pirch Black members, a Pirch spokesperson said.
The retailer calls the new program, unveiled during a celebration at the company’s flagship Costa Mesa showroom on Thursday, a cornerstone of its 2018 strategy and follows the closure of six of its 10 locations in September, all outside of Pirch's California home base. Remaining showrooms are in Costa Mesa, Glendale, Rancho Mirage and San Diego, according to the release.

Dive Insight:

Pirch, a poster child for today’s brick-and-mortar goals, appears to be backing away from retail. The company’s showrooms — the word now being used instead of "stores" — are a retail playground of sorts that allow shoppers to try out working appliances and watch chefs prepare food using more than a dozen kitchen equipment displays. Unlike in typical big-box showrooms, water flows from faucets and flames flicker on stoves. Some customers famously took showers in the showroom to test out fixtures.

The retailer garnered numerous awards for the effort, but that wasn’t enough to keep it going outside of California where the core customer base includes architects, builders and interior designers who return for multiple clients. Those professionals would send their clients to check out Pirch's stores, and enthusiasm grew among consumers from there.

By contrast, the purchase volume among even enthusiastic retail shoppers elsewhere wasn’t enough to balance the expense of having working appliances and chefs demonstrating high-end stoves, the company said. The more than 100 banners Pirch sells include pricey brands like Bertazzoni, California Faucets, Jenn-Air, La Cornue, Gaggenau, Kallista, Kohler, Miele, Sub-Zero, Wolf, Thermador and Viking.

Most of the stores Pirch closed last year — in Dallas, Chicago, Austin, Paramus, NJ and Atlanta — were in malls, which are less likely to cater to design professionals. And the store in New York’s SoHo neighborhood appealed to consumers first and the trade second — which proved to be an ineffective strategy, the Pirch spokesperson told Retail Dive.

Pirch’s move to focus more on the design trade — turning to middlemen to foster sales — can be seen as a pivot from retail and signals that these high-end experiences come with a cost. But the retreat doesn't necessarily indicate a flaw in its method, insists retail prophet Doug Stephens, author of "Reengineering Retail: The Future of Selling in a Post-Digital World."

"I still believe that Pirch was, and is, directionally correct in their approach," he told Retail Dive in an email. "There simply has to be a better kitchen and bath shopping experience than the big box. I think they came to realize that such an elaborate and immersive retail environment, coupled with high prime real estate rental costs, is difficult to scale, especially given that their assortment is aimed at a relatively thin segment of the high-end market. As they say, 'the pioneers take all the arrows,' and Pirch stores were ambitious retail productions."

The utility costs of forging such a high-level experience make the decision to regroup and refocus their efforts on the professional segment a smart one, he also said, adding: "But I doubt we’ve heard the last of Pirch on the consumer side."