How to Create Experiences and Leverage the Brand

This content relates to : MARKETING INNOVATION

Gary Friedman

CEO, RH 

The Snyder Innovation Management Center presents the 2021 CEO series focusing on innovations in the retail sector in partnership with The Robin Report.  

brand

Robin Lewis, founder and CEO of his namesake brand, the Robin report interviews Gary Friedman, CEO of RH, for this exciting forum. 

Robin Lewis:  Gary is a true visionary who has totally recreated the original restoration hardware brand. To the RH reflection of home life indoors and out. If you have ever been in a RH gallery, you know that you’re not in your grandmother’s home store anymore. And this talk between us is going to be great. And it’s, it’s, it’s about your favorite past-time in life. The whole ecosystem of the brand RH. And it is not just about stores, quote unquote. How about an experience like no other? Or getting all romantic or magical moments. You know, the lighting, the design and the journey through what are now being referred to as galleries, not stored, have all been created to communicate luxury, elegance, and a good life. It’s, it’s actually a brilliant example of using space and transforming it into an experience that really inspires upgrading your life shows both New York and Napa Valley galleries, okay. Both have a similar experience, but they are custom created enough they’re localized for the different regions they are in and essentially Gary and RH is a terrific example of localization where the store reflects its community customers in their lifestyles original restoration hardware as a quirky, do it yourself. Fixtures, catalog for people. restoring Victorian houses to the leading luxury home brand in the world. Market cap approaching $10 billion. I would say that’s a pretty incredible story.  

Gary Friedman: One of the things I was lucky about was, you know, I kinda say i’m, I’m looking for a few good people that don’t know what can’t be done. And I was, I was one of those people. I, you know, I was naive enough not to know it couldn’t be done. I didn’t have I wasn’t a victim of my own history yet and it’s sometimes I think about I think about it today, Robin and I and I say if I knew what I knew today, when I have taken that role at RH, would I have invested basically all the money I had left. And what I’ve taken that risk and I actually think I might not have. And just so, you know, there’s, there’s something about experience that I’d say to the students, that there’s, there’s experiences, everything about the past and it’s, it’s not a lot about the future, right? And the future is about vision. And I really say, which I say, don’t be victims of our own history and, and the ideas of the future don’t exist in the past. But the, but the clues do. And some of the ideas do, you know, some of the dots exist. And so, so I really think about it. I would’ve probably said No, that’s too big a risk. You shouldn’t do it yet. It’s been the greatest ride of my life. And I’ve learned so much and I’ve evolved, evolved so much. And I don’t think that would have happened to me in a safer place if I would’ve stayed at Williams Sonoma, would I have been successful? I believe I would’ve I was successful when I was there. But there’s something about venturing into the unknown. And I think that as humans, we really don’t know what we can’t do. And so I’d say to the students, look, don’t be afraid to jump in the deep end. You’ll want to learn quickly. Take on the biggest challenges and the biggest risks you can. And, and when you think that you can’t figure it out, there’s always another move. There’s always another way we almost went bankrupt here. At least a dozen times.  

Robin Lewis: So Gary take us through, you know, what you call your immersion in multidimensional vision and where you currently are in building it.  

Gary Friedman: Sure, Sure. So maybe before I start with the what, let me start with the why, why are we doing it? Why are we doing it? And I’ll get, I’ll get into the, the, the what of what an ecosystem is. So the way we think about. Our, our brand is, is, is we like to say we know what is the core of what we do, what is the, the one thing that we have to do so well, that, that no matter what it gives us a chance of succeeding and that is we sell product, right? If we start with that, that’s the only place we generate revenues and and we’ve architected accompany. That is what we call a product leadership model. Where the product is at the center of everything we do, not the customer. A lot of people talk about being a customer centric company today. And I think that that might be a good strategy if you’re, if you’re selling toothpaste and commodities and toilet paper and stuff like that. But when you’re when you’re really in a business like ours, you know, you’re, you’re kind of selling desire and you’re, you’re, you’re inspiring people. 

And consumers. Consumers don’t really know what’s next. They don’t really know what they want until they see it, you know? And it’s like there’s a famous quote from Henry Ford that he said If I asked my customers what they wanted, they would’ve told me a faster horse. Right? And and so so we’re kind of a vision led company. And, and so, so the, the, the idea, the central idea that we built around is that we are product leadership company, that is what we sell. And we’ve architected a company around, around product leadership and everything that we do. And everyone that works here has to have a framework and a lens that says how am I contributing to kind of elevating, amplifying, and rendering the product more valuable. So people asked me, they said, Oh, you’re building these big stores and it’s going to tell me why is that? Well, we have a big product assortment and that the galleries are designed to amplify and render the product more valuable, right? 

Our delivery service and customer experience is designed to amplify and render the product more valuable. Our interior design services are, are, are, you know, they’re, they’re, they’re architected to amplify and render the product more valuable. And so everything starts with that core. And everything is designed to amplify that core and, and render it more valuable. And, and it’s, and it’s hard by the way, when you, when most of the time in the world when your, your, your additive, you’re generally dilutive, right? You try to do more, you’re actually doing less. And this, yet the simplicity of knowing what’s really important, right? Like all of a sudden, when, when functions and capabilities and systems become more important than the core, or they become they become equal to in efforts and focus. What can happen is you can, you can actually shrink the core. It becomes less relevant. There becomes a, a battle in a competition for resources, a battle in a competition for time. And, and then you, you want, you wind up diluting the focus on what is the one reason people, you know, that you exist.  

So I kinda relate it to, you know, we all go to restaurants, right? So this everybody can relate to this. It, it doesn’t, it doesn’t matter as much how nice the waiter or waitress says. It doesn’t matter as much. How beautifully designed the restaurant is if the food sucks, right? And so if, if the food sucks, you just don’t go back. And and and I think that a lot of times I observed businesses where they, they, they make things important that other people are making important in humans, I always say that we were creatures of habit. From the time we’re born, we’re taught to conform. We’re taught to conform to other people’s thinking, to conventional wisdom, were taught to, you know, look at the stars, not reach for the stars.  

So we tend to be comfortable looking for best practices as opposed to next practices and people start talking about, you’ve gotta be a digital first company and then everybody starts focusing on that. Are, you know, if you went back to the early 2000s, the re-engineering re-engineering movement or yeah. I’m old enough that I’ve seen all these different phases and and generally, you wind up with consultants kinda coining something in marketing it to the world and then everybody starts fall following it and, and they lose focus on what, what is really at their core. What is the truth of that business? What is the bane of existence? And they start, they start working on, you know, people start working on, on working real hard on, on kind of the fringes of a business or the secondary, tertiary pieces and they don’t work on it in the right order. So I don’t care how great you become with the digital platform today. I don’t care how much. You know, AI, AR, or VR or virtual reality, artificial intelligence and all that stuff you have. If you don’t understand the core of what, what you’re doing, if you take your focus off, off that, you’re just not going to win.  

You know, there’s so many retailers today that have invested it. Tens of millions, hundreds of millions of dollars. And, and forgotten, forgot what, what they’re really serving the customer systems don’t simplify, they amplify. And people have a lot of time think, well the systems the answer or this is the answer. And now humans are the answer. Humans conceptualize ideas. Humans create visions. Humans can translate the vision into a strategy. And what you need to do is you need to have that vision. You need to architect your strategy. And then once you know what you’re doing, you can, you can, you can, you can amplify it with systems, right? But, but, but you’re not going to win with systems. Jeff Bezos didn’t win and build Amazon based on a system. He built it based on a vision. And we’re trying to build, you know, what I think about is the first kind of fully integrated luxury home brand in the world, right? Some of the ones that are, that are kind of luxury brands are kind of isolated product categories, you know, and, but no one’s really has a fully integrated, yet fully assorted in integrated brand. The luxury as part of the market today. And if you think about when I refer to that luxury mountain, I refer to as having a climb the luxury mountain in the luxury brands in the world. All the ones I know they were all born at the top of the mountain, right? If you think about, yeah, Hermes, Chanel, Louis Vuitton, like Tiffany, Gucci, like biliary, and name any category, any, any kind of brand. They were always luxury brands are born at the top of the mountain. We, we, we were born at the bottom of the mountain. In fact, we were born underground. We’re almost dead, right? So we had to dig ourselves out of a grave and then we were trying to make an ascent up a mountain that no one’s ever made.  

Yeah. And we’d like to say, you know, if you, if you if you weren’t born into royalty, you have to earn it, right? And so the people at the top of the mountain, they don’t really want you to make that climb, right? And you’re not from the neighborhood, you’re not invited to their parties, right? You’re not invited to their parties. So you have to do work that is so extraordinary that you create a forced reconsideration of your brand. You force people to see you differently. You force people to respect you, right? And, and respect is the most important aspect of it, right? And, and we say we want to build one of the most admired brands in the world. And, and, you know, and, and, and what do you have to do to be admired? Well, you have to be respected. You just can’t, can’t get pass it. So the, the pieces of the ecosystem, many of them are designed to create a forced reconsideration of our brand to, to respect us.  

It’s like a different way to communicate. In this world. We don’t have a marketing department, we have a truth group because we say it’s not what we say, it’s what we do that defines us, right? We, we don’t have Instagram, we don’t have Twitter, we don’t have Pinterest, right? Because honestly, we don’t like to spend a lot of time talking about our health. We spend our time working on our vision. And, and so yet, even though we don’t have Instagram, we don’t have Twitter, we don’t tweet, and we don’t pin anything where the most my Instagram weren’t the most Instagram brand of our kind in the world, were the most tweeted brand of our kind in the world and we’re the most pinned brand of our kind in the world, because we focus on doing extraordinary and remarkable work and what I’ve learned in my career.  

You can monetize extraordinary and remarkable. It’s very hard to monetize. Ordinary and unremarkable, right? So say these pieces, that ecosystem, we’re going to talk about the ecosystems, our products, places, services and spaces, and the units are you’ve got a consumer guarantee for pillar? Yeah. Yeah. Yeah. Yeah. Yeah. Products place IT services and spaces. And so the products are the things that people can see today. There are  RH interiors, RH contemporary which is coming this fall. RH modern, RH baby child teen, RH beach house, RH ski house, RH outdoor, and so on and so forth. Right. And soon to come RH color RH RH, coach or upholstery, RH bespoke furniture. We have many things in the pipeline, right? That that’s the product piece of it. That the places are galleries, are guesthouses, our restaurants, and our residences, right? And so those are our places and all of those places are designed to kind of amplify and render the product more valuable or amplify and render the brand more valuable, right? How do they see us? Do each of those things? Do they, do they actually render us more or less valuable? And so to, to do that and to kind of put, to take, earn the respect to keep climbing up that mountain where the air gets thin and the odds get slim, right?  

You have to do work that is so extraordinary and so remarkable. What we did very early on is we were the first retailer in America to put an iPad in the hand of every one of our associates. And why did we do that? Not just to be try to be cool and they have fancy technology. It’s because we put we put the entire assortment in the palm of each of our associates hands and they could sell from the assortment, the entire assortment, not just for the store assortment. And we didn’t care who got credit for the sale. Right. And so so so to us, it’s, it’s not, it’s not about the channels. It is about the product and the consumer experience. They can experience our brand from a food and wine and art and design experience. And they can see us like our restaurants are designed based on our design ethos are everything that we do is, is, you know, got a similar kind of view of how we believe the best design is reflection of human design.  

It’s a study of balance and symmetry and perfect proportions and the golden mean. And you know, and we kind of abide by the rules of Vitruvius, right? Where, where beauty exists in the, in the, in the integrated design of the whole, right? And, and so we create these experiences that reflect our design ethos and communicate what we’re about, right? And so we, we spend very little money on marketing, on advertising and at doing things like that. We try to focus our money and on creating great experiences and great reflections of our brand. And really, you know, it’s, it is our truth, right? So we’re just trying to put our truth out there and, and yeah, and let people experience it and so on. That, that’s the logic behind it.  

Gary Friedman 

CEO, RH 

https://rh.com/