Restoration Hardware — a classier way to discount?

Adriene Hill Mar 29, 2016
HTML EMBED:
COPY
Restoration Hardware is offering discounts on customers' purchases through a new membership program. Todd Williamson/Getty Images For Restoration Hardware

Restoration Hardware — a classier way to discount?

Adriene Hill Mar 29, 2016
Restoration Hardware is offering discounts on customers' purchases through a new membership program. Todd Williamson/Getty Images For Restoration Hardware
HTML EMBED:
COPY

The furniture company Restoration Hardware is trying to boost revenue by moving away from regular, loudly hyped sales, to a paid-for membership program. For $100 a year, members get discounts on all of their purchases.

Restoration Hardware’s CEO, Gary Freidman, told investors last month, “much of how we behave promotionally is left over from the Great Recession.” He complained about spikes in volume at sales time, high numbers of cancelled orders, and the impact of sales on the brand’s high-end image.

The membership program is the company’s solution to classing up discounting.

“It’s not what I would call a membership,” said Kit Yarrow, a consumer psychologist at Golden Gate University, “ it’s more like a paid discount.”

Retail analyst Carol Spieckerman said it’s a strategy that could work by playing on customers’ desire to get the most out of their $100 buy-in, “getting them to say, I’m just going to stay here. I’m going to buy things at Restoration Hardware that before, I wouldn’t have bought there.”

But the value may be limited. Because how many thousand-dollar dressers does a person really need?

As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.

Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.

Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.