Keys to retail success: A master class with Crate and Barrel Co Founder Gordon Segal

Segal's recent comments come ahead of his appearance at Future Retail, an international retail event being hosted in Dubai between 5 and 7 November under the patronage of the Dubai Events & Promotions Establishment.

The two-day conference and workshops will share progressive approaches to successful retail in changing and evolving markets.

Speaking for the very first time in the city, Segal's highly anticipated keynote interview will look at the challenges faced by retailers in today's climate.

"I'll reveal how our journey changed the way Americans view house wares and transformed the American retail environment for good."
Source great products and offer great prices: Gordon claims to have slipped into opening a retail store. But right from the beginning, he and wife Carole had a clear purpose: to deliver great products at great prices. Back in 1962, they observed that "great looking products", then principally home-textiles, china and glassware, "were less expensive in Europe and the Caribbean than in the United States " - their home market. This insight shaped their business model. While competitors would source products from wholesalers at the New York Gift Show, they went direct to manufacturers. The result - "offering products at really good prices and with terrific style" - launched a global business and has sustained it ever since.

Showcase products beautifully but cost-effectively: According to Gordon, he and Carole and their first hires had an innate sense of how to display and sell products.

"Stores were made abundant and full of colour" at minimum cost. "Extreme frugality" meant displaying products on the upturned crates and barrels used for transport across the Atlantic and even surrounding products with their woodchip packaging.

This was both inexpensive and reinforced the company's strongest competitive advantage: offering stylish products sourced directly from overseas at great prices. Cleverly working this concept into the company name - Crate and Barrel - built brand identity, and also helped to reinforce core business values that Crate and Barrel holds dear to this day.

Know and delight your target consumers: Gordon and Carole have always had a clear vision of what their company should deliver to customers. Gordon said: "We sensed that, if we could bring good, mostly Scandinavian, design at good prices to young couples starting out, just like ourselves, we would do well."

With targeted products, good pricing and pleasing displays, "We managed to create a counter-culture store that after six months became a popular destination at weekends for trendy twenty-somethings. Our goal of pleasing our core customer base has not changed over time."

Hire, promote and reward excellent sales staff and imbue all with a sense of purpose: Staff retention is an on-going problem across Middle East retail. According to Acuity Middle East Retail Director Richard Adams, low wage shop-floor staff working for value retailers typically stay with a single employer for two to three years. Retention rates are higher in the luxury sector but even luxury players struggle to hold onto well trained staff. This standard is not high enough for the Segals: "Successful retailing companies are built on successful employees. Hire good sales people who can become missionaries for the brand. And be loyal to staff. Retailing is a people-compassionate business."

Build commercial partnerships not just commercial relationships: From the outset, the Segals had a strong relationship with their vendors. If vendors became over-priced "they were given a choice" and not simply dropped out of hand. As Gordon remarks, "Our job was not to find cheap product but to find beautiful product that was affordable". Good commercial partnerships have also helped Crate and Barrel to expand. In 1998, the company sold a majority stake to the German retail conglomerate, the Otto Group. "This provided capital needed for expansion" but also brought into the company a "smart partner with the necessary skills in direct marketing." Direct marketing sales surged from 8 to 28 per cent of total sales between 1998 and 2008. Similarly, Crate and Barrel's decision to expand into the Middle East "had a lot to do with the Al Tayer Group. They told us that there were lots of people setting up home here and how to access them".

Embrace new sales channels: Gordon does not love e-tailing, but stresses its importance in modern retailing. By 2010, Crate and Barrel - in partnership with FiftyOne Global Ecommerce - extended their global e-commerce presence and internal shipping capabilities to 91 markets. Gordon notes, "We spent our whole lives selling products out of beautiful stores. Now people go online to buy. It is very profitable. I don't love it. But you can't live without it. One has no choice but to be very good at e-commerce".