Kristin NilesProfessor Amanda Kenny

Innovation for ethical retail:Analysis of Operations Management Careers for West Elm

Prepared forWisconsin School of Business

Career Advising Center

Kristin NilesOperations and Technology Management Student

University of Wisconsin-Madison

December 16, 2016

Kristin NilesProfessor Amanda Kenny

Table of ContentsExecutive Summary..........................................................................................................................i

Purpose............................................................................................................................................1

Introduction to the Home Furnishings Industry...............................................................................1

A Growing Sector........................................................................................................................1

Role of E-Commerce...................................................................................................................1

Responsible Retail and Fair Trade...............................................................................................1

Company Profile..............................................................................................................................2

Corporation: Williams-Sonoma, Inc............................................................................................2

Brand: West Elm..........................................................................................................................2

Careers in Operations......................................................................................................................3

Operations Management..............................................................................................................3

Williams-Sonoma, Inc. Supply Chain Infrastructure...................................................................3

Commitment to Supply Chain Transparency...............................................................................3

Skills for Successful Operations Managers.....................................................................................4

Entering the West Elm Discourse Community................................................................................4

Front + Main Blog........................................................................................................................4

Social Media................................................................................................................................5

Conclusion.......................................................................................................................................5

Reference List..................................................................................................................................6

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Kristin NilesProfessor Amanda Kenny

Executive Summary West Elm is a home and lifestyle retailer with a contemporary aesthetic and a commitment to create products with reduced ecological footprints and ethical labor practices. As a company with a diverse line of unique merchandise, operations managers are essential for execution of the procurement, production, and distribution processes of the company.

The responsible retailing model is lucrative for brands and desired by modern consumers. Operations managers are the key to creating the trustworthy and transparent supply chain that consumers want. They collaborate with the artisans and fair trade manufacturers to bring products to West Elm that are sourced according to West Elm’s mission of sustainability. This requires critical thinking, analysis, and innovation, which are skills necessary of a successful operations manager.

Students who are interested in careers with West Elm should first become familiar with the brand, its stylistic identity, values, and culture. Carefully following the brand’s social media outlets and blog, Front + Main, is an easy way to do so.

The home furnishings industry and particularly the West Elm brand have experienced steady growth in recent years, and are poised to grow even more as ecommerce processes are perfected by operations management professionals.

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Kristin NilesProfessor Amanda Kenny

PurposeThis report was designed as an aid to students in the Wisconsin School of Business who are interested in pursuing a career with home furnishings retailer West Elm in an operations or supply chain position. The report provides insight into the operations of the West Elm, trends in retail and home furnishings, and skills required to be a successful operations manager.

Introduction to the Home Furnishings IndustryA Growing Sector

According to a report by B2B Ecommerce World, “consumers in the United States spent $103.75 billion on home goods in 2015, up from $98.23 billion in 2014, by U.S. Commerce Department figures. The total growth in spending on furniture and furnishings easily exceeded the 3.4% growth in total U.S. consumer spending in 2015”. As an industry that is expanding in size and is fueled by of-the-moment trends in design, the home furnishings industry is an exciting place to forge a career (Ali, October 2016).

Role of E-CommerceSays trade journal Home Furnishings Business, online sales are now the “primary driver of growth within the home furnishing sector. Thanks to advancements in technology, online shopping portals are more customer-friendly than ever. With the rise of ecommerce, however, the personalized customer service experience is often sacrificed. Home furnishings retailers are working to build and maintain relationships with online customers as sales associates would do in a brick-and-mortar store (Sexton, September 2016). With a multi-channel retailer comes a complexity in operations and a need for operations professionals to manage demand, procurement, and distribution processes.

Responsible Retail and Fair TradeResponsible retail and fair trade are new initiatives within the home furnishings sector. Companies have begun sourcing raw materials like wood and cotton with healthier

environmental footprints and more ethical labor practices. West Elm is leading the way in this initiative, becoming the first-ever home retailer to offer Fair Trade Certified Products in 2014. The goal of fair trade is to “create long term, sustainable economic opportunities for workers” (“Our commitments”). To be Fair Trade Certified, factories undergo a thorough screening for the safety, fairness, and environmental standards. In exchange, companies pay premiums to the manufacturers of their products that go directly to a worker fund that is spent on local community needs like education and health care (“Our commitments”).

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Supply chain transparency and corporate ethics is becoming an “expectancy” of companies by modern consumers, says lifestyle blogger Yuri Durocher. Large corporations such as Williams-Sonoma, Inc., headed by their operations teams, have been pressured by their customer bases into adapting their supply chains and operations to be more socially responsible and environmentally sustainable (Durocher, November 2016).

Company Profile Corporation: Williams-Sonoma, Inc.

West Elm is a wholly owned subsidiary of Williams-Sonoma, Inc. (NYSE: WSM), a corporation whose portfolio includes some of the best-known and beloved home furnishings brands in America. Based out of San Francisco, California, Williams-Sonoma, Inc, is the parent company of Williams-Sonoma, Williams-Sonoma Home, Pottery Barn, PBteen, Pottery Barn Kids, Mark and Graham, and Rejuvenation. According to their annual report, the company enjoyed $4.976 billion revenues in 2015, 51% of which were generated via e-commerce. Williams Sonoma, Inc. also maintains their brick-and-mortar retail and catalog services among their brands, giving customers the ability to choose which channel they shop through (Annual report, 2015).

Brand: West Elm Headquartered from the Dumbo neighborhood of Brooklyn, New York, West Elm is Williams-Sonoma, Inc’s fastest growing brand. The brand is distinguished from counterparts such as Pottery Barn because it has a modern-eclectic aesthetic and lower price points for the millennial customer (Annual report, 2015). Says conscious culture website EcoSalon, “West Elm has quickly become a go-to destination for decorators who want a step up from IKEA but can’t yet afford high-end contemporary design” (Marati, 2012).

Founded in 2002, the West Elm brand has experienced tremendous growth in the past decade. West Elm retail stores can be found in 85 United States cities as well as some foreign countries. The company is poised to expand even more, with their next venture in hospitality. A line of

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boutique West Elm hotels will begin opening throughout the United States in 2018 (West Elm, About).

According to the company website, West Elm’s three main focuses are on modern design, sustainability, and community. The company is committed to responsible retail and transparency in supply chains, providing Fair Trade Certified and organic home products at affordable prices. It collaborates with local and foreign artisans to create a carefully curated collection of andcrafted textiles, furniture, and decor for West Elm retail stores, catalogs, and online shopping (West Elm, “Our commitments”).

Careers in OperationsOperations Management

According to current job postings on West Elm’s careers webpage, operations managers collaborate with many different departments, such as design, sourcing, and merchandising, to create inventory timelines for West Elm products to be manufactured and distributed. Operations managers work continuously to improve the processes and systems of the company for maximum efficiency. They maintain relationships with both customers and suppliers to ensure satisfaction at all levels of the supply chain of West Elm’s goods.

Because West Elm’s line of products is so large and diversified, an operations manager will likely specialize in one product line, such as upholstered furniture or lighting, and work exclusively with those products (“Jobs at West Elm”).

Williams-Sonoma, Inc. Supply Chain Infrastructure On its corporate website, Williams-Sonoma, Inc. describes itself as a “multi-brand, multi-channel, global enterprise”. Because the corporation’s portfolio of brands operates through brick-and-mortar, catalog, and e-commerce channels, Williams-Sonoma, Inc. needs a sizable team of operations and supply chain specialists to execute the procurement, production, and distribution processes of its many houseware product lines.

In recent years, Williams-Sonoma, Inc. has invested heavily in improving their supply chain infrastructure to ensure a successful customer experience in whatever channel they shop through (Lewis, 2013). Williams-Sonoma, Inc. has made the decision to in-source most of their furniture production to have more control over it. The corporation’s ultimate goal is global expansion, and its Board of Directors feels that investing in supply chains and distribution infrastructure is key to achieving this goal (Giannopoulos, 2014).

Commitment to Supply Chain TransparencyWest Elm is committed to responsible retail and transparent supply chains. Individuals working in the operations department of the company ensure transparency in the sourcing and manufacturing of West Elm products at the production level (“Our commitments”). Operations managers coordinate purchase orders with global artisans and Fair Trade Certified producers to

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uphold West Elm’s mission to bring and sustainable and responsible products to customers (“Jobs at West Elm”).

Skills for Successful Operations ManagersThe professional organization for supply chain management, APICS, stresses the importance of critical thinking and data analysis skills for operations managers. They can come from various backgrounds or departments of a company as long as they are well-versed in the processes of the business and are able to implement strategy.

APICS magazine columnists John Collins and Eric Jack advise that the best operations managers are those who can create process-based innovation. We often think of innovation in terms of product-based innovation, like the creativity demonstrated by product development or marketing teams, but it is as just as important in operations. These innovations could include “modernizations of a company’s process flows, operating systems, or tools, or identification and elimination of the causes of poor quality, process variation, [and] non-value-adding activities” (Collins and Jack, 2016).

While a product developer at West Elm might innovate ways to incorporate reclaimed wood into modern furniture, an operations manager would innovate processes for efficient and effective procurement, manufacturing, and distribution of that furniture. Especially at a company such as West Elm, which doesn’t necessarily follow industry standards for mass-produced goods due to its sustainability and ethical commitments, process-based innovation is essential to a functional supply chain and profitable organization.

Entering the West Elm Discourse CommunityFront + Main Blog

The West Elm brand operates a lifestyle blog called Front + Main which is a valuable tool for prospective employees to understand the values and target customer of the brand. Named for the company’s location on Front Street and Main Street in Brooklyn, the site is a tool used by West Elm to merchandise their products and promote their functionality in the home. The quality and originality of the content posted makes the blog mutually beneficial: readers get inspiration and tips and West Elm can endorse its products.

Posts cover a variety of lifestyle topics, from fine dining to travel, each strategically incorporating West Elm products without feeling promotional. For example, a recent Front + Main post by Maxwell Tielman entitled “5 Cheese Platters for Every Party This Fall” offers sophisticated advice and gourmet recipes for entertaining, with careful product placement of West Elm merchandise throughout the post. At the conclusion of the blog post, a section called Get The Look redirects readers to westelm.com to the cheese knives, cutting boards, and other accessories featured in the post (Tielman, October 2016).

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Kristin NilesProfessor Amanda Kenny

For students interested in a career with West Elm, regularly reading the Front + Main blog is a valuable way to enter the West Elm discourse community and learn more about the brand’s products, culture, and upcoming projects.

Social MediaSocial media now “plays a crucial role in how consumers discover and share brand information” says Ismail Schuster of IT News. West Elm is present on almost all major social media platforms, including Twitter, Facebook, Pinterest, YouTube, and Instagram. Many social media posts are promotions for recent blog posts and have links that redirect to Front + Main. Other posts are photographs submitted by customers using the hashtag #mywestelm, showing how they style West Elm products in their homes (@westelm. Instagram, 2016). The ability of customers to share a brand experience connects them to the brand and influences the purchasing decisions of prospective customers, which is now essential in creating brand loyalty (Schuster, 2016).

As the company’s most frequently updated form of communication with the public, following West Elm’s social media outlets is a valuable resource for prospective employees to learn more about the company, its atmosphere, and recent projects. Understanding the scope of West Elm’s product lines and channels of distribution is a valuable acumen for a potential operations employee.

ConclusionAs Williams-Sonoma, Inc’s fastest growing brand, West Elm is a promising potential employer for students with interests in home furnishings and sustainable retailing. West Elm’s operations department is particularly interesting because of its initiative to source products that are environmentally and socially responsible. Operations managers are the key to creating the sustainable, transparent supply chain that is so integral to the West Elm brand.

Interested students should stay current on information regarding West Elm, the home furnishings sector, and the operations of major corporations who maintain a multi-channel distribution business model. Process-based innovation, particularly in e-commerce distribution, will create better, faster retailing with a positive global impact.

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Reference ListAli, F. (2016, October 26). Hardware and home goods companies nail down B2B e-commerce.

B2B Ecommerce World. Retrieved December 4, 2016, from https://www.b2becommerceworld.com/2016/10/26/hardware-and-home-goods-companies-nail-down-b2b-e-commerce

Collins, J., Jack, E. (2016, May/June). Enriching the creative core. APICS. Retrieved December 13, 2016, from http://www.apics.org/apics-for-individuals/apics-magazine-home/magazine-detail-page/2016/05/31/enriching-the-creative-core

Durocher, Y. (2016, November 17). The meaning behind today’s modern consumerism. Global Times. Retrieved November 28, 2016, from http://wwwf.globaltimes.cn/content/1018561.shtml

Giannopoulos, N. (2014, March 24). Williams-Sonoma focuses $220M capex on supply chain, global expansion. Retail Info Systems News. Retrieved November 7, 2016, from http://risnews.edgl.com/retail-news/Williams-Sonoma-Focuses-$220M-CapEx-on-Supply-Chain,-Global-Expansion91788

Jobs at West Elm. (n.d.). Retrieved December 04, 2016, from http://careers.williams-sonomainc.com/west-elm/go/Jobs-at-West-Elm/395504/

Lewis, S. (2013, November 21). Williams-Sonoma praises supply chain and IT enhancement for Q3 success. Innovative Retail Technologies. Retrieved November 7, 2016, from http://www.innovativeretailtechnologies.com/doc/williams-sonoma-praises-supply-chain-and-it-enhancement-for-q-success-0001

Marati, J. (2012, February 29). Behind the label: West Elm green. EcoSalon. Retrieved November 7, 2016, from ecosalon.com/behind-the-label-west-elm-green

Our commitments. (n.d.). West Elm. Retrieved November 7, 2016, from http://www.westelm.com/pages/about-west-elm/our-commitments

Sexton, R. (2016, September 9). So you want to start an e-commerce business. Home Furnishings Business. Retrieved November 7, 2016, from http://hfbusiness.com/CurrentIssue/CurrentIssueModule/ArticleId/14771/so-you-want-to-start-an-e-commerce-business

Schuster, I. (2016, November 1). Using technology to shape brand opinions. IT News Africa. Retrieved November 7, 2016, from http://www.itnewsafrica.com/2016/11/using-technology-to-shape-brand-opinions/

Tielman, M. (2016, October 28). 5 cheese plates for every party this fall. Front + Main. Retrieved November 7, 2016, from http://blog.westelm.com/2016/10/28/composing-the-cheese-plate/

Williams-Sonoma, Inc. (2015). Annual report 2015. Retrieved from williams-sonomainc.com/financialreports

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