How Pottery Barn Wins With Style

Great finds are accumulated in the studio's Inspiration Room, where a cheerful hodgepodge of items are grouped by the brand's color palette. Pieces of pottery, fabric swatches, and flea-market discoveries sit next to storyboards that are pinned with photographs, magazine clippings, paint chips, and computer-generated mock-ups of fabric designs.

They are all fodder for brainstorming sessions, where the group decides what the next season will look like. By Thanksgiving, Pottery Barn plans to debut a set of wineglasses that will have the look and feel of high-priced Riedel crystal but that will be sold at a fraction of the price. The inspiration: Tejada's current obsession with wine. She and her husband have planted Spanish varietals at their Napa Valley ranch and managed to produce their first few barrels of Tempranillo Grenache. (Alber plants Syrah grapes.) As Tejada's vineyard grows, expect to see more wine accessories sprouting up in Pottery Barn stores.

Living the Business

Individual products or lines of merchandise aren't the only things inspired by the personal lives of Pottery Barn staffers. It's no coincidence that the first Pottery Barn Kids catalog debuted simultaneously with the birth of Alber's first child. Alber, who joined the company in 1995 as a buyer, was a divisional vice president when she got pregnant with her daughter, Samantha. Frustrated at trying to put together a good-looking nursery, she and her team instead put together a business plan for an expansion of the brand into children's furniture and accessories. Two years later, the first retail shop opened at South Coast Plaza in Costa Mesa, California. In June of 2001, the Pottery Barn Kids Web site was launched -- just one year after the birth of Alber's second child, Jackson.

There are now 64 Pottery Barn Kids stores, with 16 more scheduled to open this year. Says Alber: "It's been the most amazing experience I've ever had in my life, other than the birth of my children."

Although Samantha is only four and a half, Alber is already thinking ahead to the day when her daughter is likely to trade her tea set in for an MP3 player and spend her allowance on lipstick instead of Barbie dolls.

In April, the first PBteen catalog hit mailboxes nationwide, with a range of merchandise designed to appeal to kids ages 10 to 19. The catalog featured furry beanbag chairs, animal-print sheets, and desks that look like lockers.

PBteen is Pottery Barn's attempt to tap into a huge market opportunity: Teens spend $125 billion of their own money annually and influence another $245 billion in household spending. And no other home retailer focuses exclusively on the teen market.

The concept, which has been a year in the making, seems like a natural extension for Pottery Barn, but it was one that required significant sleuthing to divine just the right product mix. Patrick Wynhoff, senior vice president of Pottery Barn Kids and PBteen, and his team have spent months trying to get inside the heads (and wallets) of their teenage customers. "Our designers are going to concerts, hanging out at schools, and watching MTV," he says. To get a feel for the spring 2004 line, young female staffers scouted the shopping malls in Orange County while the guys scoped out skateboard parks in Los Angeles. Wynhoff has been sneaking teen magazines home from the Safeway. "I get weird looks -- like they're ready to call 911," he says, laughing.

A contest asking kids to mail in snapshots of their rooms generated photographs that gave PBteen staffers a view into the real-life spaces of teenagers. Staffers have been poring over them like CIA analysts. "The rooms are remarkably similar," Wynhoff says. "The kids are all little pack rats, with every stuffed animal they've gotten since they were born. That's a huge opportunity for us. We hope to get parents to buy stuff that will impose some order."

Knowing how fickle a teen audience can be, the product team has adopted a strategy that's both hip and sensible -- the merchandise equivalent of selling a great pair of jeans with some really funky earrings. The core products will consist of basic bedroom furniture that a teenager needs: a bed, a desk, and a dresser. There might be one fashion-forward offering -- a skateboard headboard, for instance -- but the majority will have timeless designs, some of which are structured like shadow boxes to accommodate a teenager's favorite pictures and mementos. Finally, about 15% to 20% of the line will be trendy -- for example, bedding and accessories in wacky prints or hot colors.

Still, the strategy isn't risk free. Wynhoff freely admits that Target, which advertises quite aggressively to the teen market, is a formidable competitor. "We're not going to be able to compete on price, but we can compete on design and in showing our customer how the product works as a total-lifestyle look. Target is not doing that in their stores," he says.