Restoration Hardware 2014 Annual Report Download - page 9

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Outlet Stores
As of January 31, 2015, we operated 17 outlet stores in 12 states in the United States and in Canada. Our
outlet stores are branded as Restoration Hardware Outlet or RH Outlet and located primarily in large outlet malls.
Our outlet stores serve as an efficient means to sell discontinued or irregular inventory outside of our core sales
channels.
E-Commerce
Our primary websites, www.restorationhardware.com and www.rh.com, provide our customers with the
ability to purchase our merchandise online. In May 2008, we launched www.rhbabyandchild.com,ane-
commerce enabled website devoted to our children’s furnishings category. In May 2011, we launched apps for
smartphones and tablets that enable customers to browse our growing product assortment.
Our e-commerce platform provides simplicity and ease of use while allowing customers to experience the
RH lifestyle reflected in our catalogs and throughout our stores. We update our websites regularly to reflect
product availability and special offers. In fiscal 2014, our websites logged approximately 25.8 million unique
visits, an increase of 16% over fiscal 2013.
We display substantially all of our current product assortment on our websites. The websites also offer a
room-based navigation, which allows the customer to envision and shop items by room or by product, expanding
on the richness of the online experience. For example, customers can search our websites for products by size or
color, browse through our extensive product categories and see detailed information about each item and
collection, such as dimensions, materials and care instructions. Additionally, customers can select color swatches
and view merchandise displayed with different color and fabric options.
Source Books
We produce a series of catalogs, that we refer to as Source Books, to showcase our merchandise assortment.
In 2014, these included our Interiors, Outdoor, Baby & Child, Objects of Curiosity, Small Spaces, Bath,
Furniture, Upholstery, Leather, Linens, Rugs, Lighting and Tableware Source Books. Our Source Books are one
of our primary branding and advertising vehicles. We have expanded the page count of our Source Books in
fiscal 2014, which allowed us to showcase nearly our entire product assortment. We have found that when we
display a greater merchandise assortment in our Source Books, we experience increased sales across all of our
channels. As in our retail stores, our Source Books present our merchandise in lifestyle settings that represent our
unique design aesthetic. Our Source Books also feature profiles of select artisan vendors and other compelling
editorial content regarding home décor. All creative work on our Source Books is coordinated by our in-house
personnel in our RH Center of Innovation & Product Leadership, providing us greater control over the brand
image presented to our customers, while also reducing our Source Book production costs.
Our Source Book mailings serve as a key driver of sales through both our websites and retail stores. Our
customers respond to the Source Books across all of our channels, with sales trends closely correlating to the
assortments that we emphasize and feature prominently both in our Source Books and in our stores. We continue
to evaluate and optimize our Source Book strategy based on our experience.
We maintain a database of customer information, which include sales patterns, detailed purchasing
information, certain demographic information, geographic locations and email addresses of our customers. We
mail our Source Books to addresses within this database and to addresses provided to us by third parties. The
database supports our ability to analyze our customers’ buying behaviors across sales channels and facilitates the
development of targeted marketing strategies, and is maintained in accordance with our privacy policy disclosed
on our website. We segment our customer files based on multiple variables, and we tailor our Source Book
mailings and emails in response to the purchasing patterns and product needs of our customers. We focus on
continually improving the segmentation of customer files and the expansion of our customer database.
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