Class for Mass: HERMAN MILLER ROLLS OUT OFFICE CHAIRS AT COSTCO

Step Inside Design, Mar/Apr 2009 by Tooms, Robin

At Herman Miller, the "Everybody Deserves a Good Chair" philosophy is truer now than ever, since the legendary furniture manufacturer began making two popular chairs-the Equa XR and Caper XR-available nationwide through Costco. And with the help of People Design, the launch is a class act.

When I first heard of Herman Miller's venture with Costco as a new retail channel for office chairs, my reaction was what most of you are probably thinking: "Herman Miller, tbe makers of fine quality furniture, at Costco, the nation's largest warehouse club?" Something just did not sound right. But after speaking with People Design, the strategic designers behind the initiative, and Bart Pierce, senior manager at Herman Miller for the Home, I quickly learned how little I knew about the giant retailer and the positives this arrangement would have on Herman Miller's brand and availability of their storied products.

At first glance, a Costco warehouse store seems just that- a warehouse. On closer inspection though, one finds hidden gems nestled behind those industrial-sized boxes of granola bars. On a recent visit I found leather furniture, an impressive grandfather clock, chandeliers and quality electronics. As it turns out, Costco has more of a two-pronged merchandising strategy, so it's not uncommon for the retailer to seek out premium products for its high-end efforts.

COSTCO HERMAN MILLER

Costco, according to Pierce, is actually a very appropriate partner for Herman Miller, one the manufacturer heavily researched before selecting. With this move Herman Miller has found an avenue for new fans who may not have had exposure to the brand before. There are two positives: the Costco distribution channel and the retailer's demographics. The distribution channel opens up new authences for Herman Miller on a scale and volume that office chair products have not had access to before. And the customer demographic for Costco more closely aligns to the Herman Miller for the Home brand than one might expect. The Herman Miller brand stands for well-designed products with a focus on quality and environmental sustainability. The target Costco demographic places high importance on product value: workmanship, style and longevity of materials. Herman Miller uses quality materials, offers a 12-year warranty, carefully tests products and practices green manufacturing. But how to demonstrate this to the typical Costco buyer in that vast retail environment, especially the customer who may not already have awareness of the Herman Miller brand but does appreciate well-designed products?

First, note the significance of Herman Miller selling office chairs at Costco. For years, Herman Miller was strictly a B2B company. It was only about 15 years ago that it launched Herman Miller for the Home and started retail relationships to sell some HM classics and office products. Previously, buying a chair from Herman Miller meant calling an authorized dealer. And before the Costco launch, shoppers could only see the chairs in an upscale retail environment such as Design Within Reach or Levenger. The latter are not locations where the packaging is the salesperson- customers have knowledgeable, live people to talk to and ask questions. The Costco environment is quite different. This fact offers both a challenge and an opportunity, in view of what packaging can convey.

TEST, ASSESS, LAUNCH

There are two chairs in the launch: One is the high-performance Equa XR chair geared for long hours at workstations, and the other is the Caper XR, a lightweight task chair for a studio or activity area. So while applications and target buyers may be different, warranting different targeted messages, the values behind the brand are consistent.

This project occurred in two phases. The first was a pilot launch in Oct. 2008 in two regions, spreading to a third before the pilot concluded. The second phase is the major launch in Jan. 2009 (get out to your closest Costco store now and check these out!). For the pilot, People Design created a test package design so Herman Miller could get feedback and see if customers were absorbing the brand message. The pilot received positive feedback overall, but from it the team also learned of some items they needed to revise for the full launch.

One visible item that changed was the product package itself. During the pilot phase, the box design was an austere black. Actually, People Design had originally explored three different options: a package that was mysterious and would pique a shopper's interest; one that was edgy, hip and cool; and the "conservative yet sophisticated" black box. The last design was the one chosen for the pilot. Kevin Budelmann at People Design describes the black box as the "stealth bomber of office chairs," a look that surprises by making office chairs look sexy. The style of the package is the black-on-black look one might see for a high-tech gadget; it says premium and high performance in a single look.

THE RETAIL PACKAGING IS THE ELEVATOR PITCH