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The Latest RH Remodel Invites Suburban Chicago Guests to Shop and Savor

RH opened their remodeled gallery in Oak Brook, Illinois in late September.  The store features RH’s Home, Outdoor, and Modern lines, as well as an interior design center.  As a new addition to the Oak Brook location, the entire 3rd level is devoted to the restaurant, garden, and wine bar, giving the space appeal far beyond simply shopping for home furnishings.   Read on to learn about how these grand gallery spaces assist in RH’s positioning as a premium lifestyle brand.

The Remodeled Oakbrook Showroom Offers Customers an Exploratory Shopping Experience

RH’s newest gallery and restaurant opened in Chicago’s Oakbrook Center, 18 miles west of Downtown Chicago, on September 24.  The 3 story, free standing property spans 60,000 square feet, 5x the size of the shopping center’s original store site.  The first floor is home to RH Interior and Outdoor; the space is anchored by an expansive main show floor, with a series of themed designed rooms stemming off the entryway.  The maze-like design of the store’s periphery is akin to museum galleries, as is the deliberate assortment within them.  All 3 levels feature outdoor patio seating areas for customers to lounge and peruse the store’s offerings.

The second floor, structured in a similar style, is devoted to RH Modern and the interior design center, a minimalist space encased by glass, barely embossed with the iconic ‘RH’.  Finally, floor 3 hosts the RH rooftop restaurant and wine terrace, featuring a wine barista bar, rooftop garden and outdoor patio.

Oak Brook’s rooftop café marks the 12th restaurant and 63rd gallery opening for the chain, and the second for the Chicago-metro area.  The neighboring Chicago flagship, located in the historic 3 Arts Club, features a similar restaurant setup, albeit on the ground level.  While the 3 Arts location features 5 stories rather than 3, the interior layout of the stores is remarkably similar.  Certainly, interesting how RH continued to mimic the legacy design, even when working from scratch on a new build site.

Oakbrook restaurant

RH Restaurants at Oakbrook

Chicago restaurant

3 Arts Club – Chicago Flagship

Symmetry is the name of the game throughout both stores, which is certainly in keeping with the company’s design ethos. RH draws inspiration from the learnings of Roman architect and engineer Vitruvius; he indicates that the most pleasing of environments are “a study of basic balance, symmetry and perfect proportions”. Many of the in-store displays are perfectly symmetrical down to the décor (at times making it easy to get turned around inside the store), making for a cohesive, minimal, but still visually interesting space, echoing the brand’s less-is-more mentality.

RH is Entering an Era of a Comprehensive Luxury Brand

RH first gave indications of greater luxury aspirations when the company formally changed its name in 2017.  Established in 1979 under the name ‘Restoration Hardware’, the name change was a strategic pivot to shift customer perceptions beyond the company’s hardware store beginnings and solidify its positioning as a provider of high-end home furnishings. RH engages store patrons in a luxury experience at all touchpoints throughout the physical store.  From champagne-laden shopping opportunities to attentive store associates, the shopping experience at an RH is nothing short of grandiose.

The Oakbrook center, managed by Brookfield Properties, is a prime candidate for an experiential retail concept like that of RH, as the center already hosts a variety of experiences throughout the Center on a rotating and permanent basis.  In terms of income, the Oakbrook shopper skews higher income, well within RH’s target demographic.  Accessibility and timing are also important to note regarding the reopening, as the RH Oakbrook location provides easier access to suburban Chicago shoppers than the downtown flagship and coincides with the recent shift in consumer trends favoring home décor and remodeling.

RH Oakbrook

With the gallery formats spanning tens of thousands of square feet, RH’s showroom strategy offers customers an immersive experience to see, touch, and experience the company’s brands at great scale, at times so much so that transactional opportunities become secondary.  The brand also keeps their community-building experiences completely offline; RH has no social media presence.  Apart from traditional e-commerce, customers must go to the stores to cultivate substantive relationships with the company and its offerings.

Pricing has been another recent consideration for RH, as they have been quietly raising prices, at times on identical items, over the last 2+ years.  This pricing strategy is indicative of an ongoing divide in retailing and reiterates RH’s drive to cater their offerings to a higher income consumer.  Neither of these strategies appear to be an impediment to growth for RH, as the company’s stock price has jumped 1600% in the last 4 years, and in FY 2020, company sales climbed 8% to total $2.85B.

As RH continues to solidify its positioning as a luxury brand, as its gallery-restaurant combination spaces may suggest, it has plans to extend beyond home furnishings.  The company’s first boutique hotel, GuestHouse is slated to open in late 2021 in New York City’s Meatpacking District.  A premium hotel outfitted with RH home furnishings could serve as a unique, and potentially lucrative, opportunity to convert new customers directly within RH’s target market to shop RH for their own home.  Additional adjacent revenue lines for the company include RH One, a private jet available for charter, and RH3, a luxury yacht which sails throughout the Caribbean and Mediterranean.

RH Oakbrook

RH is challenging the status quo of what it means to be a home furnishings retailer in 2021; in the process they are creating spaces that marry the likes of traditional retail and hospitality.  The remodel of RH Oakbrook embodies the RH brand transformation to a luxury home and lifestyle brand and experiential retailer.  As RH creates  extravagant spaces for its customers, they are creating a brand legacy that extends far and beyond their tangible product offerings.  To learn more about our work in retail strategy, simply contact us.  If you’d like to stay up to date on our latest retail insights, be sure to follow us on LinkedIn.

Reagan Jacobs

rjacobs@mdretail.com

Reagan provides research, planning and analysis support for McMillanDoolittle retail consulting projects. She supports company and client projects through consumer research planning, merchandise and operations analysis, financial modeling and graphic design work.

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