What next for Habitat?

28 Jun 2011|Added Value

habitat storeOnce synonymous with home interiors style, UK brand Habitat’s recent loss of form, compounded by the recession, has resulted in its sale to Argos, one of the largest general goods retailers in the UK. So what does the future hold? Our UK team (along with the rest of the media it seems) has a view.

Back in the 60s Habitat made designer furniture somewhat more accessible and signalled a new approach to retail design in the UK in terms of layout and atmosphere for image conscious kids of the time.

Yet now, exacerbated by the recession and slump in spending, it has struggled to stand out in market place that’s seen other high street players enter the home improvement market, such as Zara Home and more recently, H&M Home. They’ve successfully penetrated the category by applying the rules of high street fast fashion to homewares. However, despite the changing market dynamics, the true defining problem for Habitat is that it forgot what made it great.

Back in its heyday Habitat’s success was based upon its ability to be an aspirational brand to an ever more socially and financially mobile group of baby boomers based on Conran’s cultural capital at the time.. But the innovations slowed. It stopped producing the iconic designs upon which its reputation was made, yet still retained a price premium. Compare Habitat to IKEA and the problem is lain bare with the latter delivering a strong value proposition for products of a comparable quality.

Habitat opens in the 1960's

 

As the brand struggled (and it’s been struggling for a while) one would have thought the promotion of up and coming young designers would have been a suitable strategy. Just as it championed and gave a platform to the future of British design like Sir Terence Conran back in the sixties or Tom Dixon in the eighties/nineties, it would have given today’s twenty and thirty-somethings products that were not only aesthetically beautiful, but would also stand the test of time.

Roll forward to today and the challenge is immediate: the task facing Argos is to stop milking the Habitat brand. Argos probably understands this better than any other retailer that you cannot drive price at the expense of value. That means a re-think for what Habitat stands for, starting with a rapid overhaul of the proposition.

There are a couple of scenarios that Argos can take. Create iconic products, deliver great price or great customer experience. But it needs to choose one and do it well. Being ‘ok’ on all is not good enough. The strategic choice would seem to be between becoming a more aspirational, convenient IKEA or a less expensive Heals. Potentially, there is more traction in the latter. The Conran name still resonates in the cool stakes. Argos could relight the fire that we all had for Habitat and make it meaningful again. From here the rest will start to follow.

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