Kirkland’s Inc. SWOT and PESTLE Analysis

Strength

1. Good customer service through loyalty programs and fast delivery: Kirkland has a good customer service strategy to enhance customer experience and encourage brand loyalty. They have built their reputation as an affordable brand for home décor and furnishings. Most of the products are either traditional or casually styled and a wide assortment allows customers to pick items that are well suited to their homes. Kirkland follows an emotionally based tagline of “Bring Happiness Home”. Kirkland redesigned their customer loyalty program in 2020 to increase brand loyalty. Now Kirkland customers can join the private K-club and get access to private label credit financing for their purchases. The new and improved points systems rewards customers for making purchases from Kirkland or even for interacting with Kirkland across different communication channels. These points can be redeemed for rewards. Special birthday discounts, bonus days, holiday sales, monthly $500 lucky draw, etc. are other ways in which Kirkland enhances customer experience. They also focus on fast delivery through multiple channels. Customers can ask for direct home delivery, warehouse pickup, store pick-up, curbside pick-up, buy online and pick up from store, and other methods as per their convenience. In 2020, Kirkland introduced a next-day delivery system for some products to keep up with competitors.

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Weakness

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Opportunity

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Threat

1. Highly competitive industry with many large competitors: The home furnishing industry has historically been very competitive due to the high margins and high potential for profits. There are many big lifestyle brands and e-commerce platforms that have started their own home furnishing lines following the success of other products. Amazon, eBay, and Target are some of these companies who saw success in other sectors before venturing into home furnishing. The advantage with these companies is that they have higher partnerships with multiple sellers, and they have considerable bargaining power to set prices according to their own preferences. Products are heavily discounted, and this attracts consumers to purchase from these stores. Amazon and eBay have convenient return policies too. Kirkland also faces competition from low-priced entrants from abroad. Globalization and the recent COVID-19 pandemic have made everything shift online. It has become easier for customers to find cheaper furnishings online from foreign manufacturers directly. To sustain itself against such competition, Kirkland has to focus on improving its brand loyalty.

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Political

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Economic

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Social

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Technological

1. AR technology can mimic store shopping experience at home: The COVID-19 pandemic forced people to stay at home and stores to close down. Home furnishings is a product category that heavily relies on physical stores to allow customers to see the product with their own eyes before deciding to purchase it. Moreover, in stores, customers can check how the product looks under different lighting, the actual dimensions of the product, and then decide if it will match the theme of their room. With lockdowns preventing this from happening, a lot of consumers were forced to turn towards online purchase of furniture. To improve this buying experience, furniture companies have collaborated with technology companies to design their e-commerce platform in such a way that mimics the in-store experience of furniture shopping. Augmented Reality (AR) enables customers to see how the furniture will look in their homes and they can also look at the product from different angles, and not be restricted to a couple of pictures uploaded by the seller. Big brands like IKEA, Amazon, Magnolia Market, Home Depot, Wayfair, and Target are already employing this technology to improve their customers’ shopping experiences. Kirkland should also start employing these features on their e-commerce platform.

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Legal

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Environmental

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