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West Elm and Innovation: From Furniture to Boutique Hotels

I read an interesting article in the Wall Street Journal that furniture retailer West Elm is planning, along with a hospitality management company called DDK, to create a chain of boutique hotels.

This is a cool example of innovation.

What does West Elm know about running hotels?  That is probably why they partnered with DDK. They will probably handle the operational details.  West Elm, however, brings expertise in furniture and design which, if you think about it, is valuable because a hotel room is like a home away from home.

Boutique hotels are in demand because frequent travelers are getting tired of cookie-cutter hotel rooms.

West Elm can use its products to create hotel rooms that stand out in comfort and style.

The other great thing, from West Elm's perspective,  is the synergy created.  Not only can they make money from renting out rooms but hotel guests will also be able to order their room's furnishings online.

Thus, the hotel will not only be an independent source of revenue, but also another way to promote their products.

So what prompted West Elm to be innovative and start hotels?

It turned out that West Elm's leadership was smart enough to realize that opening more stores would not be a path to growth.  Instead, it would cause cannibalization of sales.

 
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