S17 E06: Debbie Propst, President of Global Retail at MillerKnoll

[Music] You're listening to the luxury item, the podcast on the business of luxury, and the people and companies that are shaping the future of the luxury industry. Here's your host, Scott Kerr. Miller Noll is a global collective of design brands formed in 2021 when Herman Miller and Noll, two of the most iconic names in American modernist furniture, merged to create one of the largest and most designed forward workspace in home furnishings companies in the world. The combined company brings together more than a century of design heritage with Herman Miller known for its ergonomic innovation like the Aeron and Eames chairs and Noll celebrated for its Bauhaus rooted aesthetic and contract furniture leadership. The merger positioned Miller Noll to compete at a scale in a post-pandemic workplace market being reshaped by hybrid work. My guest on the luxury item is Debbie Propsd, president of Global Retail for Miller Noll, leading the direct to consumer and wholesale business across Herman Miller, Noll, design within reach, and Holly Hunt Brands globally. Debbie is a renowned retail industry leader known for building iconic brands, shaping innovative strategies, and connecting deeply with customers. Before joining Herman Miller in 2020, Debbie served as president of one King's Lane and Chief Brand Officer at Bed Bath and Beyond, following seven years at Abacrombian Fitch and her early career at Neiman Marcus. Welcome to the luxury item Debbie. Thanks for having me, Scott. Thank you so much for joining me. The company's entire retail channel worldwide. You also oversee the direct to consumer and wholesale businesses, bringing brands like Herman Miller, Noll, design within reach, and other related labels to customers through stores, e-commerce, and retail partners. You join Herman Miller at the very beginning of 2020 as president of Herman Miller retail, pre-COVID, and pre-merger with Noll. You immediately made retail a core growth engine for the brand, building a more robust digital and omnichannel infrastructure. When you join, what was the state of Herman Miller's retail operation? And where did you see the opportunity? Well, so I joined obviously at a crazy moment in time at the precipice of COVID. And at that time I joined and run the Herman Miller brand's retail business, and also DWR, and his distribution strategy in North America. But for Herman Miller in particular, when I joined, we just had one retail location in New York City, one in Tokyo, and a website in the US. And now we have over 35 stores globally for that brand, with a few more coming in the next months. And we will continue to grow that global retail footprint, and we've also launched many websites around the world as well. So I think one of the biggest shifts we made, in particular to optimize on the COVID trends we got, but in general to transition the way that we talked about Herman Miller's ergonomic seating business in particular, we moved to a benefit proposition. So you need great posture where the brand to help you achieve that. And we got a lot of momentum by way of the COVID trends, but that is a value proposition shift that was important to make. And I actually took a lot of the experience I had working in the sleep category previously. And the mattress industry made this purposeful shift from this is the best mattress because it has whatever number of coils per square foot to unique, great sleep. And this is the best mattress to get you that sleep. And we had the same story to tell or in ergonomics. And so we created an omnichannel approach to the customer journeys really optimizing that value proposition that the business had been run in a fairly analog way DWR in particular was about a sure and strategy and a catalog strategy. And so when I joined across both those banners, there was just so much opportunity in regard to the customer experience and the brand exposure of our portfolio in general in general and how we told our stories. And I imagine the COVID-19 pandemic when it hit your whole digital overhaul timeline was upended. You essentially had to compress a long term retail modernization roadmap into a matter of days and weeks. A lot of executives were caught completely flat footed in March 2020. You had already been thinking about digital and omnichannel in a serious way from your time when you were at one Kings Lane prior. Did that sort of give you a different kind of confidence when the crisis hit based on your experience previously? It certainly did. I came in really aiming to quickly digitize the way that we engaged the customers across both a physical and digital journey. And then the furniture category in particular that omnichannel approach is really important. We know that about two thirds of our customers that buy online have had a touch point with our stores at some point in the journey. And vice versa, we know that the digital experience is a big part of the research journey and customers go into our stores armed with information that they are researched about the product and they're there to look and touch and feel it. So digitizing the journey was a big part of my purview as I came in and obviously expedited that as quickly as possible to capitalize on those COVID-19 trends when people couldn't come into the home. And so we very quickly enabled capabilities like chat functionality so that people could still communicate with our store associates who are in fact or a brand secret weapon. Herman Miller completed its acquisition of Nol in the summer of 2021 for like $1.8 billion creating a combined company named Miller Nol. Both Herman Miller and Nol carried decades of design legacy and distinct identities. Herman Miller is associated with ergonomic functional American modernism like the iconic air on chair or Eames lounge chair. And Nol is more architectural associated with me's Vandaro and a certain Manhattan corporate aesthetic merging them raise concerns in the design community about whether either brand would be diluted. Why were you confident that the combined company made sense from a retail perspective? Well Herman Miller and Nol designs have been living symbiotically for generations and even at DWR the pairing was already living so well together where Herman Miller was one of our in house brands post marjor. But of course we source from Nol as well to bring those critical iconic pieces into the curation of modern design that DWR stood for. And with all our brands that we offer protecting and celebrating each individual design ethos brand heritage and identity is really imperative to the mission of our overall collective and fun fact as early as the 1970s we found detail in our archives about the concept of bringing Nol and Herman Miller together and a murderer. So this was something that was really thought of many decades prior. So how did the dealer networks and architects and design community respond when the two powers of modern design announced that they were becoming Miller know. Generally the response from dealers and the design community was positive and energizing there was really excitement about bringing to iconic design led to see together under one platform. I think our dealers appreciated the clarity and scale brought a stronger portfolio to them broader solution and shared standards between the brands and architects and designers saw opportunity at deeper resources expanded reach and continued design leadership. But most importantly there was confidence that the integrity of each brand would be protected whilst rent in the whole. And the murder also happened as office demand was being reshaped by hybrid work while home offices exploded Herman Miller retail was one of the clearest beneficiaries of the work from home surge. Suddenly millions of people were staring at their home office set up for eight plus hours a day and willing to spend on it Herman Miller's consumer revenue grew dramatically during this period and validated the retail push you were leading. How did that macro shift influence the way you built the combined retail strategy. Scott you're right the way that we bring a defects for teased to the way humans work and how they work is evolving so we were primed for that particular moment and time but the way humans work continues to evolve so this is really a case of us bringing our enterprise value proposition to the market in really deep ways. Of course as we discussed we announced the economic experiences across the DWR and Herman Miller platforms to capitalize on that unique moment in time and we created these really carefully hosted in store shopping experiences during that time to for customers who wanted to get fitted for a chair and person but I think largely at the experiences we created during that time live on now and are in our retail proposition as well. And that macro shift obviously changed the hangover kicked in as offices reopen the consumer demand that had fueled Miller no cold significantly and the company had dramatic post pandemic correction Miller no caught a once in a generation tailwind made a major acquisition at near or the peak of the tailwind and then had to manage through the correction it's genuinely an interesting business case study in itself what did you learn about navigating through the correction. Well with with as retailers we certainly had a lot of hot math does to navigate in the last six or so years I think the biggest lesson really about staying grounded in our fundamentals even during the period of extreme demand and then how to deal with that correction as people started to return their spend towards experiences and I was. that the pandemic accelerated behaviors, but the correction really reinforced the need to be agile and disciplined at all times. So post-correction, we move faster on our inventory management, on maintaining and leveraging our cost structure and on our decision making. But the end of the day, Scott, we stayed focused on our long-term priorities and those are design leadership, operational excellence and resilience and building brand strengths. And so coming through that correction, I'd say we're more focused, we're more resilient, and we're really better positioned for sustained growth. And most importantly, we have market share opportunity. We have less than half the assortment and stores of our main competitors. So while the market has been still the last few years, we've been able to drive growth through store assortment expansion. Miller Nol was explicitly structured as a collective of distinct design brands, each with its own point of view, product portfolio and identity, urban Miller design within reach, Nol, Hay, etc. How did you connect these brands operationally while keeping clear, unique identities so they feel tailored rather than homogenized to design savvy consumers? Well, we have a rich history that lives with us and we've been ushering those legacies through since the mid-century. And I would say generally we're wary of this cultural baysian vacation that's taken place. And so by immersing ourselves in our own rich history, we really stay grounded in these clear brands' distinctions as we innovate. And since the merger, we've really developed individual retail experiences and platforms for each of our brands. Of course, they do all come together and are celebrated as a collective in retail through DWR. But we're really ensuring that each brand is showing up through the channels and spaces that are tailored to each customer base that they uniquely serve. And each brand, importantly, retains their own creative process across product development, marketing and in-store experiences which helps them maintain a distinct point of view. And so think of Herman Miller as problem-solving designs that inspire the best in people. Nol as visionary design, shaping contemporary living, species and culture. And DWR, where modern designs greatest stories become part of yours. And Herman Miller has one of the most story design legacies in American manufacturing, names like Eames and Aeron and Nelson. How do you lead a brand whose most iconic products were designed decades ago? I'm in Miller's most iconic products where design deck is ago and that is actually proof of the brand's relevance, the great design and jurors. And so the opportunity today is making sure the company continues to earn cultural relevance with new generations of customers, new ways of living and working, and new expectation of their own sustainability, retail experience and digital discovery. And so we really approached the Scott by protecting the integrity of what made the brand iconic. Payment design, innovation and quality. And we do that while also creating space for contemporary voices, new collaborations and new product categories that really reflect how people live today. So the capsule collection that we did between Heath and Herman Miller last year is a great example of that, really balancing bringing contemporary designs to market, like the John Parson collection we launched recently with archival relaunches like the Gilbert Rodi Paldaille collection, which originally debuted in 1941. And that's our gothic shape was revolutionary at the time. And yet we introduced recently, it feels as relevant as ever. So the goal isn't to compete with the past. To build the Dix chapter of enduring products and experiences that feel as meaningful decades from now as the classics do today. We're in the business of celebrating the heirlooms you may have already collected from our portfolio, but in bringing future heirlooms to market as well because at the end of the day luxury is not landfill Scott. I want to talk about the Bane study. You know Bane's annual luxury study on high end furniture. They stated the market held steady last year, but didn't recover to its boom days. And we touched a little bit about that. Bane also draws sharp line between the two parts of the market luxury contract business like high end residential projects and hospitality grew strongly. Well, the retail channels Bane flags is underperforming. However, Miller Knowles retail business is growing in sales and store count. The recent Q32026 earnings showed orders and demand trends are strong with retail contributing to a consolidated orders increase of about 9% in the quarter. What factors are you attributing to Miller Knowles bucking the trend that Bane laid out? I would say Bane's read is broadly right and it does help explain what we're seeing in the macro trends within retail. But there's a clear divide happening between transactional retail and more relevance driven retail. So consumers are by fewer better things and they're doing that with more intention given the macro trends that we're seeing. So we're in a moment where people are valuing what they know to be ascetic. I think they want craft, they want original design and they want pieces whose value endures. And consumers are are craving more potent real life experiences with brands right now in a world where we question the authenticity of all the digital content that were served up. So we're on the right side of those larger trends. I think we're meeting people where they are, whether that is the end consumers or specifiers looking to build remarkable spaces where people come to work, learn and heal. And our retail growth is really about relevance. Our stores and our editorial storytelling help our customers understand design, quality and importantly how all those pieces work together. So I would say our portfolio is a strength that's helping us buck the trends. It allows us to meet customers across price points and various use cases from iconic single piece purchases to full environments of all kinds. And so people know us and our portfolio brands for classic mid-century designs from the renowned designers like Ray and Charles Eames and Arrows Sarenin and Marcell Brur. And then most of the time they're exposed to discovery and newly crafted pieces from today's leading product designers such as Lena Atlas and Susan Clark and Ellison Studios. And that discovery with us is a really important part of a tangible customer experience. And with the assignment expansion we've done, we're also now positioned to fully outfit your home small space or hospitality space. And so we've gone over the course of the last few years from selling items to rooms. Our growth is intentional and is connected is about new locations, digital and trade services working together as one brand, not separate channels. And all these things have really helped us buck those macro trends that we've been seeing. Are you still prioritizing scale and on the channel reach in the next couple of years? Absolutely. We've talked a lot about the importance of omnichannel in this category in particular. The digital research that happens, the need to sit in and touch and feel these products at stores. And we have a lot of market white space, we're actually at a point where we have a tremendous room for growth in our brand awareness. And we have many secondary and tertiary markets we're not in yet today. And we also have opportunity to fill in our tier one market. So we're really excited about continued growth of our store strategy alongside our assortment growth. I want to talk about the contract business. So while Miller knows contract business like commercial hospitality, et cetera, is a bigger revenue driver than retail, it seems like you're making a deliberate bet to shift this company's center of gravity from contract toward retail over the next several years. Is that the case? Actually contract remains a core engine of the business and it's a critical part of our design leadership. So rather than moving the center of gravity from one to the other, we see this strategy to grow retail as strengthening the whole. We're using retail and contract together to support long term growth for the enterprise. And what we're doing is about being more intentional about the balance. Retail and contract obviously serve different roles, but they do reinforce each other. Retail allows us to express the brands more holistically and engage customers earlier. And our retail growth strategies improve awareness in totality per enterprise. But contract continues to hyper our scale. There's our relationships and influence in the built environment. We know high net worth individuals remain the foundation of your core customer, the pandemic era customer you acquired, which is probably broader income range and more price sensitive, must be different than the customer you're trying to build based on your aggressive retail expansion strategy, expanded assortment and design when and reach integration. Who is Miller null speaking to these days? Well, first of all, luxury for us isn't really a matter of price point. It's almost been a mindset. So it's about valuing design and how that design can shape your life. It's about quality and it's about longevity. And so what's evolving is when we engage customers. We're doing that earlier and we're building relationships over time. So some customers that entered during the pandemic, for example, did so by buying a single piece. Most likely the era and share. But the focus now is on long term connection, not these one off transactions. So it DWR, for example, creating these experiences that let's us meet customers where they are without doubting the brand. Because at the end of the day, right now, experiences are the new media and we're really leaning into that. So for example, the immersive brand experience. we did with P.O.L.I.L.I.P. hotel in the cat's gills, or the B2C home rental house, whve house that we did in Palm Springs. These activities are allowing people to stay and live with our product, not simply visit them in a store, and that provides us an opportunity to not only produce our own content, but it also allows us to invite other content creatives and journalists into the DWR lifestyle and fully experience that for themselves. So as our customer engagement and activation journey is pursued, we're seeing younger customers become part of that journey, but we don't think about it as chasing a younger audience. We think about it as cultivating the next generation of luxury consumers, people who deeply are design literate, they value authenticity and sustainability, and are really willing to invest when they understand the value. Do you think younger customers are more design literate than you thought they would be over the past several years? It just has so much more information in the palm of our hands than we did when we were defined as a younger customer. It's so easy to research, and where that research is happening is changing very rapidly. We're going to see in the next few months, if not even weeks, we see a shift of research happening through AI chat as opposed to on property, and that really changes the landscape of how and where we engage with, in particular, the younger customer segment that are adopting these AI capabilities faster. We're seeing a shift across all luxury categories where consumers are choosing experiences over things, increasingly spend on how they live rather than what they own. Is that a narrative that Miller Knowle is moving into, you know, sending out a more of a lifestyle, full living environment signal? Absolutely. Our customers are being more intentional, and they're looking for design that supports that everyday life, not just individual pieces. As I was saying, the entire discovery landscape has changed. So our stores, our showrooms, and the experiences we're creating in the world all aligned with, I think what the consumer is seeking right now. What that means for Miller Knowle is showing how our products work together to create thoughtful, functional environments, whether that's at home, at work, and frankly, everywhere in between. It's less about selling more objects, and more about helping people make better decisions about the spaces that they live in. And I'd point to an example, we recently launched a design residency at DWR, and we lost that residency with with leader Atlason, our first designer in residence. And the research that we did really informed the product design for the whole pipeline of collections that we're bringing to market through that residency. The briefs that we put in play really informed, were informed by nationwide market research and insights gathered also from our sales teams across our stores. And it was really about identifying where there are specific opportunities. So the result of that is an impressive number of innovative collections that we're bringing to market over the next year. Each one intentionally designed to address various lifestyles, demographic needs, and emerging patterns in how people are living now. So coupled with the experiences that we're developing to create these immersive opportunities to engage with our product outside of store environment, I think we have a really bright future ahead as we maximize how customers are choosing to spend their time and their money. Herman Miller has always been a brand that rewards the educated buyer, the Eames legacy, the ergonomic engineering, and the sustainability story. These are all things that require some level of design literacy to fully appreciate. The problem is that design literacy is unevenly distributed, architects, creative directors, and tech executives get it immediately. A first time home office buyer or young consumer may not. In the retail environment, how do you explain the value of design to a consumer who has never really been taught to see it? Well, it's a great question because storytelling and education really is at the forefront of our marketing for all of our retail brands and our contract brands. But over the past few years, we've really evolved and enhanced our storytelling to go deeper, delving into the design process, the importance of quality and craftsmanship, and when relevant, the history behind the renewed designers and the makers that we work with. So you'll see this, for example, across the DWR Journal, which is a new iteration of our catalog, and you'll see it across our social channels and websites. And we're also creating in-store exhibits and installations that you may have come across that provide all our visitors with immersive education experiences that go deeper about sort of wide spectrums of design subjects, from historical background about classics to how lighting placement can impact a space. So, for example, we hosted a gallery style format showcasing Pravee in our San Francisco store that was about the history and color studies of those designs. Mouli and San Francisco, that was about technology and design through the lighting landscape. F 300 in New York, we reissued an archival design with one of our partners, Goopy, to really bring the storytelling around that history to market. So these are just a few of the examples of these rich experiences that I think allow us to bring to the customer in real life the storytelling as well. I know the company has a goal of opening, you know, approximately maybe doubling your DWR and Herman Miller store footprint over the next several years. So what will success look like at the end of that runway? I think it's about enhanced brand awareness and market share and therefore enhanced relevancy in the retail landscape. And we'll do that through having more brick and mortar locations in all the major markets and plus the secondary markets that we're not in today. I think they'll be continued consideration about international expansion as well. But at the end of the day, it's really about optimizing the relevance of our brands in an environment where consumer trends are constantly changing. So Debbie, my final question is the luxury item question, which I ask on my guess. So if you were stranded on a deserted island and you could only have one single luxury item with you, what would that luxury item be? It can't be any form of air or water transportation to get you off that island or anything that requires mobile service so you can call your friends or colleagues to get you off that island. It's just you on this lonely island all by yourself, palm trees, sand, ocean, but you have one single luxury item with you. What would that be? I should probably say some fabulous chair to rest in, but I have to ask you. So the sun is not aimed to my skin, so I think I might have to say my rationale SPF 50 serum. It's really quite beautiful and definitely a luxury item at the price point. It's at that. Debbie probes, president of Global Retail at Miller Null. Thank you so much for joining me on the luxury item. Like you said, it was a pleasure. That's it for this episode of the luxury item podcast. Thank you so much for listening. If you found this useful and entertaining, I would be really grateful if you can share it with a friend or colleague. I would love it if you subscribe so you never miss an episode. And while you're there, be sure to rate and review us on Apple podcasts. It really helps other listeners find us. The luxury item podcast is a production of Silver Tone Consulting. I'm your host, Scott Kerr. Until next time. (upbeat music)