One of the common challenges faced by direct-to-consumer brands is getting products into the hands of potential consumers before they buy them.
Sellers of smaller items such as shoes and clothing have often overcome this hurdle with generous return policies. But for larger items like appliances or furniture, the logistics quickly become unmanageable.
That was the challenge facing Jiake Liu and Terry Lin, founders of four-year-old Santa Monica-born outdoor furniture brand Outer. Rather than pursue the costly option of investing in showrooms to support their global expansion ambitions, the pair decided to see how far their customers’ love for their products could stretch.
The result is the Neighborhood Showroom program, which recruits outside customers to become de facto showrooms by opening their backyards to interested buyers.
Corinne Crockett, director of external marketing, said the company now has more than 1,000 neighborhood showrooms across the US and recruited 12 more locally since opening in Australia a year ago.
“A lot of brands are investing in expensive retail stores and hiring sales people, but what we thought was, what if we could outsource our outlets?” Crockett said CMO. “And that’s what Neighborhood Showroom is – crowdsourced retail.”
The idea borrows heavily from the sharing economy philosophy of Airbnb and Uber, extended to retail. However, Crockett said exterior sets represent one of the few examples where the model can be practically extended to furniture.
“You don’t really want to invite someone into your bedroom to show them your mattress and test it, but you can easily invite someone into your backyard to check out your furniture,” she said.
Crockett said Outer has had no trouble finding Neighborhood Showroom hosts, all of whom are selected from the ranks of existing customers. Each host is vetted and verified and receives a small payment each time they open their garden to buyers. However, the financial incentive is usually not the strongest incentive for hosts to enroll in the program.
“When we first launched the program, we thought people would care a little more about the monetary aspect, but as we understood who our customers were, it was really about being part of it. of something, so we steered our benefits to be very community-focused,” Crockett said. “People speak with our founders pretty much every day. They help shape our business the way they want to see it, and we enjoy exchanging information with them. »
Another factor that makes the Neighborhood Showroom concept work is that Outer doesn’t constantly renew its product lines. Crockett said that allays fears that the hosts’ furniture will become stale.
“The wicker furniture set we sold four years ago when we launched is the same wicker set we sell today,” Crockett said. “Our goal is to create durable, comfortable and innovative functional pieces, so we don’t change our styles seasonally.
“So we’re not worried about the neighborhood showroom not being updated, because we’re just adding to our styles. We’re never going to do seasonal inventory – that’s not the kind of business we’ve built. »
Outer has also made sure that conversations between its hosts and customers are as natural as possible.
“We don’t pay them a commission because we’re not looking for them to be sellers, we’re looking for them to give real, honest product reviews,” Crockett said. “We gave them talking points in terms of product facts, but in terms of what to talk about, there’s no script.”
Even so, the program has been very effective in driving sales, with conversion rates of between 30-45% for showroom visitors.
Crockett said the Neighborhood Showroom concept had yet to be emulated, and she believed anyone who tried would be surprised at the effort required to run a program of this nature. However, the company is open to expanding Neighborhood Showroom to small businesses and is considering allowing complementary retailers to place products in showrooms.
“We calculated the cost of acquiring a new customer through Neighborhood Showroom versus the cost of acquiring a new customer through other means, and the savings are significantly better through the Neighborhood Showroom program,” said Crockett. “It’s really about building the network and letting the wheel start spinning bigger and bigger.”
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