The D2C model enters the patio furniture market

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Do a web search for outdoor furniture and you might doubt that the whole outdoors can hold such a record number of patio furniture pieces to help you get the most out of your self-locking. prolonged.

Among the expected search results from Amazon to Wayfair, try adding “teak” to your search and chances are you will find Neighborthe Phoenix-based startup on a mission of sustainable nesting.

A former mattress and bedding company Tuft & Needle, Nicolas Arambulaco-founder and CEO of Neighbor, told PYMNTS that the outdoor furniture market is “kind of a barbell market where, at one end, you have very low-priced, low-quality products. At the other end is some incredibly high quality and really expensive stuff. These materials, we believe, should still be accessible to a consumer who doesn’t necessarily want to spend $3,500 on an occasional chair outdoors.

The company launched in 2020, and it was a year that hurt and closed many businesses. But the first year of the pandemic turned out to be a good time for direct-to-consumer outdoor furniture.

“There was a big rush on home-related products and a lot of people were investing in their outdoor space,” he said. “We had a budget for January, and we hit it on the fifth day of the month.”

After completing its Series A funding in March, Neighbor is ready to move on with three initiatives that will see the fast-growing company scale and get its signature look on more patios. Saying he hopes Series A is the last capital Neighbor wants to raise, Arambula noted that the company is profitable and intends to stay that way – and that it intends to use the injection of cash to build his team “a little faster”. clip than we thought and help accelerate the company’s growth. »

Marketing is number two on its list – with a priority on diversifying its channel mix.

And last, but certainly not least, comes an expansion of what Arambula admits is a pretty focused product offering right now.

“If you go to our site, it’s the Haven collection plus some accessories,” he said. “We plan to ideally launch three to four additional collections over the next 18 to 24 months.”

See also: From beds to bird feeders: Expanding home improvement category prolongs nesting trend

The price of nesting

But all is not rosy. Inflation is hitting durable goods like everything else, and patio furniture is feeling the pinch.

Arambula understands the impact of material costs on pricing. The first container of teak the company shipped from Vietnam cost $4,000, and the last one cost nearly six times as much, or $22,000.

“Sea freight has just skyrocketed in cost compared to what we’re trying to do,” he said.

Neighbor raised prices in 2021 to cover soaring costs and stay profitable, but prevailing winds say remote working isn’t going away, meaning demand for decking products is likely to hold. Noting that the average order value for a nearby buy hovers around $4,500, Arambula said the rapid growth the company has seen in 2020 and 2021 appears to be shrinking a bit — but not to an alarming level.

While direct-to-consumer selling is their forte, the company is developing other channels, including retail partnerships with Crate & Barrel, Huckberry, Houzz, and AllModern.

“We have a pretty large subset of commercial clients who buy from us on behalf of someone they can design a space for,” Arambula said. “Although it’s primarily our site that sells to someone, we’ve developed a good relationship with this type of business demo which makes up a pretty good portion of our customer base.”

Read also: Three pandemic nesting trends likely to continue into 2022

A lasting trend

Partnering with Crate & Barrel just months after its founding paid off for Neighbor two years ago, and it continues as this D2C brand reflects on its good neighbor.

“For us, as a four- or five-month-old brand, having consumers see on an Instagram ad that we run at Crate & Barrel lends a lot of credibility to a brand that otherwise might not necessarily be as trustworthy because she is so early,” Arambula said.

While the company isn’t seeing “abnormal” ROI from the social media ads it ran from January to April 2021, word is spreading of the outdoor furniture brand with a sustainable ethos and superb teak chairs.

The original idea of ​​using exceptional materials – high-end solution-dyed acrylic fabrics, teak wood, powder-coated stainless steel – and delivering them “at a more acceptable price” remains the platform’s marching orders. form, which is being expanded. .

Saying, “our goal as a company is to navigate over time to use only recycled fabrics or at least a component of recycled fabrics in all the items we sell,” Neighbor is working with a company called Polywood “who uses recycled milk jugs to build some kind of lumber out of plastic, then make a modern version of an Adirondack chair”.

For Arumbula, it’s all about the new owner – with a highly personalized personal vision of what this home looks like.

Noting that millennials and “people buying homes at that age range are buying homes much smaller than their parents,” he said, “people are recognizing that they need to make the most of the space they have”.

A smaller house, a smaller outdoor space, “but they will want to try to have as much usable square footage in their home as possible. The idea of ​​investing in your home, in a place where you can nestle, feel comfortable and create a haven of peace, does not go away.

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NEW PYMNTS DATA: WHY PATIENT PORTALS ARE BECOME TABLE TOPS FOR CONSUMERS

On: Patient portals have become a must-have for providers, so much so that 61% of patients interested in using the tools say they would choose a provider that offers one. For Accessing Healthcare: Easing Digital Frictions In The Patient Journey, a collaboration between PYMNTS and Experian Health, PYMNTS surveyed 2,333 consumers to learn how healthcare providers can ease digital pain points to improve care and satisfaction. patients.

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