The rise of the direct-to-consumer home

The past year, one of the biggest interiors trends wasn’t a color or material—it was a business model.

A slew of direct-to-consumer companies launched in 2018 (and late 2017) offering products and services for the home: the comforter brand Buffy; the paint brand Clare; kitchen tool brands Material, Made In, and Great Jones; the dinnerware brand Year & Day; the modular furniture brand Civil, plant delivery company Bloomscape and Leon & George, contemporary furniture company Dims Home, custom furniture brands Inside Weather and The Inside, and home renovations company Block. These startups join the already established categories of direct-to-consumer mattress and bedding companies.

While these brands were launched by different people, they all look eerily similar regardless of what they sell. The tells? Crisp photography, sans-serif fonts, and pastel colors. The products themselves are basic home essentials shoppers have been buying forever—wooden spoons, plates, stainless steel pans, white sheets, paint—but they’ve been marketed to seem better and more appealing than their legacy counterparts. It’s almost as if they were all created by the same corporation—or at least read the same Cliff’s Notes. The look of Airspace is easier to get than ever, delivered from Instagram to your living room with just a few clicks.

This format began with eyeglasses a few years ago and spread to personal care items, fashion, and mattresses. Now, furniture and interiors brands have caught on. But why? It’s a medley of reasons, ranging from the popularity of social media to the changing dynamics of household composition and real estate.

Courtesy Material

Reinventing the business of home goods

Direct-to-consumer companies claim that by selling direct online and eliminating middlemen—aka retailers—who take a cut of profits, they offer lower priced, higher quality, better designed goods. And by having more interaction with customers, they learn from them so future product updates and new offerings are better targeted to what shoppers need and desire.

“Why make beautiful furniture if it can only be appreciated by a select few? Why not create great, original design that’s accessible by many?” asks Eugene Kim, founder of the new furniture brand Dims, which partners with designers from around the world to make mid-priced modern furniture. “Selling direct-to-consumer enables us to do that.”

Today there are over 400 DTC companies, which have collectively raised $3 billion in capital since 2012, according to a report in Inc. The home and interiors category is slower and harder to upend for a handful of reasons. Shipping large items, like furniture, is a logistical nightmare. The price point for home goods is often higher than apparel and personal care items. And people live with their home goods for a lot longer than they do most other products.

The home furnishings sector—which includes things like couches, mattresses, tables, chairs, desks, kitchenware, decorative accessories, wallcoverings, and curtains—is worth an estimated $136 billion and has been controlled by established companies. But that may change since consumers have been dissatisfied with them.

Pier 1 and Bed Bath & Beyond are experiencing declining sales and their stock has nosedived. In a bid to win over younger shoppers, Pottery Barn restrategized around small-space living. Ikea, which has relied on customers trekking to its box stores, is playing catch up on e-commerce and experimenting with smaller stores in urban centers. Meanwhile, millennials are establishing homes and spending money on related purchases. Direct-to-consumer brands offer an alternative.

“Across the home space there’s been a lot of sort of oligopolies—a few companies that dominate,” says Nicole Gibbons, an interior designer and founder of the direct-to-consumer paint company Clare. “If you think about home furnishings, you’ve got the Williams-Sonoma companies and the Crate and Barrels and I think it leaves younger customers feeling two things: There’s a lot of monotony in terms of product offerings and these legacy brands aren’t marketing to them...They want more variety, a brand they care about, and I think the market is ready. There hasn’t been a lot of disruption in home.”

These brands hew to a familiar playbook: Offer a nice, but safely, designed product. Improve price transparency. Simplify choice. Emphasize transparency about manufacturing and price. Speak with a witty, but direct tone. Use minimalist visuals to reinforce the idea of honesty, value, and straightforwardness. Streamline experience, which usually takes the form of easy returns, communicative customer service, and a navigable and shoppable website.

While furniture buyers still want to see large items in person before committing, e-commerce is becoming more important to browse options and eventually make a purchase. Investors, hungry for the next Warby Parker or Casper, are pouring money into direct-to-consumer home brands, sensing an opportunity to seize market share—or just not wanting to miss out on “The Next Big Thing.”

Just this year Floyd, a direct-to-consumer furniture brand based in Detroit, raised a $5.6 million round of funding; Burrow, a flat-pack sofa company, raised $14 million; Parachute Home, which began as a linens company but has expanded to home decor, raised $30 million. Year & Day received $2.4 million.

To help these companies reach new customers and scale, branding enters the picture.

Building a brand that speaks to a changing market

Design often plateaus once the platonic ideal of a product becomes established—like mobile phones have all become slight variations on slim glass rectangles. And while an iPhone and Dutch oven don’t seem like they have much in common, they do when it comes to appealing to the psychographics of shoppers who appreciate, and will pay for, thoughtful design.

Apple mainstreamed good, minimalist design in the early 2000s, and according to Anthony Sperduti—cofounder of the creative agency Partners & Spade, which has worked with direct-to-consumer brands like Casper, Warby Parker, and Harry’s—it changed what consumers desire from all of their consumer goods, not just tech.

“The first wave of direct-to-consumer brands born on online—like Warby Parker and Harry’s nine years ago—were really able to take some of those great lessons from brands like Apple and apply them,” he tells Curbed. “Combined with good economics, you have fresh minds offering value and better design than more mature companies that have dated views of design and marketing. You have enough of those, then you have social media, and it starts to become almost a movement.”

I asked Jonah Fay-Hurvitz, strategy director at Red Antler, the agency behind Burrow, Casper, Snowe, and Brandless about the sameness in direct-to-consumer companies’ visual identities. He mentioned that leading brands share similar values—quality, design, transparency, and inclusivity—and that’s led to a new, higher standard for baseline design.

“Most aesthetic similarities are seen in photography, but that’s largely trend-based and reflective of what’s happening in broader culture, which is constantly changing,” he tells Curbed via email. “It’s true that many e-commerce sites have a similar structure, but that’s the result of following digital best practices based on how people like to shop. It’s kind of like how in physical retail spaces, most stores are set up generally the same way.”

When Kathryn Duryea, founder of the table setting company Year & Day, contemplated branding for her company, which was designed in house, she knew it had to speak to the changing dynamics and demographics of people who are starting to form their homes, like more single-person households and more same-sex couples than before. A modern, but neutral, identity achieved that.

“In some instances, brands—particularly heritage [tableware] brands—have product design and marketing that are very female oriented,” says Duryea, who has worked in luxury retail for 10 years. “Today’s consumers are men and women who are equally interested in participating in household decisions. It was important to have a brand that felt gender-neutral and that was something we were able to achieve in Year & Day.”

For Eunice Byun, founder of Material, mass appeal was also important. She and her cofounder, David Nguyen, saw changes in the needs of home cooks from shifts in living habits—more people in small spaces, more people wanting to express themselves through cooking and share that on social media, seniors downsizing—and wanted a brand that appealed to them, but also shoppers who just want a quality product regardless of where they live.

Consumers, overall, have gotten smarter. As they shop across categories, they expect higher quality products and expect to afford them, Byun says. Material’s customers include millennials who want to upgrade and people who’ve owned their knives for 40 years and need them replaced. They’ve shipped to 49 states and, even though they only sell domestically, they have customers in 12 countries. She attributes this mass appeal, in part, to brand messaging.

“When you’re a direct-to-consumer brand, one of the hurdles is not making it feel so slick or something where people can’t connect to the story,” she says. “A more conversational tone, with winks and nods, says ‘We see you and get you and know the issues you have.’”

To Ariel Kaye, founder and CEO of Parachute Home, one of the first direct-to-consumer home startups, her business model isn’t about a flavor-of-the-month brand; it’s a way to keep connecting with her customers and developing products that they need and want.

“It’s not just about the first purchase, the cool website,” she says. “It’s, ‘How do we foster a life-long relationship and grow with customers?’ We don’t want them to grow out of us.”

Courtesy Order

New and improved?

When products start to look and feel like they’ve all been yanked from the same Instagram ad, is it good for consumers?

Fay-Hurvitz of Red Antler, which often invests in the companies it brands, thinks so. “People want to know a lot more about what they are buying, from the design philosophy, to where materials are sourced, to how it’s manufactured, to who’s behind the company,” he tells Curbed. “Their threshold for quality has increased, as new business models have given way to higher standards at more accessible price points. And we all know that once you experience true quality, there’s no turning back.”

But satisfaction is not guaranteed. The Goods reporter Rebecca Jennings tried dozens of these new brands—including home furnishings from Casper, Brooklinen, and Material—and it nearly broke her.

“Doing that once is interesting,” says Jesse Reed, cofounder of the design studio Order, which recently worked with the furniture company Floyd on a new logo and custom font for their type-based visual identity. “But when five new startups do it and you see them week after week when they do a subway buyout, it’s a question for consumers: Can you tell the difference between one or the other? Is it a disadvantage to fall in line?”

Courtesy Inside Weather

However, just because a new business model works for some products, it’s not a recipe for guaranteed success. Take the late furniture brand Dot & Bo. Despite targeting millennials and receiving $20 million in venture funding, the company closed in 2016. Its CEO cited supply chain difficulties and tight margins. (In 2017, Open Sky bought the brand and its assets.) This fall, former Dot & Bo COO Ben Parsa launched Inside Weather—which sells flat-pack midcentury inspired furniture—and thinks this time, he’s got it right with the direct-to-consumer brand model—and better inventory management.

“All of the sudden, people don’t want to wait six to 12 weeks for their furniture, they don’t want to hire movers, and they expect something more from their consumer experience than just the relief of finally getting it set up inside their homes,” Parsa tells Curbed.

Anthony Sperduti sees a tipping point in the future.

“What’s ultimately going to happen is people are going to get bored with everything having the patina of a direct-to-consumer brand aesthetic that’s slightly witty and tasteful,” he says. “I think it boils down to the same thing: How does the product stack up to the rest of what’s being sold? And that has very little to do with branding.”