Retail

Chairish CEO: What High-End Furniture eTail Can Learn From Designer Clothing’s eFoibles

Chairish Acquires Dering Hall

Chairish Inc., the San Francisco-based parent company of high-end vintage furniture site Chairish and interior designer-focused online marketplace DECASO, today (Jan. 16) added a new brand to its family: Dering Hall.

Founded seven years ago, the New York-based Dering Hall was founded as a discovery platform to connect interior designers with new and emerging furniture brands. The site is not transactional; it is not a place to shop, so much as a place to look and be exposed to innovative ideas and furnishings. Derring Hall represents roughly 400 different brands and counts 10,000 designers as part of its network.

Bringing in Dering Hall was compelling, Chairish CEO and Co-Founder Gregg Brockway told PYMNTS’ Karen Webster in a conversation shortly before the news was announced, because Chairish itself has undergone what he called a “significant transformation” of its own — specifically, adding interior designers as a key customer segment.

“From a customer perspective,  interior designers are our fastest growing user group. We’ve done a lot of work internally to revamp our site  to make it more interesting and intriguing for them as buyers — and that has paid off,” Brockway told Webster. “This acquisition will essentially double our interior design community in one swoop.”

An unquestionably good move for Chairish, he noted, since in the home furnishing segment, the interior designer is the MVP buyer. Unlike a regular consumer who is picking up a piece of furniture here and there, or maybe even redoing a whole room every couple of years or so, interior designers are always buying.

And, generally speaking, they’re buying big — in terms of both the number of items they buy and the price tags on those items.

Grabbing that foothold now, in hopes of really capturing that upper-end furnishing consumer, is critical because the market is moving online, albeit a bit more slowly than it has in other verticals.

“Only 10 percent of furniture is sold online today, but our experience in watching other verticals is that once it starts to move, it moves very very quickly,” Brockway said.

The Resetting Retail Landscape

Home decor and furnishing is an approximately $260 billion industry that is in the early phases of making the great online migration, a movement that Brockway said Chairish is excited to be a part of from its rather unique place in the market. Although it is far from the only player in the online furnishing business, it has the distinction of being the largest platform for high-end and vintage furnishings and doesn’t have much in the way of direct competition on that front — as of yet.

“There are going to be winners in the mass market — Wayfair has made tremendous progress there,” Brockway said. “And there are going to be winners focused on the premium and luxury end of the market. That is where we see the opportunity for Chairish.”

What fuels his thinking is the observation that what’s fueling the shopping and buying behaviors of consumers is influencing how interior designers shop as well: physical store fatigue.

“To the trade” brands, Brockway said, don’t sell to consumers directly, but through interior designers. The go-to place for those brands and those designers to meet was massive physical design centers and showrooms. But as goes physical retail, so go physical design centers: busy interior designers don’t have the time to visit multiple design centers to find what they need. So they turn to online marketplaces that make their browsing efficient and productive.

To keep their interior design customers on board, to the trade brands need to move to the digital destinations those design customers increasingly shop.

“I think we’ve seen with other verticals is that lagging behind in an exclusively old channel can be very risky,” Brockway said, “particularly when digitization really kicks into high gear.”

The Lessons That Can (And Can’t) Be Learned From High-End Fashion

The changeover, Brockway noted, isn’t going to be immediate, and there are going to be plenty of brands that are hesitant to throw themselves fully into home furnishing eCommerce. But if past is prologue, there are reasons to believe that pressure is going to push a lot of brands there, even high-end ones.

“The fashion industry is a great source of inspiration and direction for where home goods are going,” Brockway said, noting that the luxury and premium designer and couture brands were longtime holdouts when it came to eCommerce. Fearful of diluting the exclusivity of their offerings,  luxury brands might give consumers a peek online, but if those consumers wanted to buy they were going to have to hoof it to a boutique and hope the item was physically in stock.

It didn’t take long for the thinking of the luxury brands to evolve.

“They weren’t fast to get on board, so marketplaces aggregated the brands that wanted to reach these emerging digital consumers. That created opportunities for marketplaces, resellers, haute couture consignment to kind of push their thinking forward, more quickly,” explained Brockway.

The lesson there, he said, is obvious — the race goes to the swift realists.

But, he pointed out, high-end fashion and high-end furnishings have some critical differences.

First, fashion brands, particularly luxury brands, are well known to consumers whether or not they purchase them. Luxury furnishings are a very different story — with fewer “big names” that consumers would think to look for.

Second, he noted, the fashion industry doesn’t have an interior designer equivalent — consumers buy their own clothes the vast majority of the time.

“What that means is there will be a lot of answers inspired by the fashion industry — particularly around reacting in a timely way and keeping aware of changing customer behaviors — but that applications will also be a little different.”

The Future

Last year, Brockway told Webster, Chairish became the leading resale marketplace for furniture, home decor and art. That, he said, is a pretty good start — but the firm is ready to do more.

“I think with the Dering Hall deal we are looking to become the leading platform for high-end design — full stop,” he said.

Getting there, he said, is tough work and all about “the hierarchy of needs,” which starts with making sure the firm can bring together enough inventory, and enough variety in inventory to provide a comprehensive shopping experience. And there is work to do there, he said, because furnishings are a fragmented industry and there is no comprehensive space at the high end of the market.

Once that is solved, Brockway said, the next challenge is providing the right tool set to make sure the customer who is looking for a special piece of furniture can be assured that what they have found is really what they are looking for. “We have started with augmented reality tools to make those decisions easier to make,” Brockway said.

He noted there are 100,000 interior designers in the U.S., and 60,000 of them are focused residential design — and if at all possible the firm would like to make them all customers.

In the broader future, Webster wondered, would Chairish then perhaps offer to matchmake all those designers on the platform with their established consumer base?

“Could we be helping individuals with services? Potentially, but that is a little further out for us,” Brockway said. “There have been five or six startups in design services and it is a harder business to deliver on than most people think. Right now we have plenty of work — lots of potential — with building out our basics and expanding to scale.”

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