Direct-to-consumer (D2C) artisan home décor brand The Citizenry is making a post-pandemic pivot to physical retail stores after a year of rapid growth fueled by the red-hot nesting trend spurred by the pandemic.
The brick-and-mortar transformation plan was included in the company’s Tuesday (June 29) announcement that it had received a $20 million investment from consumer goods private equity firm NextWorld Evergreen.
The Citizenry, founded in 2014, partners with artisans around the world to curate collections of home goods. The investment, The Citizenry said, will further the brand’s plans of expanding product lines, including its in-demand furniture pieces, as well as opening several retail stores “to meet … customers and community in all the places they want to engage.”
Thanks to online browsing and shopping, Citizenry Co-Founder Rachel Bentley said, it’s never been easier to purchase furniture, but because “most online decisions are driven by price, it’s been a race to the bottom in terms of quality,” leading to unhappy customers and increased waste.
In expanding its furniture line, Bentley told PYMNTS, the brand is increasing access to “thoughtfully-crafted” pieces at an affordable luxury price point — something that customers have been clamoring for.
The Citizenry’s furniture line is the most-clicked segment of its website, accounting for 15 percent of the brand’s sales. By 2025, The Citizenry hopes furniture will account for 30 percent of its sales.
NextWorld Evergreen has previously invested in beauty brands Credo and W3ll People, as well as several food and beverage companies, such as Van Leeuwen ice cream and Peet’s Coffee. This is the first home décor brand in NextWorld Evergreen’s portfolio.
In partnering with NextWorld Evergreen, The Citizenry Co-Founder Carly Nance said the brand will get access to the firm’s “deep expertise in omnichannel retail and ESG.”
“Most importantly,” she added, “their guiding principles closely align with the vision we have been working to build since day one.”
Tiffany Obenchain, partner at NextWorld Evergreen, said the firm’s investment in The Citizenry “embodies our commitment … to build the next generation of consumer brands that drive positive social and environmental change.”
A Base Of Bridge Millennials
Since closing its Series A funding round in December 2019, The Citizenry has seen sales grow 200 percent, with repeat customers driving 45 percent of sales.
In December — after six months of COVID-induced delay — the brand opened its flagship store in the Soho neighborhood of New York City, which it says will serve as a model for future retail expansion to other markets. The offline market still represents most of the consumer spend in home goods, Bentley said, and “there is an experiential element of a physical store that online shopping will never be able to replicate.”
The Citizenry’s customer base is mainly bridge millennials who are investing in their homes, the company said, with 42 percent millennials and 32 percent Generation X.
According to PYMNTS How We Will Pay study, bridge millennials — those around 36 years old who are younger than Gen X consumers but older than most millennials — have an average income of $95,000 per year, making them a lucrative demographic for retailers and a potential bellwether for how connected commerce will evolve.
“Ultimately,” Bentley told PYMNTS, “the best way to serve our customers is creating an omnichannel brand to meet them however and wherever they would like to shop.”
Since early 2020, consumers have mainly been stuck indoors to prevent the spread of COVID-19, and all that time in the confines of the abode is bound to make people think about redecorating.
Even as the economy reopens and consumers return to socializing in public spaces and other people’s homes, home décor brands are confident that sales won’t dwindle. In fact, several home improvement and furnishings retailers last month reported strong quarterly earnings, with Home Depot’s same-store sales surging over 30 percent from a year ago and Wayfair reporting a 41 percent year-over-year sales boost.
Wayfair CEO and Co-Founder Niraj Shah told investors and analysts that the company has also noticed an expansion in the items that consumers are purchasing. Whereas early in the pandemic people rushed to spruce up home offices and build home-school areas for kids, consumers are now making purchases across almost all of Wayfair’s departments.
“The pandemic has fundamentally increased the share of wallet customers will spend on their homes in the future and the amount they will spend online,” Shah said.
Bentley also said this is an exciting time for the home décor industry.
“People are thinking completely differently about their lives — they’ve moved cross-country or they’ve redesigned their spaces to facilitate working from home,” she told PYMNTS. “Those new spaces will require investment to become comfortable, thoughtfully decorated homes.”