Where are the customers?
In the home accents business —as in any business — one of the biggest challenges is how and where to acquire new customers. The process is much more expensive than retaining existing ones, experts say, and the cost of acquiring new customers digitally has increased somewhere between 50% and 60% in the last several years, according to various industry estimates. According to SimplicityDX, a company that helps brands optimize social commerce experiences, the introduction of Apple’s iOS 14.5, which limited in-app tracking; the demise of third-party cookies and increased privacy legislation have limited the ability to measure the success of digital advertising and compounded the challenges for brands vying for consumers’ attention.
But do not despair. Whether you are a manufacturer, a retailer or an interior designer, there are new and inventive ways to expand your home décor business or build your brand, as these following case studies can attest.
Consider a new setting
Consumers who can’t get enough of TJX Cos. brands had a unique opportunity last fall to fully immerse themselves in the House of HomeGoods, an atypical vacation rental home In Hudson Valley, N.Y. completely furnished with products from the off-price retailer. The weekend getaway home was available on a first-come, first-served basis for four weekends last October and November for $29.99 a night.
The two-bedroom property was outfitted with pieces typically offered at HomeGoods, including chairs, tables, lamps, rugs, mirrors and textiles. The decorating theme and the corresponding merchandise changed each weekend, beginning with Find Festivity, which included bold and colorful items, and ending with Find Charm, with designs inspired by a European town.
Along with the rental, HomeGoods paired the stay with an at-home activity to complement the experience and offered renters a custom suitcase they could pack with goods valued up to $599 to take home with them.
“We’re excited to offer consumers this bookable getaway that transforms with each stay to create a truly unique experience for guests, just like shopping at HomeGoods,” said Sarah Ajamian, manager of marketing for HomeGoods.
The Home Depot offered a similar experience last October by pairing up with Vrbo, the online vacation home marketplace, to outfit a four-bedroom, six-bath home in The Berkshires in Massachusetts with merchandise from The Home Depot. It included goods from the Home Decorators Collection, Stylewell and The Company Store, all of which are owned by the home improvement retailer.
Products were selected to both enhance the guest experience and accommodate the kind of usage numerous visits to a vacation rental typically receive, said The Home Depot, which worked with several design firms to pull the look together.
HomeGoods could not be reached for comment and The Home Depot declined comment for this story.
Retail consultant Steve Dennis, author of “Remarkable Retail,” said these two experiments feel more like brand-building or advertising than about new customer acquisition. “It’s a very expensive way to acquire customers,” he said, considering the cost of setting up these vacation homes and then renting them out to a limited audience for a limited time.
But Dennis is in favor of trying different ways to get in front of potential customers. “I’m a big fan of experimentation,” he said. “Most companies don’t do enough experimentation.”
Create a vacation rental experience
Some boutique retailers and manufacturers are taking advantage of the explosion in the number of vacation rental properties to get in the supply game from that angle.
Michael Almodova, CEO at California lighting company Mavisten Edition, said his company partnered with vacation rental company Sonder since they were looking for “bespoke designs that accentuated their branded environments, functioned well and were durable over time.”
Almodova said the partnership is going well since his company has custom-designed and shipped more than 40 containers of lighting within six months. But he does have some advice to offer for those wishing to work with vacation rental suppliers.
“Be careful with the business relationship and listen to each company’s needs,” he added. “Watch out for companies that want bespoke design but also want to have a secondary or back-up supplier. If a company wants bespoke designs, the partnership should be on both sides to grow the business together.”
One of the downsides to working in this sphere, Almodova said, are the ups and downs of the vacation industry.
“As with any hospitality group, product orders are dependent on the company’s economics and growth plan. Although there can be times of extreme demand, there can also be periods of drought. We often say vacation rental companies are like a golden dragon: sometimes it’s sleeping, and sometimes it wakes up and is super hungry.”
Interior designer Jessica Duce, owner of JDuce Design, LLC, agrees that the field is booming.
“There are short term and vacation rental properties everywhere,” Duce said. “The unique aspect of this is that you are creating a designed space or spaces that will need to be replenished and maintained. In addition, the property owners need a fresh look every few years. This becomes a continual source of revenue.”
Duce said that in her experience the focus is more on the boutique products and goods placed in the rental than in the designer that implemented the design. One of the ways for consumers to get that direct connection to the décor supplier is by placing QR codes on the items in the rental.
“We have just begun using QR codes for an upcoming property in High Point,” Duce added. “We are also looking into affiliate links. We love getting the focus on local boutiques and artists. Guests continually ask for experiences with their short-term rentals which this provides.”
Duce is working with the HPxD group and its managing director Jane Dagmi as well as the High Point Market Authority to host a Vacation Rental Design Summit on April 20-21 in High Point. Dagmi said the summit will take a deep dive into the role design plays in short-term rental success.
“As an editor, I have interviewed many interior designers. And more often than not, when asked about what project is on their bucket list the reply has been to design a boutique hotel,” Dagmi said. “Designing vacation rentals has made breaking into hospitality much more accessible.”
Inhabitr, a logistics company that works with local furniture retailers to handle excess inventory by offering it for rent or sale, has also begun working with vacation rental providers.
“One of our providers had a strategy focusing on larger high-end homes and villas,” said Kai Lu, Inhabitr vice president of marketing. “Each property has a distinct and unique style. We came in to help them customize and personalize each home and provided them with the turn-key services, while dealing with nuances and streamlining the design, procurement and logistics process to provide our vacation rental partner with holistic and hassle-free services.”
Lu said that particular client had a design strategy to feature four major styles: desert, coastal, mountain and country. Inhabitr’s design team offered different colors for each style and curated specific artwork for the locations. For example, it used cowboy-themed artwork and décor for a property in Texas.
“Capturing the cohesiveness of the rental space in terms of feel, visual ambience and functionality is integral to the property’s rental value,” Lu said. “Our furnishings and home accents help Airbnb operators as our vacation rental service is convenient and helps keep short-term rentals fresh and trendy.”
Consider third-party selling
Oklahoma City-based Mathis Home has embraced the marketplace model, following an example set by Amazon and followed by several other retailers such as Walmart, Target and Macy’s.
Through a new partnership with advanced enterprise marketplace SaaS platform Mirakl, the furniture and home décor store has extended invitations for third-party, home and home-adjacent vendors to sell to its consumers directly from its website.
Rit Mathis, chief marketing officer for the family-owned retailer, told sister publication Furniture Today that by offering more home products beyond furniture and décor, Mathis Home is strengthening its position in the market. Its marketplace offerings include categories like pots and pans, bakeware sets and coffeemakers.
“It’s an opportunity for us to take what is already a competitive advantage we have in being the selection leader in our marketplace and take it to a whole different level,” Mathis said. “We saw how a marketplace approach transformed Amazon’s business by not feeling like they had to handle all the first party inventory themselves, but to add a whole host of third-party sellers to their offering. It made their e-commerce experience powerful.”
The launch of Mathis Marketplace, with implementation supported by Mirakl, allows the company to significantly expand the products it offers its customers, partnering with brands to grow beyond furniture and mattresses into new categories such as baby, kitchen and home organization.
“Adding sellers to a marketplace is one of the most important strategies that a retailer can take to expand their marketplace business. The marketplace seller opportunity is extremely appealing for businesses: last year, the number of businesses that began selling on marketplaces increased by 46% over 2020,” said Sophie Marchessou, executive vice president of customer success for Mirakl.
Mathis Home expects to add dozens of curated third-party vendors and hundreds of thousands of new products by the end of 2023, all of which are included in the Mathis Rewards Program. Marchessou noted that Surya is among the companies Mathis Home is using to expand into other categories in its marketplace.
Surya CEO Satya Tiwari said Mathis’ third-party marketplace opportunity was “music to my ears.”
“We could help our customers take it to the next level,” Tiwari said. “E-commerce is a channel where anyone, including a small regional retailer, can go on to amplify their message.”
Kaci Crane, Mathis Home’s e-commerce marketplace director, said to-date, Mathis Home has established relationships with around 150 vendors and has room for more.
“There are multiple ways we engage with the sellers. On our website, we have a link where you can inquire to be a marketplace seller. The second is the Mirakl Connect platform. That’s where all these sellers live,” Crane said. “As the name says, it’s a connection tool. You build a profile. We’ve created pitch decks and sales tools to inform people who we are. They can connect to us, or we can connect with them. Outside that, we’re working with aggregators who have these relationships as well who can directly connect us with vendors.”
Mathis said expanding Mathis Home’s offerings is also about learning more about today’s consumer and letting her say what she wants.
Dennis, the retail consultant, was cautious about the value of third-party marketplaces for smaller retailers because of their potential to dilute a retailer’s market position if an assortment is too broad. “You must think about the customer experience,” he said. “[Third-party marketplaces] can make it hard for customers to understand what your core values are.” You also run the risk of losing quality control when dealing with multiple drop-shippers across multiple categories, especially those with which you are less familiar.
Nonetheless, Mathis is optimistic.
“For us, it’s not just about selection. It’s also about finding adjacent categories where we might find growth. We’ve got giant showrooms and we still don’t have room to show everything we want,” Rit Mathis said. “I think it could inform some pretty serious changes in what our floor looks like. We’re prepared to learn things about what we should or shouldn’t carry.”
Hit the road
Domaci Home owners Warren and Derrick Clark closed their brick and mortar store for good last month and are taking their business on the road — literally.
They are outfitting a 14-foot mobile stage trailer to sell accent furniture, décor and accessories at festivals and events in the same way that food trucks do.
“Instead of the people coming to us, we’ll go to where the people are,” said Warren Clark.
Domaci Home, which is based in Bethlehem, Penn., will also continue to operate its website, which it launched before it opened its brick-and-mortar store in 2016. The website accounted for roughly 30% of its sales in 2022 (down from 50% in 2020.)
The mobile trailer enables Domaci Home to focus on the things that generate more money, such as everyday essentials and items like candles and other decorative accessories. It eliminates a certain amount of overhead and will save a lot on rent. The concept is unique, acknowledged Clark. “I don’t know anyone else who is doing [it],” he said. “We’re excited about it.”
Retail Consultant Pam Danziger, founder of Unity Marketing, was intrigued by the concept and considers it a great add-on to a business. “I really like that,” she said.
The trailer costs about $20,000, with additional costs for customized fixturing and signage. In good weather, its sides can fold down, doubling its square footage. The interior space is about 200 square feet, enough room for floor samples of accent furniture and bookshelves filled with decorative pieces. A digital kiosk shows additional product options online.
The Clarks already have a few events circled on the calendar that they plan to participate in, including Bethlehem’s annual summer music festival, in which the local streets are closed for 10 days, and a potential arrangement with a local restaurateur for a block party in the late spring. It also plans to attend wedding and home shows, like the Lehigh Valley Home & Garden Show, to reinforce the fact that it is still in the furniture business, Clark said.
They have reached out to their vendor partners and their protected brands to reassure them that business will carry on as usual. “I see us doing as much or more [in sales] as we did in the past,” Clark said. “This keeps us more nimble if things get rough in 2023. Things are uncertain now. We’re definitely not on the high we were in in ’20 and ’21.” —Joanne Friedrick, Thomas Lester and Anne Flynn Wear contributed to this story