Article CEO and co-founder Aamir BaigKitt Woodland/The Globe and Mail
Here’s how it happened: During the pandemic, a young professional in a North American city found herself stuck at home, working from her kitchen table, or worse, her sofa. Eventually, maybe mid-Zoom call or while placing an online grocery order, she looked up from the computer screen and realized she wanted—no, needed—to change up her space. So, she navigated to article.com, where she spent $2,000 on a velvet-upholstered sofa with mid-century modern lines and $800 on a sleek walnut desk. Then, it happened again and again and again, with other people in other cities across Canada and the U.S., to the tune of 220,000 new customers and 70% year-over-year growth in revenue for the Vancouver-based direct-to-consumer furniture brand.
It’s not surprising to learn that Article saw a sales boost during COVID-19; for retailers in the home decor space, the pandemic provided an excellent climate for growth. According to market research firm NPD, “unit sales in the home industry grew 25% over the first quarter of 2020.” People became aware of their environment and wanted to make it more comfortable. “This accelerates the overall demand,” explains Chunhua Wu, associate professor in the marketing and behavioural science division at UBC’s Sauder School of Business. “But beyond that, lockdowns also shift consumers’ channel choices.” With many retailers shut down, or at least limiting how many people can shop in-store, customers’ attention is directed to online stores—especially those with a reputation for convenience and good customer service, like Article.
But it’s what the company did before the pandemic that set it up for success.
Back in 2011, Article CEO and co-founder Aamir Baig was thinking about the next problem he wanted to solve. He’d previously co-founded Etilize, an e-commerce database of photos, titles, product descriptions and specifications for more than 20 million electronics. Next, he wanted to tackle a meaningful problem that affected many people. Along with his co-founders, Andy Prochazka, Fraser Hall and Samuel Prochazka, he settled on upending the “painful” process of shopping for furniture—though not because of any particular interest or background in home decor.
“We landed on furniture as the vertical to try it on because it’s far easier to fill containers with furniture,” Baig says. “Initially, the idea was called Fill the Container, because literally, the product would come off the factory floor, into containers and into people’s homes. But as we got deeper into furniture, the model changed completely.”
As they learned about the sector, they saw the tribulations experienced by consumers when trying to furnish their spaces. By launch, Article’s mission was to offer customers the “easiest way to create a beautiful, modern space,” with emphasis on the “easy.” At the time, there were few, if any, options for buying furniture online, and the co-founders knew they’d have to overcome shoppers’ resistance to making big-ticket purchases without being able to touch and see the merchandise. So, they made convenience one of the company’s core values, alongside style and value.
One key to delivering all three is proprietary e-commerce software that streamlines every possible process, from sourcing and purchasing raw materials to managing Article’s warehouses to checkouts, and allows these different functions to “talk” to one another to find efficiencies and improve customer experience. For example, Article’s inventory and routing systems are integrated, so the site can display real-time delivery ETAs based on customers’ zip or postal codes. And since the software code for this application belongs to Article, it can remove extraneous parts or customize based on its own needs, without putting in a request to a third-party developer. Over the past few years, Article has focused on controlling more of its supply chain, particularly on the shipping side, by building fulfillment centres across North America and hiring an in-house delivery team. The result? Customers can order beautifully designed modern furnishings in just a few clicks—and get it delivered just as seamlessly.
These innovations helped the company grow even before COVID, but during the pandemic, they became a differentiating factor. As shoppers tried to spruce up their homes with new furniture, supply-chain woes led to months-long delays, not to mention lost revenue for Article’s competitors. Overseas, factories faced increased demand, shortages in raw materials and an unpredictable workforce, as workers might get sick or have to quarantine after coming into contact with someone else who did. On top of that, high demand meant shipping containers were scarce and expensive. Crowded ports also made it difficult to import products. It’s no wonder La-Z-Boy recently reported it lost out on $30 million in sales in the first quarter of 2021 due to manufacturing and shipping delays. Article wasn’t immune to these factors, Baig says, but previous efforts to “re-architect the supply chain” meant it was still able to deliver most of its orders within two weeks.
Wu says Article’s ability to be nimble sets it apart from its competitors in the direct-to-consumer space. “Before the pandemic, many of these retailers adopted a lean model—it was more of a ‘just-in-time model.’ They didn’t want to hold onto much inventory. But with the pandemic, companies needed more buffer. Article has made sure they have that buffer.”
And while North American consumers are beginning to spend more time outside their homes, Article’s growth hasn’t yet slowed. This spring, sales for the company’s 2021 outdoor collection were 450% higher than the same period in 2020, and May 2021 was its biggest month ever.
But Baig is still focused on problem-solving. His next goal is figuring out how to provide customers with an option to completely furnish a space to their tastes within a few days, instead of spending months shopping around for pieces of various qualities from different retailers with staggered delivery times. “We’ve always had high aspirations and a strong belief in the differentiated and better-value proposition that we’re bringing to the market,” he says. “The pandemic, made it very clear [that we’re an option] to a market that was not even considering things online. That keeps us excited. It makes the problem harder for us to solve—but it’s a good problem.”
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.