How Outer is taking over the Australian outdoor furniture market, one customer backyard at a time

How crowdsourced retailing is helping this online furniture brand build consideration

One of the common challenges facing direct-to-consumer brands is getting products into the hands of would-be consumers before they purchase.

Sellers of smaller items such as footwear and clothing have often surmounted this obstacle with generous returns policies. But for bulkier items such as whitegoods or furniture, the logistics soon become unmanageable.

This was the challenge that faced Jiake Liu and Terry Lin, founders of the four-year-old Santa Monica-born outdoor furniture marker, Outer. Rather than pursue the costly option of investing in showrooms to support their global expansion ambitions, the pair decided to see just how far their customers’ love for their products could extend.

The result is the Neighbourhood Showroom program, which recruits Outer customers to become de facto showrooms by opening their backyards to interested shoppers.

Outer chief marketing officer, Corinne Crockett, said the company now has over 1000 Neighbourhood Showrooms across the US and has recruited a further 12 locally since opening in Australia a year ago.

“Many brands invest in expensive brick-and-mortar retail and hire salespeople, but what we thought is, what if we could crowdsource our retail locations?” Crockett told CMO. “And that is what Neighbourhood Showroom is – crowdsourced retail.”

The idea borrows heavily from the sharing economy ethos of Airbnb and Uber, extended into retail. However, Crockett said outdoor settings represent one of the few examples where the model can be practically extended to furniture.

“You don’t really want to invite someone into your bedroom to show them your mattress and test that out, but you may easily invite someone into your backyard to check out your furniture,” she said.

Crockett said Outer has had no trouble finding Neighbourhood Showroom hosts, who are all selected from the ranks of existing customers. Each host is vetted and background checked and receives a small payment each time they open their backyard to shoppers. However, that the financial incentive is usually not the strongest inducement for hosts to sign up to the program.

“When we first launched the program, we anticipated people would care a little more about the monetary side, but as we grew to understand who our customers were, it really was about being part of something, so we steered our perks to be very community focused,” Crockett said. “People talk with our founders pretty much every day. They help shape our business the way they want to see it, and we love exchanging information with them.”

Another factor that makes the Neighbourhood Showroom concept work is that Outer does not constantly refresh its product lines. Crockett said this alleviates concerns that hosts’ furniture will become out of date.

“The wicker furniture set we sold four years ago when we launched is the same wicker set we are selling today,” Crockett said. “We are about creating functional pieces that are durable, comfortable and innovative, so we don’t change our styles seasonally.

“So we are not worried the Neighbourhood Showroom is not going to be updated, because we are only adding to our styles. We are not ever going to go to seasonal inventory - that is not the kind of business we have built.”

Outer has also been careful to ensure conversations between its hosts and customers are as natural as possible.

“We don’t pay them a commission because we are not looking for them to be salespeople, we are looking for them to give real, honest reviews of the product,” Crockett said. “We have given them talking points in terms of facts about the products, but in terms of what to talk about, there is no script.”

Even so, the program has been highly successful for driving sales, with conversion rates of between 30 to 45 per cent for showroom visitors.

Crockett said the Neighbourhood Showroom concept is yet to be imitated, and she believed anyone who tried will be surprised by the effort required to run a program of this nature. However, the company is open to extending Neighbourhood Showroom to small businesses and is investigating allowing complementary retailers to place products in the showrooms.

“We calculated what the costs are to acquire a new customer through Neighbourhood Showroom versus the cost of acquiring a new customer through other means, and the economics are dramatically better through the Neighbourhood Showroom program,” Crockett said. “It is really about building up the network and letting the flywheel start to run bigger and bigger.”

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