D2C model enters the outdoor furniture market


If you search the web for patio furniture, you might doubt that the entire outdoor space could contain such a record selection of patio furniture for you to make the most of your self-extended lockdown.

Try adding “teak” to your search amidst the expected search results from Amazon to Wayfair and chances are you’ll find what you’re looking for Neighborthe Phoenix-based startup on a sustainable nesting mission.

Former mattress and bedding manufacturer Tuft & Needle, Nicholas ArambulaCo-founder and CEO at Neighbor, PYMNTS told that the outdoor furniture market is “kind of like a barbell market where you have really cheap, low-quality stuff at one end. On the other end there is incredibly high quality, really expensive stuff. We believe these materials should still be accessible to a consumer who doesn’t necessarily want to shell out $3,500 for an occasional outdoor chair.”

The company was founded in 2020, and that was a year that hurt and shut down many companies. But the first year of the pandemic proved a good time for direct-to-consumer outdoor furniture.

“There was a big rush for household products and a lot of people were investing in their outdoor space,” he said. “We had a budget for January and we hit that on the fifth day of the month.”

After completing its Series A funding in March, Neighbor is poised to advance three initiatives that will scale the fast-growing company and bring its signature look to more patios. Arambula said he hopes Series A is the last capital Neighbor wants to raise, noting that the company is and wants to stay profitable – and that it intends to use the cash injection to help its team grow “a little faster.” “Build Clip up more than we thought possible and help accelerate the growth of the company.”

Marketing is number two on his list – with a priority on diversifying the channel mix.

And last but not least comes an extension of what Arambula admits is a fairly focused product offering right now.

“If you visit our website, you’ll see the Haven collection plus a few accessories,” he said. “We plan to ideally launch three to four more collections over the next 18 to 24 months.”

See also: Beds to Birdhouses: Expanding the DIY Category Expands the Nesting Trend

The price of nesting

But not everything is going smoothly. Inflation is hitting durable goods like anything else, and patio furniture is suffering.

Arambula understands how material costs affect pricing. The first container of teak that the company shipped from Vietnam cost $4,000, and the last one cost almost six times that – $22,000.

“Ocean freight costs have just skyrocketed compared to what we’re trying to do,” he said.

The neighbor has raised prices in 2021 to meet rising costs and remain profitable, but prevailing winds say remote working is not going away, meaning demand for decking products should continue. Noting that the average order value for a Neighbor purchase is around $4,500, Arambula said the company’s rapid growth appears to be slowing somewhat in 2020 and 2021 — though not at an alarming level.

While direct-to-consumer is its sweet spot, the company is developing other channels, including retail partnerships with Crate & Barrel, Huckberry, Houzz, and AllModern.

“We have a fairly large subset of retail customers who buy from us on behalf of someone they might be designing a space for,” Arambula said. “Although it’s mostly our website selling to someone, we’ve built a pretty good relationship with this type of trade demo, which represents a pretty good chunk of our customer base.”

Also read: Three pandemic nesting trends expected to continue in 2022

A sustainable trend

Partnering with Crate & Barrel just months after their inception, Neighbor paid dividends two years ago and that continues as this D2C brand looks back on its good neighbor.

“For us as a brand that’s four or five months old, consumers seeing an Instagram ad that we run at Crate & Barrel gives a lot of credibility to a brand that otherwise wouldn’t necessarily be as familiar because it’s so early.” ‘ said Arambula.

Although the company doesn’t see an “anomalistic” ROI from social media ads run from January to April 2021, word is spreading about the outdoor furniture brand with the sustainable ethos and stunning teak chairs.

The original idea of ​​taking exceptional materials – high-quality solution-dyed acrylic fabrics, teak, powder-coated stainless steel – and offering them “at a more affordable price” remains the driving order for the platform that is being expanded.

Neighbor says, “Our goal as a company is to eventually use only recycled fabric, or at least a component made from recycled fabric, in everything we sell.” Neighbor works with a company called Polywood, “which uses recycled milk jugs to build plastic-based wood material, and then make a modern take on an Adirondack chair with it.

For Arumbula, it’s all about the new homeowner – with a very personalized personal idea of ​​what that home looks like.

Noting that millennials and “people who are buying houses in that age group are buying significantly smaller houses than their parents,” he said, “people are realizing they have to make the most of the space they have.”

Smaller home, smaller outdoor space, “but they will try to have as much usable space in their apartment as possible. The idea of ​​investing in your home, in a place where you can nest and feel good and create a retreat, is not lost.”

See also: Fauci: COVID infections in the US could increase



Above: Patient portals are now a must for healthcare providers – so much so that 61% of patients interested in using the tools say they would switch to a healthcare provider that offers one. For Accessing Healthcare: Easing Digital Frictions In The Patient Journey, a collaboration between PYMNTS and Experian Health, PYMNTS surveyed 2,333 consumers to learn how healthcare providers can alleviate digital pain points to improve patient care and satisfaction.


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