Two brothers behind the successful SkipTheDishes food delivery app are looking to build another success in an entirely new space: subscription home furniture.
Saskatoon-based Pivot Furniture allows customers to subscribe monthly to everything from couches to coffee tables to lamps and wine racks, and then return the items when they’re no longer wanted or needed.
The idea is based on a belief that, instead of spending thousands of dollars on furniture up front and moving it from place to place, many consumers would prefer to rent items for a monthly fee. The cost to furnish a one-bedroom apartment, including living, dining and bedroom, typically costs about $60 a month, plus the $9.99 monthly membership fee, according to Pivot co-founder Daniel Simair.
“It’s the more financially prudent way to go,” says 38-year-old Mr. Simair, who founded the company alongside his brother Joshua Simair, 32.
The brothers were among the group of co-founders behind Winnipeg-based SkipTheDishes Restaurant Services Inc., which sold to Britain-based Just Eat in a deal valued at $200-million. The other two main co-founders of Pivot, which is being bootstrapped so far, include former SkipTheDishes colleagues and entrepreneurs Rob Marsh, 31, and Brendon Sled, 30.
Pivot is the latest company aiming to disrupt the traditional furniture industry by removing the showroom, while also capitalizing on the subscription trend popularized by services such as Netflix and Spotify.
While subscription services are gaining traction, especially among younger generations, furniture is one of the most challenging categories in online retail, says Andrew Cherwenka, president of Vancouver-based Touchpoints Retail Consulting and former vice-president of customer experience and strategy at Walmart Canada.
“Customers need comfort, advice and the ability to envision the items in their home,” Mr. Cherwenka says.
It’s likely why the category hasn’t taken off, including in the United States, where there are a few similar furniture-subscription services such as Feather and Fernish, offered in select cities.
“The subscription model works for entertainment, cars, jewellery and clothes, why wouldn’t it work for home furnishings? I don’t think it’s reluctance on the part of the consumer. It’s because furniture is a super tough online category,” Mr. Cherwenka says.
Pivot launched in September and operates in Saskatoon and Winnipeg, which Mr. Simair says is not only close to home, but also offers strategic advantages.
“We chose those because those are probably the two cities that need the service the least and so, if it makes sense here, it will make sense in the larger centres,” he says. “It forces us to really focus on our products and make sure they’re well thought out.”
The $9.99 monthly membership includes delivery and returns as well as the assembly and taking apart of items. The fee is on top of items subscribed to per month. For instance, users can subscribe to a sofa for about $15.99 a month and a coffee table for $4.99 a month (prices vary depending on the item).
Consumers can also decide to buy the item by subtracting subscription payments paid toward its retail price.
“There are no terms and no commitments,” Mr. Simair says. “We try to avoid that whole hassle-filled environment.”
Pivot is different from lease-to-own companies, which Mr. Simair argues have “exorbitant pricing” and “haven’t figured out how to get the value out of the furnishings.” He says Pivot is focused on offering higher-quality furnishing at the lowest price possible.
Mr. Simair also says Pivot’s business model is also more environmentally friendly since it takes back the furniture when the subscriber is done and then repairs or recycles it.
“People throw away furnishings when the exterior looks bad or wears down,” he says. “We recover the materials that still have decades of life in them.”
He says the typical customer so far is between the ages of 35 and 45 and has purchased furniture in the past, but has been disappointed with the wear and tear and having to dispose of the items so soon.
Pivot makes its own pieces in Saskatoon and sells items from several manufacturers that it considers to be sustainable.
“We look for pieces that have recoverable value and longevity in higher grade materials,” Mr. Simair says. “The long-term goal is to provide the most sustainable furnishings.”
While Pivot doesn’t appear to have much direct competition in Canada, Mr. Simair says the company welcomes rivals to help bring attention to the furniture subscription model and, in turn, attract more customers. He says it’s similar to how SkipTheDishes spawned more competition in the food delivery space, and more customers overall.
Pivot has plans to expand across Canada “soon,” Mr. Simair says. It partly comes down to where they can find depots to assemble and prepare items for delivery to customers.
“We’re trying to do it correctly and make a proper, well-run business that has springs to it.”
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