by It’s never unusual to see a retailer go from brick-and-mortar to click-and-order over the internet, but in the case of San Francisco-based retailer Classic Patio Furniture, it did things the other way around.
And Justin Singh, president of the company, said that’s made all the difference. It set into motion a continuing theme: When the marketplace changes, get out in front of it.
In 1999, the not-far-from-infancy internet was where Classic started out. It bought an existing business that sold imported teak furniture across the U.S.
“It gave us a bit of a first mover’s advantage and helped us slowly expand over the next 10 or so years,” Singh says. “For many years, the business was online only, however, as the landscape changed, we also had to adjust. At first, we opened our own retail locations and we were finding lukewarm success.”
Time for the next change, which was a move from organic growth to growth by acquisition. Classic consolidated a few established local retailers, like Tom’s Outdoor Furniture, which brought in a built-in clientele and a trusted local brand. It now has three retail locations and a warehouse, which has provided Classic with market penetration of most of the Bay area.
As with many patio retailers, the company has faced long lead times and increased shipping costs, which prompted it to expand warehouse space so that it could increase early buys and have more inventory for its showrooms.
“We still do a decent amount of special orders, and that will never stop I’m sure, but now we are much more transparent up front with what the possible lead times and delays could look like,” Singh says. “Clients appreciate this and we have received significantly fewer issues this year versus the first six months of the pandemic. We also try to subtlety push people towards buying furniture that is in stock over special orders whenever we can.”
Singh said that in terms of marketing, Classic has kept to the tried-and-true.
“Our marketing has remained relatively stable throughout the pandemic,” Singh explains. “We’ve ramped it up a bit but the channels have remained consistent. Facebook, Instagram and Pinterest are all great social media deceives to build an audience and get new products out to the masses.”
He said that Classic uses marketing channels based on location. San Francisco customers will see more social media marketing, where customers in smaller high-end suburban cities receive more advertising in local home and garden magazines.
To set itself apart, Classic focuses on three things, the best quality, for the best price, with the best service.
“I joke sometimes that our competitors may be able to compete with us on one or two of these categories, but never all three,” Singh says. “Service is truly our biggest differentiator, not just during the sales process, but after the sale as well. Good service is what people remember and it’s what keeps them coming back and telling their friends and family about us.”
Singh said that he knows that the increase in full-line retailers has had an effect on his business, which bears watching.
“To be honest we don’t love it, so my initial gut response would be to say it’s not a great thing,” Singh says. “Too much competition is not the issue, but it depends on the type of competition. We already see smaller mom-and-pop retailers struggling in our industry and I expect this to be exacerbated. This is part of the reason why we “smaller” retailers do need to stick together and work together to make sure we are raising the overall quality of all of our stores. A rising tide lifts all boats. The problem with the full-line retailers is sometimes it can feel like a speed boat in someone’s backyard pool.”
Another competitor has been online retailers.
“The online component these days is incredibly important,” Singh says. “We were lucky enough to start off as an online store so we had a bit of experience dealing with the logistics of delivering furniture nationwide.”
The main challenge has been to maintain the website so that it can handle the volume of product and issues that can arise from so many products and customization.
“It’s a very taxing process because every year all of our manufacturers change their prices (sometimes twice in one year) or maybe they change the collections that they are offering,” Singh says. “Perhaps they change the frame options or fabrics that they offer for their collections. All of this has to be reflected on our website and it’s honestly taken us years of hard work and trial and error to get our website to where it is today and there is still tremendous room for growth. “
The upside of that is that Classic’s online business has gone from five percent of the overall business to 15 percent over the last two years. The goal is to get it to 25 percent over the next two years.
On the brick- and-mortar side, Classic has expanded from two locations to three about six months ago. At the moment, the business is taking a pause because it is fully stocked on furniture and the business wants to wait-and-see which way the economy and supply chain goes.
“If everything continues going smoothly, we will open another location in one or two years,” Singh says. “I’ve always stressed that we should expand our business in a way that we never spread ourselves too thin, so that we never falter on our number one differentiator, which is quality of service.
“If we wanted to, we could have opened five, six or seven stores by now, but I can assure you that our quality of service would have gone down, which would have hurt our reputation and the goodwill we’ve built up with our clients over the years. It takes years to build up a reputation and only minutes to destroy it.”
