by The plans illustrate how the dot-com brick-and-mortar boom continues in home furnishings
VANCOUVER Back in February, we broke down Wayfair’s flywheel strategy that combines e-commerce, a smart loyalty program and a growing presence in brick-and-mortar retail approached as much as marketing as a distribution channel.
In employing this tech-driven flywheel, we described Wayfair as taking a page — really several pages — from Amazon.com’s platform playbook, which is not to say it is “stealing,” because Wayfair is doing its own take on the flywheel strategy. Besides, it’s one thing to have a playbook and quite another to execute.
That flywheel playbook now has another adherent: Vancouver, Canada-based e-commerce platform Article.com. A specialist in modern, including midcentury, Article.com will open its first furniture stores in the U.S. this year in San Francisco and in Bellevue, Washington. The company, which marked its 15th anniversary in March, opened its first retail location anywhere in August 2024 in Vancouver, British Columbia.
“We see physical retail as an extension of the business we built online,” said Aamir Baig, co-founder and CEO. “The West Coast has always been core to our business.”
Approximately 25% of Article.com e-commerce sales come from the West Coast of both the U.S. and Canada, with California and Washington consistently ranking among the top five states. Thus, the company says it has infrastructure to support expansion into retail in specifically the San Francisco and Bellevue markets, Baig said.
According to one estimate, approximately 80% of Article.com’s sales come from U.S. customers.
The Flywheel Effect
While the Vancouver store at 848 E Hastings St. has “surpassed expectations,” more specific to the flywheel strategy, the store grew the overall Vancouver market for Article.com, including e-commerce, by nearly 50%. This is the flywheel effect. In addition, in-store customers are placing orders 20% larger than those made online, which is exactly the benefit of retail trumpeted by Wayfair.
“Walking through a physical store gives every shopper a broad view of the breadth of our categories and the depth of our assortment, often inspiring purchases they did not know they could get through Wayfair,” Niraj Shah, Wayfair’s CEO, told the investment community when filing the company’s annual report in February. “We are seeing this work in real time.”
After Wayfair’s Wilmette store opened in greater Chicago, Shah reported that sales in Illinois grew at a compound annual rate of 10%-plus over the national average since the 150,000-square-foot store opened in May 2024. And more than half of the Wilmette store’s visitors are new to the brand.
So it was in March that Article.com announced plans for a store in downtown Toronto, a location expected to open late this year.
The U.S. stores will give the company four locations of between 7,500 and nearly 10,000 square feet by 2027, with a fifth store expected somewhere in the U.S. in early 2027.
The Toronto location will be in West House at 90 Bathurst St. in King West, one of the downtown area’s more walkable, design-forward neighborhoods. In the U.S., the locations expected to open in the fall are 2299 Alameda St., San Francisco, in the Design District, and 700 Bellevue Way NE, in Lincoln Square, Bellevue, in the Bellevue Collection, a high-end urban shopping center just outside downtown Seattle.
Tech-driven
Another trait Article.com shares with Wayfair, and that both share with Moto Motion, for that matter, is its grounding in and emphasis on tech. All four of the company’s founders got their BAs in computer engineering at the University of Alberta: Baig, Fraser Hall, and brothers Samuel and Andy Prochazka. Baig’s previous company, GfK Etilize, develops e-commerce software, giving Baig and Andy Prochazka the experience they determined they could use to start a company that breaks down barriers between consumers and manufacturers via an e-commerce platform.
“We chose furniture as the first item to apply that idea to because it was just going to be a whole lot easier to fill a container with sofas than espresso coffee machines,” Baig told Forbes. “We got obsessed with the world of furniture and saw lots of opportunities as to how we can make the customer value proposition and the customer experience remarkably better.”
So, the tech and software came first. Furniture just made sense for that technology as a product line. The company started up in 2011, launching e-commerce direct to consumers in 2013.
With a proprietary technology for managing manufacturing and distribution, Article.com has access to the chief currency of the digital realm: data. Access to granular information about its customers and what they like, which styles they prefer and whether fast delivery matters, to name just a few data-driven variables, enables rapid improvements in Article operations, Baig said.
The company also relies on its own fulfillment centers and in some cities, such as New York and San Francisco, it handles its own last-mile deliveries. Fulfillment centers are located in Calgary, Alberta; Jacksonville, Florida; Richmond, Virginia; and Patterson, California.
“Our online business model also gives us an opportunity to understand our customers at scale,” Baig told Business of Home in 2022. “We’re able to tap direct data sources to understand shopping preferences and customer feedback. Teams across the company use this data to inform decision making, including our product management team, which monitors and analyzes top-selling products to inform production schedules and which collections to expand.”
(Photo from Article.com)
Baig and Shah speak the same language.
Roller coaster
Article.com’s expansion into physical retail marks another milestone on a road marked by many turns. None of the turns proved bigger than COVID. Although the company was profitable from 2015 to 2021, Article.com’s trajectory was interrupted by the pandemic. When pandemic-related demand retracted, the company laid off more than 200 workers, or nearly one in five.
Baig said at the time that online sales had benefited from COVID-era demand, but that Article.com subsequently misjudged how long that trend would last.
“We were operating the business at a size larger than . . . demand would sustain,” Baig said in a statement. “We were living beyond our means.”
This is a narrative with which a great many furniture retailers can relate, most especially perhaps American Signature/Value City; Big Lots; Franchise Group; Conn’s; Badcock; Bed Bath & Beyond; and Bargain Hunt, to name but a few.
The adjustments seemed to have worked, with Article.com returning to profitability in 2024, according to the company.
“Now that we have stabilized ourselves out of the post-COVID demand shock and are looking to continue to drive growth, physical retail is a very promising channel for us,” Baig told Canadian newspaper The Globe and Mail in March.
(Photo from Article.com)
