On a dark and gloomy night last January, 27-year-old photographer Mariel Nelms took the leap. After being targeted for weeks by clever Instagram ads that had been carefully curated to her tastes—a comfortable mixture of mid-century and California modern with bohemian accents—she finally gave in to the delicate pressure of furniture retailer Article’s social media persuasion. With one deliberate, resounding click, she plowed $1,500 into purchasing a Soma sofabed—stately, plush, dawn grey. A sofabed that she’d never touched, sat on or even seen with her own eyes.
It was a gamble. “It was kind of scary going into purchasing such a large piece of furniture and a higher-ticket item without ever sitting on it before,” recalls Nelms, who lives with her husband, dog and soon-to-be baby in a two-bedroom apartment in southeast Vancouver. But because she’d done her research, reading reviews and blogs as well as talking with friends who had also purchased from the online furniture upstart, Nelms felt the product would be as good as she’d been hearing on the street. She was right. The sofa’s sleek appearance complements their home, while its memory-foam mattress draws compliments from overnight guests.
The willingness of customers like Nelms to take the plunge is the basis of Article’s wildly successful business. Launched in 2011 on a direct-to-consumer sales model serving primarily the U.S. and Canadian markets, the Vancouver-based company sought to eliminate as many steps as possible between manufacturers and customers looking for mid- to high-end furnishings. Shopping happens only on the screen: there are no showrooms to wander, no poufs to sit on, no proverbial tires to kick. And with no brick-and-mortar costs, there’s also no fat in the middle of the transaction.
The company, headed by self-proclaimed logic-nerds Aamir Baig, Fraser Hall, Sam Prochazka and Andy Prochazka (engineers, all four), has seen sales skyrocket by a gobsmacking 56,581% over the past five years, to more than $100 million in 2017, placing the company very comfortably atop the 2018 Growth 500 ranking of Canada’s Fastest-Growing Companies. In an industry where customers typically insist on palpating couch cushions and perching on counter stools before they pony up, Article has proven that people will pay good money for a higher level of service, convenience and quality—even if they can’t test their purchase in real life.
The journey started years ago. Baig, a slim, kind-eyed father of three, had gotten to know Sam and Andy Prochazka while completing his computer engineering undergrad at the University of Alberta. Following graduation, he followed an entrepreneurial yen to develop Etilize, which created back-end software for marketplaces and e-commerce platforms. After selling and exiting that venture, Baig climbed on a plane and went travelling, ultimately completing an M.B.A. in Singapore before choosing Vancouver as home. That’s where he met Fraser Hall, who was at a fledging tech startup called Recon Instruments. Recognizing in Hall a kindred spirit, Baig invested: money in Recon, and time in his new friend.
It was over one of their many coffees at Blenz in Yaletown that Baig suggested Hall join with him, Sam and Andy to launch a new company—one where their logic and insight could substantially streamline the entire procurement process, from logistics and sales to warehousing and delivery. Everyone was in. All they needed was something to sell.
Building an igloo by hand deep in the Arctic Circle might not seem the most fruitful brainstorming activity, but cold has a way of clarifying the mind. The quartet of would-be entrepreneurs—each of them outdoorsey and an engineer by training—had decided to go on a trip to Tuktoyaktuk to refine their rough business idea, and build a frigid structure while they were there. The igloo earned the admiration of the town’s mayor, and ably handled all their engineering stress tests. (“I could even stand on the top of it and jump,” Hall boasts.) Amid the scraping and stacking, the foursome talked through different scenarios of what their nascent business might be. When someone suggested “furniture,” it made perfect sense. With its commissioned salespeople, expensive showrooms and molasses-slow delivery times, the traditional furniture sales process offered the most scope for improvement.
Since Hall and the Prochazkas were engaged in other enterprises and Baig was in between ventures—and since he had been the one driving the idea—it made sense to have Baig captain the ship as both CEO and managing director, with the others serving as co-founders and stepping in as needed.
From there, the business model came together easily. In fact, the plan the foursome drafted seven-odd years ago closely mirrors the way the company operates today. Article is just much, much bigger now.
At first glance, Article’s formula for selling furniture is reasonably familiar; after all, retailers like Ikea, Wayfair and Amazon have been offering furniture online for years. But Article is different. Instead of the “more is more” array of merchandise proferred by industry giants, Article sells a tailored array of high-quality offerings that are painstakingly curated for its customer base. The products the company sells favour mid-century modern or Scandanavian design aesthetics, and everything works together. “It’s driven by our internal design team, which either designs products from scratch right here in our office or sources designs from third parties,” says Hall. “And then usually there’s some level of modification that we do for style or even for quality.” Materials are sourced from Canada, the U.S., Italy and South America; final assembly typically takes place in Southeast Asia.
Article’s digital-only approach cuts out expensive showroom rent and sales commissions. In fact, the company has no brick-and-mortar presence at all, other than its Vancouver headquarters and a few port warehouses in the U.S. (in Seattle, L.A., New Jersey and Jacksonville, currently). Because of this, Article is able to offer considerable savings to consumers—around 40 to 60%, according to Jay Rhind, e-commerce expert and partner in VFF, a Vancouver-based early-stage venture capital fund—not coincidentally, run by Hall—that invested in Article during its startup days.
“It’s totally vertically integrated,” says Rhind, “which means they control both the quality of the product and how they are able to pass along cost-savings to consumers.” This all positions Article to keep pace with consumers’ unabating preference for online shopping while also allowing the business to scale incredibly quickly.
In the Age of Instagram, crappy pictures do a brand no favours—especially one trying to sell big-ticket items on visuals alone. To that end, Article’s new 115,000-sq.-foot ops centre, housed in a 1929-built factory in Vancouver’s venerable Strathcona district, doubles as a photo studio, with a team of pros taking high-quality photos of each piece of furniture in a range of real-life lighting conditions, often with staffers (Particles, they call themselves) as ad hoc models. Complete with comfortable sitting areas, live plants, exposed timbers and friendly dogs, the building is command central for Article’s marketing, creative, engineering, admin and logistics teams, numbering about 130 people, all of whom are accustomed to working alongside the constant click of camera shutters.
Article uses its magazine-grade photos on its site. But it also feeds them into its social media—an essential component of the company’s growth. Article solicits stories from customers—who tend to be young, professional, and urban—using social media, features user-generated content on its channels and prompts customers to post a review of their purchases on the website. All this sharing functions as a sort of virtual showroom, enabling curious prospects to experience how other purchasers have enjoyed Article’s furniture, customer service and delivery process. With a few comments and clicks, Article has turned its customers into its most effective marketers. This crowdsourced ethos, paired with aggressive use of retargeted ads creates the kind of #inspo today’s consumers crave. (Visit the Article website, and you’ll get loads of tasteful ads in your Facebook and Instagram feeds for days.)
“Social media suits companies like us that are in the business of inspiring people to furnish their homes in a beautiful way,” says Baig, his sky-blue shirt and warm smile belying a whip-smart brain that never stops looking for the answers to questions that haven’t even yet been imagined, let alone articulated. “You’ve got millions of people on these networks, so you can scale the reach of your marketing efforts really fast and really wide compared to maybe 20, 30, 40 years ago when you would need to open shops all over the place or mail out physical catalogues. Situationally, we are fortunate to be in the right time.”
Rick Kohn, partner at Deloitte and retail practice leader for British Columbia, notes that peer-to-peer sharing helps consumers understand the way others have experienced a given product or offering. “It’s a pretty powerful way for consumers to share with each other,” he says, “and for brands to be able to have other consumers validate their offerings,” he says.
Plus, all that liking and loving also furnishes Article with data-rich feedback loops about who is purchasing what and where, and which designs resonate best. The company’s social spreading mechanisms are backed by proprietary software that allows it to track clicks, the number of times people add an item to their cart, and the number of times they actually purchase the item. As time goes on, the company’s data sets grow more robust, allowing it to get an ever-tighter fix on what its customers want. Those kinds of metrics are gold dust for any company in the digital age—especially one run by a bunch of engineers.
Article’s four co-founders have a standing weekly meeting, the purpose of which reflects their obsessive focus on details. Baig, Hall and Andy Prochazka congregate at Vancouver HQ; Sam Prochazka calls in from Edmonton, where he is based. A big part of the meeting is dedicated to a deep-dive into customer reviews and feedback. “We read through every review,” says Hall, who in his previous life sailed a three-masted barkentine for a high school marine program and battled poachers with the Sea Shepherd Conservation Society. “We try to extract any information we can to make that experience better. We take those very seriously; these aren’t just dropped into some black box.”
That might seem an extremely granular level of analysis for the leaders of a nine-figure business to engage in, but all four founders believe that the success of the venture hinges on providing a remarkable end-to-end customer experience. In online retail—especially of big-ticket items—a single bad review can have more impact on a potential buyer than a dozen glowing ones. So if an Article product arrives damaged or a delivery person is rude, well, its leaders want to know so they can make things right. Virtually every decision is made in the service of bolstering customer trust. “We work so hard to make that happen,” says Hall. “This is why we pore over the quality side of things.”
Speed helps, too. Most furniture retailers offer delivery within 12 to 16 weeks—enough to make even the most patient consumer antsy. But Article is not like most furniture retailers. In 2017, the company says it delivered 80% of orders in under two weeks and 30% within one week. Hall says the target is much quicker than that, with next-day and same-day delivery in major markets. (For her part, Mariel Nelms was “blown away” when she received an email stating that her Soma sofabed had shipped a mere day after she’d placed her order.) It’s all made possible by the strategic location of Article’s warehouses—more of which are in the works—and by a hyper-efficient, data-driven logistics chain. “Getting furniture in the hands of customers faster, while providing a consistent brand experience, is key to future success and where we continue to invest our efforts,” Baig says.
In fact, the founding logic nerds are so intent on boosting that final-mile experience that the four of them will be hand-delivering furniture out of their New Jersey warehouse for a few days later this fall. “The four of us will be in the delivery truck doing deliveries,” Baig says, flashing a toothy grin. “We have a delivery team there that will give us a bit of bootcamp training. Then we’ll try to make sure we don’t break our backs hauling some sofas up some tight staircases in Manhattan.” The primary benefit of this effort is to meet customers in person, with the secondary upshot being greater insight into what else can be improved along the delivery chain.
The company’s five guiding principles—be direct, be better, be good, be genuine and be adventurous—further reinforce its commitment to building trust. “I think that with the existing furniture brands and companies that were out there, there was a bit of a lack of transparency, a lack of trust and lack of genuineness,” Baig explains. “And so we decided to just emphasize that even more strongly.” (That open-book ideology extends to Article’s marketing voice, which skews friendly and casual. Take the description of its Bridle braided rug: “Our wool rugs are sourced from real, happy sheep. These sheep live the good life: rolling hills, sweet grass, and long naps. As such, our rugs occasionally have a little bit of that nap-grass stuck in their fibres. If you find a piece of grass, make a wish!”)
As to the pillow-squish factor—that is, the role of in-person testing, at a physical store, as a conduit toward confident purchasing—Article won’t say it’ll never happen. In fact, it’s already testing the waters. For some time now, curious people—between 15 to 20 per week—have been making a pilgrimage to Article’s Vancouver headquarters, expecting a full showroom and finding instead a working office. As a result, Baig confides that the company is shaping its generous entrance foyer into a coffee-lounge-like setup where people can leaf through catalogues and ask questions while sitting on (and touching, and squeezing) Article furniture.
“Technology hasn’t yet solved the problem of ‘how does it feel when I sit on it?’” admits Baig. “But that is only one of the questions people ask. Physical user experience, as we call it, may potentially be a part of our future design. But potentially not, depending on how it would help craft that ideal end-to-end customer experience.”
The future is constantly on Baig’s mind. Being founder-funded and profitable since 2015, Article has, to date, been able to grow sustainably and independently. “We’re able to use profits and retained earnings to finance capital needs,” says Baig.
That’s the way he likes it. With Article being his second company—in fact, all four founders bear the scars of learning through previous startup ventures—Baig prefers to have the ability to use his own instincts instead of leaning on funders’ recommendations. Outside money might push for Article to adopt new technologies (like AI) or to fall back on tried-and-true methods (like opening bricks-and-mortar locations)—things Baig and his co-founders aren’t yet convinced will improve the customer experience.
It’s not for lack of opportunity. Last year, the co-founders raised $100 million in potential venture capital funding, the idea being to create a war chest of sorts to take on new projects. “We had offers from multiple groups,” says Hall. After months of travelling the world and getting buy-in from renowned funders that most startups can only dream about, the leaders sat down with a number of term sheets. The connections and sexy flash of the partnerships made the offers very alluring. But after looking at each of the sheets and assessing the pros and cons, they ultimately decided to leave it all on the table. “We’re not good at spending carelessly,” Hall shrugs. “It’s just not our game; we have always been methodical. The truth is we wouldn’t have spent a penny.” Besides, he adds, no outside money means no outside deadlines: “The more successful Article has been, the more we’ve been able to think about the long term, which is definitely a pleasant place to be.”
As a habit, the management team takes that long view, examining possibilities over a 10-year window and beyond, and creating plans within a 12-month window. They constantly ask themselves what’s next—Article 2, they call it. There’s a lot of talk about what’s currently possible, or will be soon. “The perfect customer experience would be that the idea for what you need in your home appears in your brain and somehow, that arrives at your home in minutes,” Hall says. “You sit on it, check its dimensions, and if a colour is incorrect, it is instantly replaced.” Not all this ideating is practical or executable now, but it allows them to envision a perfect state. As Hall elaborates, “We work back from that.”
Thinking big can’t hurt, as there’s still plenty of market share to be won. While in some sectors—such as apparel and shoes—30 to 40% of all purchases are made online, only seven percent of furniture purchases are made via e-commerce. “It’s definitely lagging, and it is such a huge vertical,” says VFF’s Rhind, who pegs the potential size of the market at $100 billion to $200 billion.
When asked about Article’s special sauce, Hall just laughs: “The winner in the space is going to be the one who does so well by their customer.” Digital advertising may grab people’s attention, but it’s the customer experience that keeps it, so that’s where Article will continue to channel its energy. After all, Hall reasons, if you build a buying experience that exceeds expectations on all fronts—from design to quality to delivery to value—it makes for a delighted customer, and “won’t that person tell their friends?”
As the throngs of evangelical Article fans continues to grow, they sure will.