Early this year, executives at TOV Furniture saw the coronavirus impacting its manufacturers in Asia and began thinking about the potential business impact if the virus reached the U.S. CEO Bruce Krinsky imagined a U.S. outbreak would put a serious dent in sales and require cost-cutting.
And Krinsky’s fears came true in the second half of March: sales dipped 30-40% year-over-year after healthy increases to start the year. Then, in early April, people suddenly started ordering home furniture. Sales peaked for TOV and sister brand Renegade Furniture in mid-April and stayed there – they’re up more than 200% compared to last year.
“For us, it was a complete surprise,” Krinsky said. “We were not by any means expecting that, during a pandemic, people would be spending substantial amounts of money on furniture.”
TOV is part of a select group of companies that have seen sales rise with people stuck at home. Some of those companies fit into product categories where rising demand makes sense, like food, alcohol and books. But certain retail sectors like furniture started to see a spike after people settled in at home.
“Once they got their kids settled, school and work settled, then they looked around the house, what could they use, what do they need?” Krinsky said. “And that’s when they started buying the furniture.”
The direct-to-consumer (D2C) channels at TOV and Renegade have driven most of this success. But wholesale sales are up as well, thanks to ecommerce-focused retail clients. The business’ leading sales category is seating, which includes couches, lounge chairs and stools. Not surprisingly, home office furniture has also been a big seller as more people work from home.
These companies are the exception, of course, with many more facing challenges of slowing sales, furloughs or even complete shutdown. Nevertheless, companies that have managed to weather the storm due to luck, foresight and innovation offer hope and insights for others.
Demand Spikes for Products People Use at Home
In one week in mid-late March, Sea To Table’s ecommerce orders spiked a staggering 750%. And the pace continued.
D2C orders at Sea To Table, which sources and sells wild, sustainable seafood from across the U.S., were up more than 1,000% at one point, and by mid-May were down only slightly. Other KPIs like conversion rate and site traffic jumped as well.
Restaurants and university dining halls typically make up a sizable portion of the company’s total business, but even as campuses and dining rooms closed, D2C orders shot up. Home cooks looking to try new recipes or prepare restaurant-quality meals at home were on driver of that demand. And CEO and co-founder Sean Dimin noted many people sent seafood to elderly family members or others as gifts.
“It’s a way to reach out to people and show you care and for us to be part of that, we’re really, really grateful and appreciative and we don’t want to take that for granted,” he said.
As parents started looking for ways to keep their kids entertained at home, they discovered Springfree Trampoline, where global sales have increased 300% year-over-year for the Australian manufacturer and retailer of trampolines. Springfree’s trampolines use composite rods located under the mat instead of steel coil springs, so they’re safer and more durable than traditional trampolines.
Current order volume is comparable to what the business sees in November and December, the busiest shopping months of the year. It has seen sales rise across both direct-to-consumer and third-party retail channels, according to Danielle West, head of sales and marketing at Springfree Trampoline Australia. Business is stronger in some markets where summer is near, though demand is still higher than usual in Australia, where it’s almost winter.
Daily Routines Remain
As much as people’s lives have been upended over the last few months, certain daily routines remain. Like brushing your teeth.
hello products uses natural ingredients like charcoal, hemp seed oil and coconut oil to create products that not only improve oral hygiene but that are actually fun and engaging. Founder Craig Dubitsky said hello has continued to do well over the past few months.
“Oral health and whole body health being inextricably linked means folks are definitely paying that much more attention to oral care,” Dubitsky said. “… We’re fortunate that we make a range of products that are necessities.”
However, Dubitsky doesn’t draw a direct line between the coronavirus and . Other contributors to its success include recently launched television ads driving brand awareness, new products and increasing demand for natural health products.
Hiring Needs, Shipping Become Good Problems to Have
Despite the rising order volume, TOV has not been able to hire any additional employees due to the coronavirus.
“We can’t really train people right now, we’re not set up to train in a COVID-19 world,” Krinsky said. “Our training is usually done in the office, in-person so that’s a challenge that we haven’t been able to tackle or address yet.”
Employees at the company’s warehouses in Southern California and North Carolina are putting in a lot of overtime but have kept up with the surge in orders. That’s true even as workers take precautions to prevent the spread of the virus, including washing their hands every 30 minutes and no longer sharing equipment (e.g., forklifts).
The furniture business has run into capacity issues with parcel carriers, which sometimes don’t have enough room for all the boxes that have piled up.
For Sea To Table, the company’s existing network of US fisherman have met the increasing demand, but the packaging and shipping process is much different for consumer vs. wholesale orders with consumers requiring extra labor when purchasing entire fish or large filets.
“The same Alaskan Coho [Salmon], Alaskan Sockeye Salmon or halibut that we sell to restaurants and chefs across the country is what’s being packed up for our consumers. It’s just portioned and vacuum sealed and wrapped up in butcher paper,” Dimin said, adding that for wholesale orders, fishermen ship entire fish or large filets directly to restaurants or universities.
Ecommerce orders, on the other hand, are sent to a third-party logistics provider (3PL). That presented a major challenge for Sea To Table – the 3PL was not prepared for the flood of orders, especially as the partner dealt with rising order volume from other ecommerce clients and had to take new safety precautions in the warehouse.
“As much as you want to run and scramble and … just do everything you can, to do it the right way took a number of weeks to really get the extra line time, get the extra labor in place, have the procedures in place that not only assure that the packages are packed and shipped right, but making sure the teams who are doing the work are in a safe working environment,” Dimin said.
Sea To Table usually delivers ecommerce orders in less than a week, and at one point it told customers deliveries would take two to three weeks. Delivery times are now down to one to two weeks and should return to normal soon.
Additionally, Sea To Table employees from across the business put aside their usual responsibilities to help with ecommerce. It needed help with customer service, in particular – more customers mean more questions and potential issues.
hello has not run into any issues getting products to its retail partners as demand continues to increase. The brand temporarily closed its own ecommerce store because it fulfilled those orders from its New York City-area office and did not want to risk employees’ health.
Even though Springfree dealt with some delays on production orders from China, it has largely been able to maintain sufficient inventory. It helps that the company owns its factories and warehouses.
“I think the fact that we did have inventory in our warehouses in Australia and obviously production happened, we haven't been impacted too severely like other brands,” West said. “And I think that's just a benefit to having your own factory and supply chain from start to finish. You have a bit more control.”
West credited the business’ installation technicians and other frontline staff for stepping up to handle the order surge. These technicians now take extra precautions to ensure safe installation.
“Operationally we’ve been laser-focused on providing exceptional customer service,” West said. “So, at times that has meant making sure we have enough staff to cover the volume of calls we are receiving, deliveries and of course contactless support. At our factories, we are also making the necessary changes to our processes and human resources to meet demand.”
Pondering Permanent Changes
While the spike in demand will probably not last, TOV’s Krinsky thinks online shopping will remain popular.
“We believe that the trend of buying online and even buying big-ticket items online like furniture has been accelerated by the pandemic,” Krinsky said, noting the company’s average D2C order value is $1,100. “Meaning we’re not going to be 100% up year-over-year after the pandemic, but we might be [up] 20% or 30% or 40% when this stabilizes.”
Sea To Table plans to once again serve restaurants and universities once they reopen. But it will also invest more in ecommerce as it expects D2C order volume to remain higher in the future. One such investment: a new West Coast warehouse partner that will soon start shipping orders.
Sea To Table began selling online in 2017 because it was another way to further its mission of introducing more Americans to high-quality seafood. The business never could have imagined much of the food service industry would shut down and D2C would become so critical. And Dimin thinks more changes await.
“If you can’t look really, really hard at what you’re doing, who you’re serving and how you’re serving them, at this point I can’t see how you could adapt and move forward,” he said. “I don’t know what the future’s going to bring, but I know it’s going to be pretty different than where we came from.”
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