Outer’s new rug in gray is featured in this neighborhood showroom alongside its sofa.
SANTA MONICA, Calif. – A little over a year after its initial launch, D2C outdoor furniture resource Outer has a lot to celebrate, including what it considers to be a phenomenal year of sales and several new undertakings, despite the trials that have come with dealing with COVID-19.
“It was not what we expected out of the year, not what anyone expected, but we’ve been able to learn and thrive,” said Terry Lin, co-founder and chief design officer of the Los Angeles-based startup.
January and February of 2020 got the company off to a great start for the year. In both months, Outer beat its sales forecasts, but March’s mandatory lockdowns hit Outer with a huge shock much like the rest of the U.S.
“Week one happened, and I think we were all so confused, but we also thought we should hope for the best, and then things got really quiet,” said Lin. “Our run rate all of sudden slowed down, and we were asking, ‘do we need to reforecast?’”
But the dire situation flipped again within the next week as consumers got adjusted to their new stay at home living situations and began placing orders. By the third week of dealing with COVID-19 shutdowns and turmoil, Outer had tripled its production and beat its forecast. In the beginning of the year, the company had planned enough in-stock inventory to last until May, but it was out by the beginning of April with the new quarantine surge.
Outer, which produces most of its furniture in China in a plant owned by co-founder and CEO Jiake Liu’s family, got lucky on the restocking end, too. The factory did not run into major issues hiring extra weavers and other manufacturing employees in its area to push more production, and Outer was able to steeply increase output fairly easily, although lead times for customers still got up to six weeks, a problem Outer got caught up on in August.
“We were worried it was going to impact our conversion because people just weren’t able to get product, but it actually had very little impact, and that’s probably because everyone around us was also out of stock,” explained Lin.
But keeping up with demand was not the only problem Outer had to contend with during this time. While the D2C company’s online buying format was perfect for shutdown orders and social distancing, one of its most uniquely Outer offerings, its neighborhood showroom model, faced unique challenges.
Capitalizing on the rise of the sharing economy, the same model used by businesses like Uber, AirBnB and more, Outer’s neighborhood showrooms uses real customer’s products and outdoor spaces as a showroom instead of a traditional retail venue.
To make it work, Outer pays its existing customers to schedule a time for potential customers to come to their backyard and see Outer product. The hosts, who apply to have their outdoor spaces used as a neighborhood showroom, are compensated based on their time, regardless of whether or not a potential customer makes a purchase. And while visitors are in their backyards, hosts act as Outer’s salespeople, having an open conversation with each visitor about Outer’s products and answering questions as they can.
The program is incredibly effective, Lin said, because people love hearing from real customers, and it saves Outer a huge amount of time and money as it works to expand its presence into many different markets. Already, just a year in, the company has about 100 showrooms available across the country – something that would be nearly impossible to do in such a short amount of time with a traditional retail store.
“Let’s say it takes eight months and $100,000 to build a brick-and-mortar store,” said Lin last year about the neighborhood showroom model. “How many years would it then take us to get even a small presence all over the country? We wouldn’t be able to compete on the scale that we want to like that.”
But, the neighborhood showroom program has been on hold for the most part during COVID-19, a fact the company has been able to overcome thanks to its cooperative showroom hosts and a WiFi connection. The hosts have beautiful outdoor spaces, Lin explained, and many are happy to provide Outer with marketing materials and to host virtual showroom visits – just as many traditional brick-and-mortar showrooms opted to do during state lockdowns.
In some cases, potential customers have still been able to come by and see a neighborhood showroom. In Tennessee, one Outer host offered to stay inside during a potential customer’s entire visit to their backyard, and it went so well that the host and visitor (who ultimately made a purchase with Outer) reached out to Lin to say that the two have made plans to hang out once COVID-19 restrictions are lifted.
“Those are the kinds of experiences we care about, the community connections,” said Lin with a laugh. “And so we told them when you do finally get together, your get together is on Outer.”
In June, the company celebrated a huge win for its future: $4.3 million in funding raised in an investment led by Mucker Capital. The funding and expertise offered by its more than 40 investors, according to a release for the company, will be used to “release new innovative products and further expand Neighborhood Showrooms, which we anticipate will change the way in which consumers shop for furniture, especially in a post-COVID-19 world.”
And now that the company has caught up on orders and overcome many of the initial challenges posed by COVID-10, Lin said its excited to make good on that promise and capitalize on the momentum created by growing consumer interest in outdoor living created by quarantine by releasing Outer’s first new product since its opening: rugs.
Having started business last year with only a small selection of recyclable wicker and powder-coated metal frame lounge seating in the form of a sofa, loveseat and set of armless chairs, Lin said expansion was important to the brand for many reasons right now.
“On the business side, we have to prove to ourselves and our investors that we aren’t just a one-trick pony. Going from zero to one is hard, but then going from a one to a multi-product company is really hard.”
On the customer side, Lin said it was something people had been asking them to do, but that the company had taken its time on for several reasons.
According to Lin, Outer has many product expansions in the pipeline, but it is consciously working to only release a product that they can improve the design of or use of for its customers.
And the company found all that and more in its latest introduction, rolled out on Outer’s site in mid-September of this year. The new collection of sustainable outdoor rugs – available in gray, sand and multi – are made from 100% recycled plastic and offer the cleanability and innovation that Lin said Outer had been looking for.
“One of the biggest things we’ve always done in terms of what our north star is think about the four components of what we’d like to do when we’re developing new product. “For the Outer sofa it was protection, durability, sustainability and comfort, and when we think about new products, that’s the filter we put it through.”
Lin also added that it was important to introduce a product that worked in the outdoor lounge arena, the “room” it launched with in 2019.
“You’ve really got two categories in outdoor: dining and lounge. Going into another category before we’ve figured out or finished the first didn’t make sense,” he explained. “Dining can wait. We started with the core pieces of the outdoor lounge, and now what we want to do is build around it.”
So, Outer chose to pursue rugs first over another lounge accent item like a coffee or side table because it fit into the company’s other “north start;” it gave them a chance to innovate with a sustainable focus, ultimately creating a recycled product with a lifecycle longer than many other outdoor rugs.
Made from recycled PET plastic, the rugs include numbers on its packaging (441, 882 and 1188) that reflect the total number of plastic bottles used to make each rug. The numbers correspond with the rug’s size, so approximately 441 bottles make up the 5×8 foot size, 882 for the 8×10 foot size and 1188 for the 9×12 foot size.
Each rug was designed with a neutral look and subtle herringbone pattern to ensure it can fit a variety of design styles – keeping it useful to consumers and out of the landfill longer. In addition, knowing outdoor rugs get dirty, the rug is woven to keep dirt and debri from collecting as frequently as it would in a pile rug, and the speckled herringbone pattern was chosen partly to conceal dirt and stains among its dithered effect.
“This is really just the start of new products for us, but it was absolutely the right thing to start with,” said Lin. “We always want to introduce product that gives our customers something new, something that is designed better, and that’s what our rugs offer. … It’s been great to bring something new to consumers after a year like this.”