Modern Retail Podcast: The Labubu craze, retail employment shifts and headwinds in the home goods sector
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On this week’s episode, Modern Retail’s senior reporters Gabriela Barkho and Melissa Daniels discuss two major topics shaking up the retail world. First, they dive into Labubu dolls, which suddenly seem to be everywhere. They explore how the viral phenomenon started and why it is driving big-ticket resale purchases. Then, they dive into recent news around the state of employment in the retail industry, as almost 11,500 retail jobs were cut in May, per Challenger, Gray & Christmas.
Then, this week’s featured segment brings together three expert furniture executives to discuss how a historic housing slump is affecting the sector. Daniels leads a discussion featuring Nicole Chaloux-Pinette, head of category management and business development at Perigold; Jiake Liu, co-founder of direct-to-consumer outdoor furniture brand Outer; and Lee Mayer, co-founder and CEO of Havenly Brands.
Mortgage rates are at 6.89%, and the National Association of Retailers says April saw month-over-month transaction losses in all U.S. regions. This is a major headwind for furniture companies that typically rely on new home sales to help drive business. While the panelists all run very different businesses, they shared similar strategies around how to serve existing customers, create acquisition opportunities, and invest in opportunities that will lead to growth.
Catering to existing homeowners and renovations
Chaloux-Pinette: “Throughout the last few years, a lot of people have been renovating. There has been a huge focus on kitchen and bath. Those are categories that we’ve really focused on expanding.
As an example, we’re moving into large appliances over the next few weeks. In conjunction with launching our first store, we’ll launch that category— trying to meet the customer where they are and get upstream in their home renovation journey, so they think of us when they decide to furnish their room after the renovation. So I think just focusing on what we can control has been something that’s served us well over the years.”
The power of a niche customer base
Liu: “We are serving such a focused customer base. In the U.S.,furniture is like $150 billion market. Then outdoor furniture is really just about $6 billion — maybe it’s gone to $7 billion now. So, it’s a very small portion. And the customers that we’re serving are typically the top 10%, in terms of household income. Some data suggests that we’re targeting the top 2%. So we basically had the realization that, one, it doesn’t matter how the macro changes, we’re not going to serve the mass market. Second, how can we serve our customers better?
We decided to basically focus on what we do best, which is our own products. We pay attention to what’s going on. We still do a lot of social media marketing, top-of-funnel, awareness, press and all of that. But we decided to just hunker down and focus on our own economics, making sure that customers are happy and we’re innovating on the products.”
On getting a boost from trade designers
Mayer: “Trade has been really resilient. Historically, it hasn’t been a huge part of our business, but we’ve been expanding it more and more across our brands. Some of our custom and high-end brands, in particular, have done quite well.
So we’re expanding commercial, we’re expanding trade — because it’s both a resilient customer and a sticky one. Once they like you and they have a good experience, they tend to keep coming back for different projects. And we really like that.
I said this back in April to my team, who were feeling a little spooked by some of the consumer demand trends we saw that month — we’ve grown pretty substantially through what’s been a historic slowdown in home. So I don’t think these consumer demand blips are the full picture.”