Last year Americans bought some $180 billion worth of furniture, according to the Bureau of Economic Analysis. The bulk of that was spent with traditional brick-and-mortar retailers, though online e-commerce is taking a growing share of sales, somewhere around 15%.
While retailers hope all those products find a happy home, returns are inevitable, especially with items purchased sight unseen. Appriss Retail calculates that about 4% of hard-goods purchases were returned, well under the 17% retail return rate overall. But still, it amounts to a ~$7 billion headache for retailers to make good with those dissatisfied customers.
Into the breach comes FloorFound, a turnkey solution for retailers to recover and resell those oversized returned, lightly-used and open-box items, many of which would be written off as a loss and end up in landfills.
FloorFound handles it all, picking up the returned item and warehousing it in one of its 42 hubs nationwide, then it provides an exclusive platform to sell the item along with FloorFound delivering it to the next customer.
“Our mission is to power a circular future for all retail,” explained Chris Richter, co-founder and CEO of FloorFound. “To do this, we’ve solved the many challenges that have made it prohibitively difficult for retailers to manage the return and resale of oversized items. FloorFound cuts through complexity to allow retailers to quickly and easily build their business with resale, wooing customers with an irresistible mix of sustainability, value, and quick shipping.”
Having only launched its platform a little over a year ago, FloorFound’s value proposition was immediately recognized by some of the biggest names in furniture, including Joybird (a La-Z-Boy brand), Interior Define, Neighbor, Modsy, Burrow, Mitchell Gold + Bob William, Outer and many others.
“FloorFound sits at the perfect intersection of the two most transformative trends in retail: sustainability and supply chain resilience. Chris and his team have spent the past 25 years in ecommerce and retail operations, specifically supply chain, and they have the unique knowledge necessary to create the right business model and value to take oversized recommerce mainstream,” says Tom Ball, founder and managing partner of Next Coast Ventures.
And Fast Company just recognized FloorFound in its 2022 World Changing Awards in the software category.
With tailwinds at its back, FloorFound has just secured $10.5 million in Series A funding, led by Next Coast Venture and LiveOak Venture Partners. The funds will be used to expand across other big-ticket verticals, including appliances, mattresses and exercise equipment.
However, handling returns for these retailers is only the beginning. FloorFound intends to help them go full-speed ahead into the circular resale market, enabling them to establish trade buyback programs and sell refurbished and repaired used items too.
More resale, more customers
“We started with helping retailers with furniture returns because that was an obvious problem for retailers and opportunity for us,” Richter shared. “But the market for used furniture is much larger and today is largely concentrated in marketplaces like Facebook and Craiglist or services like Kaiyo or Chairish.
“We offer retailers a way to lean into the entire circular economy and recommerce. Ikea’s now doing it with its Buy Back & Resell program. We want to give other brands the tools to do it too,” he continued.
FloorFound offers a technology frontend for retailers to sell through – FloorFound.store – and its software also links to the retailer’s own branded website to provide two avenues for retailers to reach customers.
For example, Joybird’s website has a “New To You” page with listings uploaded and maintained by FloorFound, which also handles the pricing through carefully calibrated algorithms.
“It’s very low effort for the companies and then all of a sudden, they’re in the resale business acquiring new customers,” Richter said.
That may be the biggest attraction for furniture retailers to get onboard with FloorFound, a market estimated to reach $16.6 billion by 2025.
Consumers are keen to buy used or resale items with a recent survey conducted by the company finding that three in four Americans plan to buy previously-loved items over the next year. While clothing is the top resale item purchased, furniture is number two with 28% reporting such a purchase last year and 31% planning one in the future.
Discounted price is the main driver for the resale customer, named by 82% of those surveyed. And sustainability is a close second, according to 51% of consumers.
As for furniture resale, over two-thirds of the consumers surveyed expressed an interest in services that provide high-quality used furniture in good condition at a discount and nearly 90% say they would have a more favorable opinion of a brand that offers such resale items.
“Today’s consumer is very values-driven,” Richter explained. “We offer a win/win solution for retailers to lean into these values-minded shoppers looking to get more value in their purchases and do it sustainably.”
Early signs are that FloorFound’s recommerce platform is driving new customer acquisition for its partners. Case studies have found that about 75% of the customers that buy through the retailers’ branded-recommerce stores are completely new to the brand and that about 25% of those new customers come back to make another purchase within 30 days.
“FloorFound is an amazing way that retailers can connect with a new audience and build lifetime relationships with customers. We feel every retailer should be in this business too,” Richter related.
Solving for logistics
From a supply-chain perspective, FloorFound can support retailers all across the country through its fleet of warehouses and partnerships with XPO Logistics and others that operate their last-mile delivery hubs.
“No one in this space has a reverse network at our size or scale. Our massive network is a huge differentiator for us and enables us to operate nationwide,” he continued.
“Consumer demand for sustainability, coupled with a strained supply chain and growing inflation, has pushed recommerce and resale to the forefront of retail, ” Richter concluded.
And Tom Ball, founder and managing partner of Next Coast Ventures and who now joins FloorFound’s board of directors, added:
“FloorFound sits at the perfect intersection of the two most transformative trends in retail: sustainability and supply chain resilience. Chris and his team have spent the past 25 years in ecommerce and retail operations, specifically supply chain, and they have the unique knowledge necessary to create the right business model and value to take oversized recommerce mainstream.”