Set to IPO, here’s how Article navigated the biggest months in its history
Plus, after a million orders, here's what comes next for the e-commerce juggernaut.
“We had sort of two-to-three weeks where we saw like a 20% dip year-over-year — so, sort of scary times.” That was Duncan Blair, Article senior vice president of marketing, speaking to Vancouver Tech Journal in July of this year. He was helping me understand how Article, once Canada’s fastest-growing company, managed its biggest year ever. Yes, it started with uncertainty, but the outcome was emphatic: The company, which launched in 2013, hit its one-millionth order delivered this year — and an astounding 400,000 of those orders were executed in 2020 alone.
Now, the word is finally out about the company’s potential 2022 IPO (Vancouver Tech Journal confirmed with a source that it is, indeed, in the works. Earlier today, the Globe and Mail also published a report on Article’s IPO). So, based on our previous conversation with Blair, we’re taking a look at how the company navigated an exceptional year, its biggest months ever, and what comes next.
Home field advantage
As the world locked down and individuals, stuck at home, decided they should upgrade their surroundings, an e-commerce juggernaut like Article was obviously affected. “We were the beneficiaries of this massive swing to e-commerce in general,” Blair explains. “We also convinced a bunch of people who were previously sort of apprehensive about buying big-ticket items like furniture online. We've also, in doing so, built confidence generally in the Article brand, so more people are willing to sort of take that perceived risk of buying a sofa or table or whatever it is online.”
People think about Article’s strengths and their mind immediately goes to digital. However, Duncan believes a less obvious advantage is its vertical integration, and in particular, its delivery team. The company identified deliveries as a key point of anxiousness for customers, so they invested in full-time employees that help guarantee the delivery experience is a positive one — and are doing for more than half of all Article orders right now. The company has also moved most of its product design in-house. The benefit here? “We get designs to market faster,” Blair says. “We believe we have an advantage in that we're closer to our customers. so we have a bit of sense of what they want and how and be able to react to that.”
Is Article a furniture company or a tech company? Yes
Unless you work at Article, it’s not obvious how many people actually work in technical roles at the organization. People who look at the company think it sells furniture using an e-commerce platform like Shopify Plus. But that’s not the case. The company has upwards of 75 software engineers and a tech organization of more than 100 strong, Blair shares. They’re working on routing software, supply chain software, freight and logistics, manufacturing queues and more. “All of that stuff is largely, not all of it, but largely that product is built in-house,” Blair boasts.
Shopping the Metaverse?
Yes, Article is looking at the Metaverse and its use cases and was doing so before it became du jour. “When we look to the future, it absolutely starts to look like how do we help you visualize product in your space?” Blair asks. He believes AR is a promising area, but there are at least two factors holding Article’s plans back currently. First, getting the accuracy of the size of furniture accurate, he says. If they get that wrong, “that's a super costly exercise for us,” he notes. “So we have to be really confident in the size piece.” The second thing is style. “For the type of furniture we sell, style is so important, and so representing the product in a way that is compelling is this sort of second big piece… If we can overcome those barriers, then what we think is pretty promising is the AR space.”
Opportunities and threats
“The biggest threat is probably also the biggest thing that's been a positive for us over the last 18 months,” Blair recognizes, “which is that the pandemic has basically forced everybody to take e-commerce seriously, and all of our competitors have upped their investment in the space probably five to 10x what it was previously.
“So, we recognize that the home-field advantage that I talked about earlier isn't going to be there if we sort of sit back and rest on our laurels, which is why it's so important… the things we were just talking about in terms of like, how do we help people visualize and create beautiful spaces, versus sort of shop a catalog. That's really what we think is super important for us to push ahead.
“Developing the next iteration of e-commerce beyond sort of an online catalog, I guess, is where we see it going. And that's the biggest thing we’re working on to defend against that.”
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