Millions of businesses have been thrown into a tailspin, but in the midst of it all, home and garden has emerged as a bright spot, seeing increased demand from consumers. As it turns out, the nationwide lockdowns have inspired many consumers to use their newfound time at home to improve their environment. Retailers selling all kinds of products for the home â ranging from fluffy pillows to home improvement supplies â have seen product sales surge, both instore and online.Â
Estimates vary, but according to Forbes, spending in home goods and related categories saw an increase of 220% from the first week in March 2020 to the first week in April 2020. It may come as a surprise to some that the home and garden sector has emerged as one of the success stories of the pandemic at a time when restaurants and brick-and-mortar retail stores are seeing historic declines in revenue and temporarily closed manufacturing facilities have caused massive supply chain disruptions. But it seems that consumer psychology can help explain why the home and garden industry has seen such a strong rally as people hunkered down and began sheltering-in-place.Â
âIn times of crisis, research shows that people will engage in more comfort-seeking behavior,â professor of Consumer Psychology at the University of Southern California, Jorge Barraza, explains in a recent Forbes article, adding that this may incline them towards more indulgent purchases that will make them feel comfortable in the short-term. This is the same reasoning behind why vice or sin stocks (alcohol, cigarettes, and other types of products that can be seen as "unethical or immoral") generally either see little impact on their revenue â and often a lift in sales â during a recession.Â
The consumer drive to find small comforts during a time of major uncertainty has had an unexpected impact on brands in the home and garden space. And while some companies we spoke to already had a direct-to-consumer (D2C) business model that they could leverage for increased sales, other brands used the pandemic as the impetus for speeding upshifts to e-commerce that would have previously taken much longer to implement.Â
But this increase in consumer spending hasn't been all rosy for home and garden brands. The pandemic still disrupted global supply chains and brands that had brick-and-mortar stores saw in-store sales decrease significantly. This has forced companies to make some pretty drastic changes in order to continue operating and find ways to meet consumer demand.Â
Despite all that, some brands have taken creative approaches to transform crisis into opportunity. Here are a few home and garden brands that have found smart, innovative ways to respond to the current pandemic and continued to build their businesses â sometimes in surprising ways.Â
Good and Bed is a family-owned and operated textile manufacturer, distributor, and D2C company that focuses on bedding and linens.
âMy mother started the business about 25 years ago in Bogota, Colombia,â says Sebastian Morales, a co-founder of Good and Bed, who explained that his mother used to hand-make sheets for their family when he was a child. âMany of the products began in our home and later became the foundation for our business.â They now sell to brands in a number of countries in the Western Hemisphere.Â
That kind of heritage story put Good and Bed in a strong position before the pandemic hit. According to market research by FMCG Gurus, âEstablished brands should push heritage to offer reassurance around value.â As consumers reacted to all of the uncertainty around the future by tightening their purse strings, brands with heritage became a symbol of stability. Just like after the Great Recession, heritage became synonymous with quality, and quality synonymous with value.
But heritage alone wasnât enough to get Good and Bed through. Strong market positioning can only do so much against the challenges of decreased spending, disruption of supply chains, and a near-total breakdown of retail norms. Instead, the company used its heritage as an inspiration for ways to solve its challenges, not as a solution all by itself.
Image: Good and Bed
Back to the beginning
One of the first challenges that needed to be addressed was a simple and straightforward one: where to get products to sell. Like many other manufacturing facilities, Good and Bedâs main factory in South America was effectively shut down for two months due to the pandemic.Â
With a vertically integrated business model, figuring out a solution was more complex than just finding another manufacturer that could produce their products. Instead, Good and Bed decided to go back to its roots.Â
âThere's this quote from Mark Twain, and it says, âhistory doesn't repeat itself, but it often rhymes,ââ says Sebastian. "Going back to the early days of the business, when we got our first orders and didn't have our own manufacturing space, we relied on a lot of smaller satellite shops to deliver individual parts for the order and we amalgamated it all, piecemeal."
âWhat we did this time is we cut the fabric in our factory and then we would deliver the pre-cut fabric to our seamstresses' homes so they could sew and stitch from their homes,â he continues. âMaintaining safety and social distancing guidelines has required a lot of creative engineering on the factory side. All our employees are like family to us. The main person who cuts the fabric has been with us since we started so we wouldn't be anywhere if it wasn't for their hard work and dedication,â he adds.
This out-of-the-box approach to keeping their manufacturing chugging along ensured that they were able to continue to fulfill orders that were coming in, while keeping their existing manufacturing employees safe and still able to work. It also highlighted an opportunity for Good and Bed to support local healthcare workers in their community.Â
With the company's seamstresses working from home to sew bed linens from pre-cut fabric, they found that the leftover fabric they had could be used to help ease the shortage of personal protective equipment (PPE) for healthcare workers in the frontline of the pandemic. This led Good and Bed to begin manufacturing face masks and disposable biosecurity overalls for first responders.
Rethinking sales channels
Having secured production, Good and Bed turned their attention to a bigger problem. Prior to COVID-19, the majority of their sales came from retail partnerships with brick-and-mortar stores. As the pandemic raged, retailers closed their doors across the country leading to a distribution problem for companies like Good and Bed.
âWe've seen a massive jump in retail distribution [direct sales through the Good & Bed website] and that has been the biggest increase for us,â says Sebastian. âOn the wholesale side, we partner with big retailers such as Wayfair and Wal-Mart, and we have seen an uptick in sales on the online dropship model with them. But we haven't seen any new orders from storefront retailers. So I think we are turning more towards online sales, as the traditional storefront retailers are closed.â
This shift to e-commerce isnât new. Even giant home retailer Bed Bath & Beyond has invested $250 million into digital transformation efforts â going so far as to turn 25% of their physical stores into e-commerce distribution centers. The pandemic, however, has accelerated this transition. With retail stores closed, brands have had to figure out their e-commerce strategy immediately if they wanted to survive.
For home retailers with physical storefronts, the message is clear: creating a digital presence and finding ways to sell to customers outside of a physical location is critical. Whether that means transitioning to e-commerce sales or implementing a BOPIS model (Buy Online Pickup In-Store), customers need more convenient and safe ways to buy from brands.
How Good and Bed are rethinking their sales channels:
Smart brands look to their past to find innovative solutions for their future. Rather than trying to constantly race forward, the fastest growing brands will be constantly examining the things they do versus the things they did, and adjusting processes as needed.
Itâs never been more important to be online than now, but itâs not too late to jump in even if you havenât previously. For companies that havenât made the full transition to digital-first, there has never been a better time than the present.
Millennials, squeezed between two recessions and feeling priced out of purchasing a house or starting a family, have turned to houseplants as a substitute. According to the National Gardening Association, millennials made up about 25% of the $48 billion spent on lawn and garden products in 2018. That number has been growing steadily and is set to continue getting bigger.
The millennial obsession with houseplants has run headfirst into the trend of "pandemic gardens.â Reuters reports the pandemic has spurred an interest in gardening not just because gardening can feel therapeutic and provide stress relief, but also for the ability to supplement personal food supplies. Sales for seeds and supplies for vegetable gardens have seen sharp increases, and so have plants that cater more to design and decor than to survival.Â
âThatâs an important detail because so many of our customers want to enjoy beautiful indoor greenery, but it can be quite the hassle to get it. What we want is that with just a few clicks, you can get that beautiful plant you saw in a magazine."
It may seem obvious, but the best way to get ahead is by figuring out what consumers want that no one else is doing, and zero-in on it with laser focus. Whether thatâs quality, speed, cost, or something else â focus on whatâs important, and the rest will come naturally.
Personalization is the next big thing; start planning for it now. Whether thatâs personalizing your marketing so that each customer gets messaging just for them, or products that are designed for individuals instead of demographics.
Cariloha
Cariloha has a long history of becoming whatever it needs to be to survive. The 13-year-old brand started out under the brand name "Del Sol" as a collection of souvenir kiosks scattered around cruise port locations selling island leisure products like watches, purses, and sunglasses.Â
But standing out in the crowded souvenir and tourism market is challenging, and the brand was finding it difficult to differentiate itself. A test run of bamboo shirts that completely sold out within two weeks was the catalyst that the company needed to rethink their entire product line and business model. So Del Sol became Cariloha â a company that sells apparel, accessories, and home products made from bamboo, a sustainable material thatâs pesticide-free and rapidly self-regenerates when cut down.Â
Today, the company has a D2C e-commerce site, a successful wholesale operation, and 65 retail showrooms across the mainland U.S., Hawaii, the Riviera Maya, and the Caribbean. But when the pandemic hit, all but two of the stores were forced to shut down.Â
Image: Cariloha
Pivot fast
Vice President of Digital Commerce, Jason Bertrand, says that like many companies, Cariloha began losing money mid-March 2020 and urgently needed to find a solution. They decided to switch the focus of Carilohaâs online sales (which were largely focused on luxury bedding) to its store inventory (t-shirts, tank tops, yoga pants, and accessories).Â
Cariloha took a big gamble on putting their unsold inventory front and center and used discounts, sales, and the scarcity model to turn dead stock into emergency revenue. âWhat we were able to do fairly quickly is pivot and run daily deals on products that we have excess inventory of, those that are more normally sold in stores,â Jason explains. âA lot of our stores are in touristy destinations where people are more likely to buy shirts, shorts, and polos than a pillow or a mattress.â
This strategy could have easily backfired without the right planning. According to Fast Company, no brand should make a mid-pandemic pivot before asking themselves, âWhat are the biggest challenges my current customers are facing right now that we can solve?â Answering that question can help companies identify what products they should be reprioritizing during and post-COVID-19.
The sudden pivot to focusing on selling their in-store goods online for reduced prices appears to be paying off: âWeâve seen a lot of strong activity online since the stores closed,â says Jason, adding that since the supplier inventory they normally sell online is shut off, theyâve been able to spend more money than usual on raising brand awareness.
Brand value is a hard thing to quantify. But creating a strong brand that connects with consumers can have a huge payoff during times of market uncertainty. And Cariloha's increased focus on building brand awareness had a surprising side effect for the company â it tapped into consumers' nostalgia over travel and tropical vacations.Â
âWe are fortunate in this current climate that we still have a lot of products that speak to comfort. We also have a brand name that has this âislandâ lifestyle associated with it. Since a lot of people are missing travel and the tropics, we like to position our brand in that way,â explains Jason.Â
Consumers are tired of lockdowns, tired of COVID-19 news, and tired of ânew normalâ after ânew normal.â Cariloha scored a big win because they realized quickly that what consumers really wanted right now was to be reminded of a time when life was fun and breezy.
Give more, get more
Like many other brands that produce and sell textiles, Cariloha has taken this opportunity to find ways to give back to their community. They've partnered with Mauli Ola, an organization that teaches children with different disabilities to surf, to manufacture face masks and they have donated masks and sheets to hospitals and frontline workers who need them.Â
âItâs been cool to give back as a result of the COVID-19 situation,â says Jason. Cariloha's community support program has not only provided critical supplies for workers on the frontline of the pandemic, but it's also created a lot of goodwill for the brand.Â
Companies can build deeper relationships with their customers by creating community outreach programs that align with their corporate values and mission statements. According to research from Accenture, 63% of consumers want to purchase from purpose-driven brands. Companies that find ways to connect their community outreach campaigns with their customer base can see a boost in engagement and customer satisfaction.
The Takeaway
Some of the biggest brands in history started life doing something completely different. Donât be afraid to play around with business models or radically change things up to keep up with what customers want and need.
Giving back doesnât just feel good; itâs good for business, too. Companies that make a habit of giving back will find it easier to bond with consumers and build lasting engagements â the gold standard for brand building.
Horti
Started in Brooklyn, Horti takes a high-tech approach to the classic dilemma facing modern homeowners: âWhat kind of plant should I buy, and how do I keep from killing it?â The company offers a highly-tailored plant subscription box service that pairs potential âplant parentsâ with the right plants and builds customersâ plant knowledge and confidence by slowly building up from simple greenery to more care-intensive vegetation.
âItâs kind of like getting a karate belt in planting,â says Puneet Sabharwal, CEO, and founder. âWe start you off on really easy plants and then you elevate to slightly more difficult plants.âÂ
Sabharwal says he began Horti with business partner, Bryana Sortino, three years ago as an experiment. He initially coached 20 to 25 of his friends through each stage of the plant buying process in detail, guiding them from selecting the right plants to what to do if one of them gets a brown leaf. As demand from his friends and acquaintances grew, Sabharwal saw an opportunity to turn his hobby into a business.Â
Image: Horti
Give the people what they want
The customer base evolved naturally over the first two years with friends passing on their recommendations to their acquaintances. Puneet spent no money on ads but managed to gain organic traffic just from recommendations because friends and friends of friends were becoming exasperated trying to find plants that worked for them.
The majority of Horti customers are novice indoor planters wanting to learn âhow to not be plant killers;â the rest are what Puneet describes as âseeking instant gratificationâ â customers who want to fill their space with plants all at once. So on top of the progressive subscription service, Puneet designed a system to order collections of plants, including a product named âOrder a Jungleâ â a large collection of plants that harmonize with each other in order to fill up a living space in one shot. Suddenly, Horti had addressed two of the biggest customer needs in one service.
Horti had defined what marketers call a Unique Selling Proposition (USP). People Research explains, âThe main idea of the USP strategy is to present an advantage that the market will connect specifically to this specific brand and through this create a consumer preference and propensity towards the brand versus its competition.â When brands have a clear USP, customers immediately recognize the productâs appeal. With a focus on education and the ability to order an entire homeâs worth of plants, Horti correctly identified two.
âWe felt like there was a gap in this market where a lot of decisions were being made about plants based on aesthetics (whether itâs a pot or a plant itself),â explains Puneet, regarding Hortiâs USP. âWe saw that when you bring plants home without knowing much about them or about the type of environment they need, a lot of people without the exact knowledge they need will lose these plants. That lowers your confidence in plant care at home. Eventually, you feel like youâre a really bad âplant parent,â or you will continue to buy more plants, but youâll do it in a way thatâs not sustainable.âÂ
Horti grew with no marketing by offering a service that few others provided and appealing to some very specific buyer needs.Â
Reimagining retail
Horti has a small âHorti PLAY nursery,â but apart from this one physical retail outlet (which Puneet describes as more of an âexperientialâ tool than a revenue-generator), the majority of sales are online. And not just online, but subscription-based. As physical retail stores were closing due to shelter-in-place orders, Horti was able to largely continue as before.
âWe were really worried in March because we werenât sure if we would be able to sustain the business or ship our plants as much as we want to,â says Puneet. "But the foundation we created for setting up the online store over the past three years was really good. Mostly focusing on selling via our online platform has been playing out really well and has been paying off."Â
And because the online infrastructure was there, and because Horti already catered to consumersâ need for instant gratification with the âOrder a Jungleâ package, they were able to capitalize on a wave of customers stocking up on plants. According to the New York Times, horticulture businesses across the U.S. saw a surge in demand. And so in March, rather than seeing a reduction in revenue, Horti saw three times as much retail business.Â
This paints a telling story of the changing landscape in retail. The traditional model of physical retail went the way of the dinosaurs years ago, sure, but even early online models are starting to fall to the wayside. The era of an e-commerce presence being a background to physical locations is giving way to a new range of digital-first businesses. These companies start online and build their business models online. They are able to personalize services better and can carve out niches that wouldnât work if they had to support a brick-and-mortar business. Horti found success because they didnât take a traditional company and move it online â they found success because they built a company that could only thrive in a digital space.
The Takeaway
Find the thing that makes you unique and lean into it. Itâs easy for competitors to copy products, business models, and marketing strategies. Itâs impossible to copy passion and excitement about what your brand does best.
Great digital brands donât just move an existing business model online â they redefine legacy models from a digital-first perspective. That means radically rethinking how things are done and whatâs possible, but the payoff is always worth it.
How to Not Just Survive, but to Thrive
Challenger brands can learn a lot from how these innovative home and garden companies have made their way through the pandemic and found opportunities for success by adjusting their business models, product offerings, and brand messaging to match the new reality for many consumers.
Brands have to be willing to think outside of the box, practice resilience, and be open to rolling out new products and initiatives quickly in order to respond to market conditions and consumer needs that are changing on an almost weekly basis.Â
By looking at how other brands have successfully navigated the chaotic waters that the COVID-19 pandemic has brought to the retail landscape, challenger brands can find ways to continue to thrive once the dust settles.Â