Furniture brand manufacturer Burrow selects a trendy Chicago neighborhood for its second store that it plans to use as an event space as well. Burrow’s sales surged in 2018 and it plans to continue opening stores in major markets.

Direct-to-consumer furniture brand Burrow opened a new store in Chicago this month. The showroom is its second physical retail location after its flagship location that it launched in September 2018 in New York City, which is where Burrow is headquartered.

Burrow launched in April 2017 as a web-only merchant looking to disrupt the traditional furniture market. Burrow seeks to create high quality, easy-to-assemble furniture pieces that can easily be disassembled and moved home to home, and ship the products within the week of a shopper purchasing it.

In its two years of operation, Burrow has more than 16,000 customers, more than $5 million in total sales, and its sales have been growing on average 18% month over month since launch, a Burrow spokeswoman says without revealing specifics. Burrow has about 40 employees and raised about $18.3 million to date. It is not yet profitable and will likely raise another funding round in the future, the spokeswoman says.

Burrow’s retail store expansion

Burrow also had a multitude of pop-up shops, including a few at malls, before Burrow decided to focus on building up its own retail storefronts as one of its pillar strategies. Its two other pillars are product expansion and constantly improving its ecommerce platform. The retailer had a “fantastic” 2018 in terms of sales, in which sales were 5.5 times greater than 2017 gross bookings, the spokeswoman says.

This revenue surged allowed Burrow to lay out an aggressive retail expansion plan for 2019, which includes opening the Chicago store, and has one store slated to open this fall, she says.

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Burrow is focused on opening stores in cities where web traffic and online sales are increasing the most, which includes San Francisco, Chicago, Washington, D.C., Seattle, Los Angeles. In March 2019, Chicago surpassed San Francisco as its second largest market from a revenue perspective (behind NYC), which made it a top contender for opening a store.

Burrow has a focus group called Burrow Lab, which has a couple hundred members of customers, investors, partners, friends, family and industry professionals, that it uses for feedback and to test new products. Burrow asked its Chicago shoppers about desirable neighborhoods for opening a store. Many mentioned Fulton Market as a hot area, but probably not attainable for a smaller merchant. Tech giant Google Inc. recently opened a large office in the Fulton Market neighborhood, which is adjacent to a lively restaurant and bar street in the West Loop, where McDonald’s Corp. also recently relocated its headquarters to.

The Fulton Market area struck a chord with Burrow. The neighborhood, nearby to workers and nightlife, is different than its store in the New York, which is in a primary shopping area in SoHo. Burrow found an empty space for its store in Fulton Market, although the site will eventually be redeveloped. It has the location for a year, but plans to find a more permanent spot in the Fulton Market neighborhood, the spokeswoman says. Burrow is excited to test out plugging into a consumer’s life at a different point in the day such as before or after work, and not because she set out to go shopping, the spokeswoman says. Also unlike the New York City showroom, the Chicago location has a parking lot, which it plans to use for community events and it allows shoppers to drive to its store. Burrow plans to keep a small amount of inventory on hand so that shoppers could actually purchase a product and leave with it that day, unlike the New York City location which is a purely a showroom. Burrow plans to stock its most popular pieces, and products that are popular with its Chicago online customers.

Burrows products are modular, meaning, the cushions for a loveseat, couch and a chair are all the same. If a shopper wants to expand its couch with another cushion, she would just need to buy the back and bottom cushion in the same material and add it in. This also means that Burrow can fulfill multiple SKUs with the same inventory pieces.

Sales benefits of stores

After opening its flagship store in the SoHo neighborhood of New York City, Burrow.com’s conversion rate for New York shoppers increased 100%, the spokeswoman says. Plus, the retailer had a 100% increase in New York City-specific customers. The retailer hopes the Chicago store will have a similar effect on online sales, which is the majority of its revenue, she says.

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Part of how it plans to attract shoppers to its store is via events. In fact, the Burrow even moved up its store opening by two weeks so it would be open for a popular street fest down the block so shoppers would be able to check it out.

In its New York store, Burrow hosts events such as pet adoption party, panel discussion or speak easy party, roughly once a week. It collects consumers’ email when the RSVP for the events to later track if they go on to make a purchase. A handful of consumers that attended an event have gone on to make a purchase, the spokeswoman says without providing specifics. Although, the goal of event is not immediate sales, but rather building brand awareness in hopes of staying top-of-mind when they are considering a furniture purchase in the future, the spokeswoman says. About 68% of Burrow’s shoppers are new, she says.

How Burrow listens to shopper feedback

In the past few years Burrow has made a few tweaks to its design based on shopper feedback and from tis Burrow Lab group. Since its launch, many shoppers have requested leather material. It took Burrow two years to find the right leather tannery that it wanted to manufacturer its leather. Because the furniture is modular, it needed to ensure that all the dyes would be consistent and match, even as it ages. This way, a shopper could have a leather chair, decide she wants to turn it into a sofa and buy another cushion and it would still match, the spokeswoman says.

It also relaunches its sofa system in April based on shopper feedback. Customers said that they use their sofa to lounge. And so, Burrow lowered the arms of ifs low-arm sofa pieces so that it is the right height to cradle a neck.  It also improved its assembly latches to make it easier to put the furniture together. While there is no exact metric Burrow is touting for how much faster the assembly process is, in the past Burrow may have said it took 15-20 minutes to assemble its furniture, and now it likes to say 15 minutes or less, the spokeswoman says.

Burrow hopes to launch more furniture pieces beyond seating in the near future. It plans to focus on living room pieces before expanding into furniture for other rooms. Burrow works to differentiate its furniture by being clever, functional and stylish with the fewest numbers of SKUs. It has four different styles including rustic, bohemian, industrial and mid-century modern, and it plans to design pieces to fit those profiles.

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