Online-only home goods retailer mDesign does most of its business on online marketplaces. It only recently branched out to focus on its own ecommerce site.
“We built this brand the opposite way of other retailers,” says CEO Stacey Renfro. It started by selling its home storage and organization pieces on Amazon.com Inc.’s marketplace about five years ago. And now it has more than 1 million searches for its brand on Amazon every month, Renfro says.
“Amazon built our brand by its reach of customers,” she says. “You can reach so many people of a large market segment. You don’t have to be so targeted with demographics and segments.” That led mDesign to spend very little on marketing because it had no specific target customer demographics and Amazon is responsible for most of the marketing.
Its products then get reviews, which boosts its position in Amazon search rankings. MDesign has garnered more than 200,000 reviews and its review scores are high, averaging over 4.8 star rating, Renfro says. “The practice of using marketing to gain paid placement when a SKU needs it, combined with the number of reviews and high ratings, have grown the affinity for the brand,” she says.
While it doesn’t sell “sophisticated” products—it sells items like plastic bins, fabric dressers and storage baskets—each product is meant to solve a problem, Renfro says. And mDesign differentiates itself from other home goods retailers by making its products “a little more special,” she says, such as selling a rose gold dresser or a trash container that comes in 15 colors.
“These special details and our extra expansion into the home goods assortment will help us provide things to consumers that mass retailers don’t,” Renfro says.
The retailer has been in a “hyper-growth” mode since its inception, Renfro says. It ended 2020 with more than $250 million in online sales and mDesign anticipates ending 2021 with more than $350 million in sales. Although most of its online sales come from marketplaces, it is building more brand awareness for its ecommerce site mDesignHomeDecor.com, which it launched in mid-2019, Renfro says.
“As we remain in hyper-growth mode, we are simultaneously focused on building a solid foundation and brand that can continue to scale,” she says.
“We see ourselves as a $1 billion-plus brand. But we have to ensure we’re set up for scaling to that,” Renfro adds.
Aside from Amazon, mDesign sells on other marketplaces, including Target, Walmart and eBay, and it plans to branch out to others, such as Lowe’s and Wayfair, in the coming year. It chose to sell on marketplaces initially to eliminate the middleman, Renfro says.
“We want to go straight to the customer and respond to customer demands and need,” she says. “Plus, customers are shifting to shopping online and on marketplaces, which intersects with our strategy.”
But a big reason for choosing marketplaces was it enabled a very small investment in the necessary technology to get up and running, Renfro says. Marketplaces have the tools in place to upload items for sale and to track sales. However, a challenge still arises with that: Every marketplace is slightly different in how everything works.
“We can’t just replicate what we’ve done on one to the other,” she says. “Everything from how the product needs to be set up to how marketing works, down to the financial model. Each one of them might have a different commission structure.”
Another challenge with selling on a variety of marketplaces is that they each have rules and those rules change. “We have to adjust and adapt to stay there,” Renfro says. “We’ve maintained a third-party seller status [on Amazon] so we’ve been able to keep control of our brand and pricing and control some of the impacts of those rules.”
Building a brand
2020 was good to mDesign, as it was to many home goods brands and retailers, Renfro says. “Everyone in the home category benefited from the stay-at-home movement,” she says. “We felt the bump on top of our strong growth.” She declined to elaborate how much its online sales were impacted during the height of the pandemic.
As mDesign plans out 2021, it wants to focus on building more brand awareness, she says. “We are really focused on making sure that everyone knows who we are and putting more effort into the brand itself.”
MDesign plans to add new categories such as accent furniture, tables with storage and adjacent kitchen categories.
It also wants its site to be more solutions-focused. For example, when shoppers come to its site with a specific problem—such as needing to organize their pantry or design ideas for their closet—the retailer wants to adapt its site in a way that supports those needs, Renfro says. It is doing that by adding more products to support specific needs, like pantry organization, while also adding more resources and tools for shoppers to solve their organization issues, she says. Its specific site plans are still in the works.
Although it is trying to drive shoppers to its ecommerce site, mDesign has no plans to shy away from marketplaces.
“There are a lot of home products but not a lot of home brands selling on marketplaces. It’s a very fragmented segment,” Renfro says. “We’re expanding into other marketplaces this year and expanding internationally to keep growing our brand.”