One change to how Rugs Direct boxes its products has saved the retailer money while making delivery easier, according to Sharon Gautschi, chief merchandising officer of Elevated Brands Group.
“This is not glamorous, but it’s so glamorous to me,” Gautschi told Digital Commerce 360. “We’ve shifted to folding hand-tufted rugs.”
Rather than rolling all its rugs, she has pushed vendors to fold them when feasible. It was a “very big mental block” for many vendors, though. Hand-tufted rugs are thick and they have a mix of backs, she explained. Some backs are a little bit stiffer, but some are more pliable. Folding them will not cause permanent damage.
Elevated Brands Group owns and operates home decor and furnishings retailers Rugs Direct and Lightopia.
Rugs Direct is No. 622 in the Top 1000 Database. The market research tool tracks North America’s largest online retailers, ranking them by annual ecommerce sales and more.
Rugs Direct is also No. 492 in Digital Commerce 360’s new AI Rankings. That set of rankings is available in the Top 1000 Pro with AI Database.
Why a boxing change improved Rugs Direct’s delivery costs
Rolled-up rugs create an inconvenience in the logistics tied to fulfillment. Gautschi likened their shapes to the Tootsie Roll candy.
When it comes to rugs, she said, “no one wants to ship Tootsie Rolls. They’re super long. They’re skinny. The big ones are super heavy. You need two or three people to help you with that, 9 by 12.”
Their weight and length on larger products make them expensive to ship, too. The switch to folding rugs rather than rolling them has led to huge savings, according to Gautschi.
“You’re not getting into any oversized fees,” she said. “It’s also not telescoping. So that you’re not being charged for something longer than what you thought; it’s a lot more under control. It’s cheaper to begin with, but it’s also more under control where some of those additional fees may not hit you — those penalties.”
She said she has worked with “every single one” of Rugs Direct’s vendors on this procedural change.
“The cost savings for shipping a folded rug versus rolling far outweigh the one or two rugs — the low percentage of rugs — that may need to be replaced due to some unique situation,” Gautschi said.
How Rugs Direct ships its products
Rugs Direct exclusively uses drop-shipping for its sales, according to Gautschi.
“We have the relationship, though, with the carriers,” she said. “But the vendors ship for us.”
That has its advantages and disadvantages, she noted. When it comes to shipping cutoff dates, Rugs Direct doesn’t have as much control as some large retailers do, she said, citing Walmart as an example.
“Even if it’s drop-shipped, they can guarantee a date,” Gautschi explained. “That’s not as easy for us. But also in general, giant, ginormous Tootsie Roll rugs are not as urgent as the TV you’re trying to get to open on Christmas morning. It’s a challenge for us — something that we don’t tend to promise. But from a marketing perspective, we approach it more like: these are in stock and ready to ship now.”
Being clear about when Rugs Direct can ship an item has been key for the retailer, she added. The retailer addresses that in different ways for all its vendors because each one works differently.
Role of AI agents on Rugs Direct during the holiday season
This holiday season will also be Rugs Direct’s first with its artificial intelligence (AI) shopping agent.
“The kinds of things that customers are asking about, though, usually are return policies,” she noted. “If it’s outside of products, the return policy is the biggest question. But shipping lead times, the agent should be able to answer that because it’s information that’s on the page.”
Rugs Direct has fed its return policy and related information to the large language model (LLM) powering Ask Cleo, its AI agent.
“This entrance of AI or agentic search has been particularly great for the home ecommerce industry because buying something for your home is naturally more conversational than maybe some other products could be, really asking about things that a customer may not know about,” Gautschi said.
She gave examples that customers buying from Lightopia might not know what color temperature is or that they need a slope-ceiling kit. As a result, they would benefit from asking questions in natural language.
“Then, the agent is able to answer questions for them on the spot to encourage conversion,” she said. Agents, to me, are things that are provided so that you can really help a customer make a confident purchase decision. My goal is to reduce the buying lead time.”
The buying process for Rugs Direct often takes about eight days. On Lightopia, it’s about 14, according to Gautschi.
“So we really want to make sure to provide the right information and inspiration for customers to be able to buy the right product for them and to keep returns at bay,” she said.
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