Parachute is accelerating as a lifestyle brand using customer centricity as a guide
Parachute started out as a sleepy little bedding brand in 2014. In these early days of e-commerce, it was one of the first to introduce luxury bed linen online, previously a department store staple.
The first users who took the opportunity to order online loved the Parachute sheets. They caught on quickly and Parachute officially became a disruptive brand in the home linen category.
With the wind in its sails, Parachute has slowly expanded into offering closely related products including mattresses and pillows, towels, baby and pet bedding, bathrobes and loungewear, all guided by the example of their clients. Founder Ariel Kaye was previously responsible for marketing and advertising, so customer focus was second nature to her.
This is followed by mattresses, bedroom furniture, rugs and lighting, and retail stores, which stood at 12 just a year ago. Now, Parachute is moving from the bedroom to the living room and cementing its status as a lifestyle brand with a mission to make people “feel at home”.
Customer needs are the North Star
“We started as a bedding brand just eight and a half years ago, but the vision has always been to be a multi-category brand for today’s modern shopper,” Kaye told me. .
“We expect our customers to give us feedback and guide us in our assortment strategy. We have wisely expanded our assortment over the years and continue to hear our customers wanting more. And that’s why we moved into the living room,” she continued.
On the face of it, this might not be the most promising time for Parachute to jump into the crowded furniture space.
After a huge spike in sales during the pandemic – furniture store sales increased 25% from 2020 to 2021 – furniture retail sales stagnated in the first seven months of this year, according to the Census Monthly Retail Trade Report. Furniture stores saw no revenue growth this year, even as inflation rose 12.8% to furniture prices.
Yet Kaye remains confident because she has a solution to her clients’ needs and a lock on their loyalty. More than 70% of Parachute’s customers are millennials, now between the ages of 26 and 41, and as a cohort, they’re growing with the now officially middle-aged cusp.
“They are entering their prime earning years and are settling down. This is a generation that loves building relationships with brands that care deeply about sustainability and quality. They buy with their values,” Kaye said. “Home is a priority for this demographic and we are helping them create a family environment for their future.”
Loyalty to customers is returned
Parachute’s laid-back, California-chic aesthetic appeals to this generation and has energized extremely high levels of brand loyalty. About 90% of customers return for new purchases within three years, and about a third of sales each month come from returning customers.
Clearly, people are more likely to make more frequent and repeat purchases of bedding than furniture. But the company is counting on the loyalty it has created in the bedroom to extend it into the living room where it offers a selective range of upholstered sofas, chairs and tables to complement the room.
While the silhouettes of upholstered furniture are limited, the company offers a wide range of manufacturing choices, unique to a brand in the world of household linens. Close-ups of upholstery textures on the website and its sample program allow customers to touch and feel the quality, virtually or in person.
The happy surprise of Parachute was the loyalty of interior designers, a very selective public but with the permanent needs of its clientele of luxury clients. About 25% of its furniture sales are made by interior designers and the company relies on their loyalty to grow with their furniture assortment.
“We attracted the interest of interior designers from the very beginning of Parachute. Because they bought our assortment, they buy more and spend more for their customers,” she explained.
“We were able to create a service for designers that accelerated our growth in the $41 billion interior design market. It’s a huge customer base that we have tapped into and are continuing to grow. We keep them in mind when designing new categories,” she continued.
Retail stores complete the connection
Parachute’s expanding retail chain is also central to its growth plans. Currently operating 20 stores, it will reach 25 by the end of the year, doubling the number of retail outlets in the last year alone.
It targets communities where Millennials congregate, in neighborhoods with restaurants, ice cream parlors and other destinations where there are as many things to do as there are places to shop. The store’s footprints are smaller than a typical furniture store and therefore fit into spaces that others don’t and they have a showroom feel that makes them more boutique than a traditional store.
And her West Hollywood store is in the Los Angeles Design District and caters more to the home decor trade, though it’s also open to the public. “It’s a concept that we can roll out to other cities where there’s a big commercial presence,” she explained.
Additionally, Parachute has partnered with Nordstrom starting with pop-up stores in nine of their locations and now in 15 locations, with plans to move into traditional Nordstrom home departments in select stores. Nordstrom’s customer aligns closely with Parachute’s target market, so it’s a fitting partnership for both.
“We have a very ambitious retail strategy ahead of us and we are very opportunistic about where we can be and look for the right places with the right housemates and neighborhoods where we think our customers will want to hang out” , she says.
Currently, the company remains heavily reliant on online sales, with retail accounting for only around a quarter of the company’s revenue. But it has tracked a “halo effect” in online sales in the markets where its stores are located and delivered double-digit year-over-year revenue growth in its established locations.
What also gives him confidence in his furniture expansion is that customers who have bought his furniture end up spending 22 times more in future purchases in all categories than those who come to the brand in any other category.
“We’re able to truly connect with our customers across multiple touchpoints, both online and offline. We emphasize seeking feedback and have clear lines of communication with our customers,” she explained. “We grew alongside our customers and evolved and iterated with them as we became a bigger brand.”
Kaye and her Parachute team take an authentic and proven consumer-centric approach to building a brand and a business. This gives them the assurance that even if the domestic market turns south, they can continue to be guided by the North Star of their business – the customer and the satisfaction of their current and future needs.
“Our approach has been authentic and today’s customers are very sensitive to authenticity. They are looking for brands with a clear point of view and we have been able to establish a relationship of trust with our customers.
“They come back and buy in all categories. Thanks to this trust and our discipline around our assortment, we were able to successfully move into new categories. The show is the next logical step,” she concludes.