A to-the-trade approach to DTC sofas: How Benchmade Modern breaks the rules

0:03This is Business of Home. I'm your host, Dennis Scully. Every week I'll be speaking to leaders and innovators from all corners of the home industry. My guest this week is Dan Campbell, the president of Benchmade Modern. Like many direct-to-consumer companies, Benchmade Modern takes out ads on Instagram and sells its sofas online. But unlike most of its competitors, the company is based out of a U.S. manufacturing group, Artisan Lane, the owner of Lee Industries and American Leather. Dan is also an unlikely DTC president. He's not a Silicon Valley entrepreneur, but a 17-year veteran of Holly Hunt.

0:49I spoke with Dan about how the lessons he learned from the trade apply to the direct-to-consumer world, why gray sofas are over, and why consumers care more about design than lead times.

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2:03Over the years, its collections have grown to include timeless designs, both modern and classic, drawn from iconic periods and places, and brought to life by renowned designers like Suzanne Kassler, Ray Booth, David Phoenix, Susan Habel, Kim Scodro, and Marriott Himes Gomez. In partnership with interior designers, trade showrooms, and high-end boutique stores, Hickory Chair's master craftsmen create bespoke furniture that reflects the designer's vision and is celebrated for creating luxurious yet livable furniture designed to stand the test of time. Visit HickoryChair.com to learn more. And now, on with the show.

2:52I want to set this up by talking about, because you were reminding me recently that you not only worked for Holly Hunt, which is how I came to know you over the years, but also for the remarkable Sally Sirkin Lewis back in the day, another Hall of Fame inductee and a powerful force in our industry back in the day. let's talk a little bit about your career path and how that came to be you were reminding me that architecture was once the dream yes yes dennis uh went to architecture school and not all these big dreams building you know all these things and then in the real world it was you know office renovations bathroom stalls and it was like five percent creative and 95 project management which is not what I thought it would be.

3:41So I was working, my last role was at what's now TPG, the Phillips Group in New York. And a friend of mine from Design Text was probably complaining. And she was like, oh, I'll get you a job at J. Robert Scott. And so she knew somebody there and literally that's all it was. And so I went over there. But I learned a ton from Sally and just the way she thinks about things and her business and the quality. I think it was quality was really my biggest takeaway from her, just the detail and the level of making things perfect and always striving for the best quality. Well, and let's remind people what J.

4:16Robert Scott was. And I mean, I was reading up since speaking to you first, I was reading up and reminded that she was the first woman to open a showroom back in 1972 on Melrose. And it was a big deal. And she was, as I say, she was a force. Yeah, a forerunner. Yeah, big, huge multi-line showroom originally with Jim Thompson and really brought all those brands to LA and then really narrowed her scope into her brand, which, you know, at the moment was, was it, it was the top brand for, for quite a minute. Well, and then, and so then how did you transition to, to ultimately work for Holly Hunt where you were for, for much of your career?

4:53So I went from Sally to creation Bauman, which was a Swiss, Swiss textile mill. I ran their U S kind of distribution or partnership here with Carnegie did the commercial side. And then I was doing the residential side for them and which was another great experience so learning you know literally in the mill making weaving all of those things uh for an international company which was great and and then holly came knocking and i was like i don't know and then i really was like i don't know and she's you know it's this crazy huge successful business and i was like i'm not sure well so what was your impression at the time what so when you say i don't know what were you thinking what was holly hunt to you it was this great place but it was always to me i think at that point when I wasn't in it.

5:37It was really kind of set somewhere else within the industry in this space. And I think part of it was just change, you know, moving from one thing to another. Like, you know, I went out and met her and I mean, you know her, but she's hysterical. Do you know what I mean? So we're like driving around the car, going to the showroom, going to the warehouse, getting gas. We literally pumping gas in her car on the interview. And, you know, We went to like 10 locations in about five hours. She was great. She's just a really great person. And so I was like, oh, this is going to be great. So that's when I jumped ship and moved over there.

6:13And I was there for 17 or 18 years, a long, long time. Exactly. You were there for so much of your career. And I feel as though, and I don't know what you came in as originally, but you rose up over the years to really be one of Holly's key right-hand people. Yep. Yeah, I started as national sales for Great Plains at the time. It was just a textile and leather collection. Okay. And then we grew that, and then it was furniture. And then, as you know, it changed, you know, years over time, and I just kept growing within the company. And it was fun because you kept, my role kept changing, the company kept changing, our ownership changed.

6:49You know, like all these things kept happening. We had left all these different things happen. But it keeps the job, you know, interesting because you're always doing some new project or new focus or something. So it was really fun. Well, and as you say, I mean, and you and I talked about this recently. So funny enough, I just sat down with Holly at the New York School of Interior Design and had this wide ranging and typically all over the place conversation as one does with Holly, which is part of the fun of it. But I wonder what really stuck out for you that you feel that you learned from the long time that you were with Holly.

7:26And as I say, the ups and the downs with that organization and different corporate ownership and all of that. I think, Dennis, it is about getting it right and quality are the two things that I took away from her. And I think one of the expressions, which I think everybody knows, is don't let best get in the way of better. and it's really a great phrase when you think about it but you know she really looked at everything like that you know as I said like the piece of furniture it's good but can we change it by a quarter inch can we increase the thickness of the foam what can we do to make it better and that really was that that strive and passion I think to get everything right and never chins out never cheap out it was like whether it's the wine which you know she had the best wine or it had to the best wood or the best leather.

8:14And it really was like all and everything else would follow is what she would say. Do you know what I mean? If you make great product with good quality, good design, you know, sales will follow, the brand will follow all of those things. But having the product be the kind of core of the idea of the business and the other things will fall into place. In wrapping up your time at Holly Hunt, because you transitioned to the company that you're at now, were you just feeling like you wanted a new challenge? What was going on for you? Because I know it couldn't have been easy to step away. Yeah, I think there was a lot of changes going on.

8:52That was post kind of new ownership coming in with her Miller. And I had met Brian, who's the CEO of where I am now at Artisan Lane. He was in York and we were developing the Hollyhunt Walls collection. And so I got to know Brian very well from York for three to four years. And he had moved over to Artisan Lane where he is now and had reached out. I think it also was a point where how long, you know, I've been there so long, if I don't do something different, is it just a forever thing? And so I'm excited about the change for me. And it's helped me learn so much about, you know, because what I'm doing now is this digital, e-commerce world, which is really different from my analog life at Holly Hunt.

9:37And so it's actually made me much fuller. It's learning something completely new and different to me, and it's been a great challenge. In the end, it was the right thing. Well, so let's explain what Benchmade Modern is and a little bit, as you were suggesting, the parent company relationship and all of that. So Benchmade Modern is upholstery focused. We do custom upholstery and it's online e-commerce for both direct to consumer or the trade. And what we've done is created a process where you can customize your piece, whether it's every five inches or to the inch, the fill, the finish on the wood, COM or textiles or leather.

10:18but the big changes it's we can produce it in two weeks delivered in four weeks you know made in three weeks or four weeks which is weeks not months you know and that's i think coming from where i was you know it's it's all the back and forth from paperwork to signings to lead times approvals and for you know a consumer or trade you can just simply go on the website look at the product pick your fabric see the product in your rendering pick your wood finish hit, boom, boom, your freight's done, your ECD is done, it ships. Well, and I want to talk about some of the specifics of that. But so you come into this organization and if I recall, the parent company had bought Benchmade Modern, I want to say, was it 2019?

11:042019, yes. So the larger company is Artisan Lane now, which used to be American Leather holding. So it's American Leather, Lee Industries, Benchmade, and then Brookline, which is more hospitality focused. So there's four companies under it, but we're all separate companies that have our own DNA and work very independently. But at the same time, we all benefit from each other. Well, so as you were just describing, this is a big transition for you coming into this digital world, right? And we've talked so much recently about the many challenges that a lot of these online brands have been facing over the past few years.

11:50So a dramatic increase in advertising costs, these big shifts in how Google and other search engines are leading people to different brands or not, the algorithmic changes that have had such a huge impact, right? Yeah. And you've had to really ramp up your skill set, I'm assuming, in digital marketing altogether. So tell me a little bit about that. Yeah. So, I mean, what I thought I knew coming in was I understood web and some things that I did at Holly Hunt. And then I realized very soon, I was like, I don't know as much as I thought I knew at all, you know, from email marketing to SMS, to digital, to Google, to, you know, meta, all of the different platforms, you know, all these things that I really wasn't as tuned into the way you can go after a customer in their, you know, cycle of buying, like, you know, get them excited about it.

12:42It's top of funnel and what information they need at this point, what activity to do the site, and then how you give them information based on what they were doing on the site. It's, it's, it's fast. I have to say it's fascinating. Well, so your remarketing efforts are working very well because ever since you and I got off a call the other day, you have literally just been following me around my house and just presenting me ads for Benchmade Modern. At every turn, I would open the refrigerator, there'd be an ad for Benchmade Modern. I'd get in the car, there'd be an ad for Benchmade Modern. I mean, so I mean, that is it is really interesting to to learn how all of that works and and to and to better understand.

13:22Have you found, I mean, obviously Instagram must be your main driver, but you tell me. Meta, which is Instagram, Facebook is definitely probably the main driver for getting people interested, but it is also the magazines and the news. So New York Times, Wirecutter, Forbes, Arc Digest, all of them publishing articles, whether big or small. It's another way for people to find us, email. And then the collaboration we did with Eva Amore is another great, you know, because it's her talking to her audience and different things like that. So it is definitely a little bit of a spiderweb, but meta, Instagram, Facebook is definitely probably the main driver.

14:00And it sounded as though, and then we'll talk more about Eva in a moment, and thank goodness I learned how to pronounce her name correctly because she's quite adamant about making sure that you don't call Eva. I mean, then you shouldn't spell it EVA is all I'm saying. Because it could be A. Right? I mean, if that's your big concern, I would just change it up. But anyway, that being said, I mean, I was excited when you went and made this transition and I wanted to give you time. And I think you've been there almost two years. Almost two years. Yeah. March, it's two years. Yeah. Yeah. So I'm curious a little bit about what I assume was a bit of an arc for you of both getting up to speed with the brand and what it was all about and the digital marketing skills that we've just discussed.

14:47But also, it looked as though there was some repositioning, some rebranding. Sounds like you brought in a newer advertising agency. And so tell me some of the things that you, the changes that you've made since you got there. It really was a full reboot, is how I would say. I mean, it was new logo, new brand, new color palette. My first hire was a furniture designer, so we came up with all new furniture designs. We're tweaking things we had to get the scale correct and photo shoots, new ad agency, adding renderings to sites so you can see the product in your fabric or leather. I mean, it was really honestly like almost like a startup from we had the foundation of the know-how and the site functionality, but it was really redoing or fixing, adjusting, tweaking almost every aspect of it.

15:32When you were thinking about the rebranding and the look and feel, were you thinking about your trade experience over all of those years? And did you want it to feel more trade friendly or trade appropriate? Or tell me how you thought about it. I wanted it to be, you know, move the brand up and trade friendly so they understand it. And so we did new trade pages and all those things. but also not going too far because it is still a direct-to-consumer brand. So I wanted to make it very approachable at the same time so regular Joe could look at it and be like, I could have this in my space. It would feel relatable to their home, but at the same time making it relatable to the trade for project use.

16:20Have you learned what matters most to the consumer about this product? It's design. So we did a bunch of surveys with people who had bought, And we thought, you know, it's going to be lead time. It's going to be certain things because that's, you know, no one can hit that lead time. All the surveys always come. It's design. They love this product or that product or the look of it. And that's, at the end of the day, I think it is what people want. They want something that they like. It's beautiful and they like the look of it. So that's what resonated the most. And we should talk, since you mentioned this lead time, which people are going to say, wait, what?

16:58Two to four weeks? That's impossible. How can that be? What does that mean? So take us through an order process. this? So one is it's all online, but once it's put in the system, it literally goes in the next day, we believe 24 hours if there's any changes. Otherwise, it's right into production. And I think, Dennis, the big difference for us than a lot of other makers is a lot of makers go one plus one plus one plus one. You know, this takes one week, this takes two weeks, this week, this. And we're doing everything at once. So this group is cutting foam. These guys are building the frames. These guys are cutting fabric.

17:37These people are sewing the fabric. All of those things are happening at the same time. And then they're coming together to get put together, but everything is happening at once. Well, that's what I was curious about because having worked in the customer upholstery industry myself, I'm more than a little bit familiar with the components challenge in all of it. And I worked for a very established company that didn't make its own frames, for example, for the most part, right? So are you suggesting that you're both making your own frames and your fill and all of that? Because you have multiple places that are making pieces.

18:15Correct. But everything is done in-house at both. I mean, in two locations, but under one roof, if that makes sense. And it's still all hand. I mean, we do have great technologies, you know, from laser cutting leathers and all these types of things, but it's the care of quality and someone's eyes and hands are on every single part of the process.

18:36We're taking a quick break to remind you that you can discover Hickory Chair at a trade showroom near you, or explore its website to find inspiring collections, fabrics, finishes, and a wide range of customization options for crafting bespoke upholstery and wood pieces for your home. If you're attending High Point Market this spring, stop by their stunning showroom at 200 North Hamilton. Experience Ray Booth's new collection, Unwind in the Design Center, and enjoy a cup of espresso, a cocktail, a free lunch, and Hickory Chair's signature hospitality. For more inspiration, visit hickorychair.com or follow along on Instagram at Hickory Chair.

19:21And now, back to the show.

19:27And the customization. So what is interesting is the ease with which you can just slide a unit on a website and go from 65 inches to 100 inches, right? And then just knock off some other custom components of it. So tell me a little bit about what you're finding people mostly do when they order a custom piece. I think what's really cool for the direct-to-consumer piece of it is they're getting a one-of-a-kind piece for their home that fits their home, their lifestyle, whether they have kids or it's a country house or whatever it is. But it's the exact size they need. So we can do a sectional that's 105 by 150 and then picking the fill.

20:14So we do foam or trillium, which is like a synthetic down. So kind of how do you want the sit? What finish do you want the legs? we offer it maybe extra deep standard depth but so based on you know if you're a six foot five guy and so you want an extra deep sofa and you have dogs and cats you do get a performance fabric and you want it a little more cushy let's go with the you know the synthetic down but it's all of those things and then they really you really can create something one of a kind for you your body your lifestyle and you know aesthetically for your house so it's i think that's for me kind of the cool thing that you can't do at a lot of places a lot has been written over the past few years about direct-to-consumer in general, how much it has changed.

20:55The founder of Bonobos is often out there explaining, I could never do what I did to build my brand originally today, just because the cost is so dramatically higher, but also it's just much noisier. And when you go on some of these platforms, there's just a lot competing for your attention. So what have the companies that you work with advised you is the way into this? What have you found to be successful? Because a lot of companies are trying to figure out their digital marketing strategy. A lot of it, I think, has to do with, and again, maybe this is me, is the assets or the ad creative. I mean, what is going to catch someone's attention?

21:34What's going to draw them in? And I think it does go back to product and it's beautiful. And again, that's kind of the way I approach this whole thing was looking at product design and quality of those things, as opposed to some of that more true digital thing. And I think one of the reasons they're struggling or why there is a lot of struggle when somebody came out with something, you know, 10 years when this was all kind of new is there wasn't enough meat on the bones as far as the product goes. You know, they could figure out the digital marketing piece 10 years ago, but the product didn't resonate as well.

22:07So it's harder and harder to get in front of someone with mediocre product, I think. So for me, it's the assets, the creative, just it gets in front of them. And then really looking at what works, amping it up, you know, what's not working on a really constant basis, like moving from where you're putting an ad to how's it going out to what's it look like and using that data to just continually improve. You know, if you, if something's working, mirror it, keep going forward with, if something's not working, pull it out. The other component in all of that is how digital brands often think about their marketing budget.

22:44And in the beginning, it's like you just have to throw everything you possibly can at that marketing budget to get any kind of scale, right? To get any kind of recognition. Yeah. So where are you in that cycle? Are you still in a stage where you're investing a very high percentage of your overall revenue into advertising and marketing because you're still trying to build brand recognition? So I think we've figured it out. Pull out the P &L, Dan. let's break this down tell me so i think what's happened you know when i first started we were working with one ad agency and row as which is you know return on ad spend right we were getting probably a six or seven maybe an eight which wasn't it's still okay but it was you know we were spending to your point a lot more but not as efficiently and we moved to our new ad agency last spring and our efficiency has shot up now we're getting 12 13 even 15 row as both in google and in meta times during high periods.

23:44And explain to people exactly what that means so that they understand. So ROAS is return on ad spend. So if I spend$100 and my ROAS is eight, I'm getting$800 in sales. If it's 12, I'm getting 1 ,200. So for me, when we start seeing it from switching to the new ad agency with new creative, with better assets, to be going from this literally sometimes six ROAS, if not worse, into the teens, is that's for me showing it's working, you know, the efficiency of the spend. And then the other piece of it is, you know, at those numbers, you know, at 14, 15, 13, it's too high, meaning you're leaving sales on the table.

24:24Well, so what do you do about that? So you get this number back and you go, wow, this is really, so what should we be doing? Right. And we're looking at it like daily. You know what I mean? We're looking at that. That's one of our big measurements. And so it's figuring out other audience areas to go into. It could be a different platform, whether it's Pinterest, whether it's something else, where LinkedIn, you know, where are we not spending to capture the different audience or do you spend deeper in, you know, meta or Google, depending on, on what the time is to get more out of it. So the other big challenge that so many direct to consumer brands talk to us about is boy, without having some kind of physical presence, it's really hard.

25:06And some choose to create pop-up partnerships as a way of showing up in physical spaces. Some take spaces in some key markets once they have the wherewithal. What in your mind would make sense? And how much of a challenge do you feel it is for you not having a physical presence? It's definitely still a challenge because it's the number one reason people aren't going to buy because they do a lot of people just want to sit in the sofa they want to they want to buy so we do everything we can to help them whether it's printouts online design consultation sending real fabrics long term for us though i do think opening stores in you know key markets new york dallas you know la whatever the the spots are to help people come sit and feel and i also think bigger picture for the brand it helps solidify it too for for everyone for the whole country just to know, okay, we have physical locations and I can come sit in it and understand what it feels like.

26:06So is that something that's in the works? It is. We're looking at it. We're looking at actively doing something in Dallas would be the first location. And it could be as soon as this year, if not early next year is where we're kind of looking for it. So some companies have told me that if I price it too low, people don't believe the quality level? Because I noticed in Wirecutter, they said, listen, it's not the least expensive option, but it's a quality option. And I wonder how you all have thought about that. So partially for the pricing is what it costs to make the sofa. Again, here in the US, we don't have the luxury of pricing anything lower than where we are, just because we're using top materials, top quality, and it's all US made.

26:57I do agree though. I mean, I think, to be honest, again, coming from where I am, I think we could be higher. I'd like these sovers to be a lot more expensive based on my experience. 10 ,000 sounds good. No, but for the American consumer, our price point is kind of higher, but not crazy. Do you know what I mean? We're on the higher side of things, but for something that's the quality we're producing and the customization that we're providing, I think it's an incredible value. And for the trade, it's a great entry price point for them. Well, so tell me how you're thinking about the trade and tell me, because obviously with your background and experience, one assumes that that's a market that you're eager to go after.