How Snug Used Livestreaming and PR to Drive Sales

0:00We went from zero to 30 million in three years, which is sort of that hockey stick venture growth. But we weren't venture-backed. Really, it took for a few of these big events to happen, which really kind of knocked us off course for a year. Hello and welcome to Shopify Masters, your companion for starting and building a business. I'm Shuang Esther Shan. When you're moving to a new home, sometimes the hardest part is getting the couch through the door. That's the problem Rob Bridgman was trying to solve when he founded Snug, the UK-based sofa-in-a-box company. That's right, Snug's modular sofas are designed to fit into any house or apartment, and they're much easier to maneuver and ship than traditional couches.

0:48Rob is joining us today to share how he disrupted the furniture industry and scaled Snug to an eight-figure business. Rob, thanks so much for being here. Great to be on. Thanks for the invite. So I love the start and the story behind Snug. You were actually in a position where you had to move. And one of the toughest things about moving is getting the couch through the door. Even though you had a lot of experience in the industry, you realized there was something missing. Tell us about that light bulb moment. Yeah, absolutely. So I feel like it's a tale as old as time. I had just bought a new house in London.

1:28And as you may know, London is quite short on space. So I had just got the new keys to my new home. And I was all excited to move in and got into the new house and needed to buy some new sofas. And it came unfurnished. So I started looking around and very quickly realized I was going to have to wait months to find somewhere to sit, which is a bit embarrassing because I actually came from the furniture industry, not selling sofas, but more outdoor furniture. I very quickly realized I was going to have to wait months and accepted that fate and went to a company that had a great reputation and a sofa that I really liked.

2:10I ordered. It was supposed to turn up in six weeks, around about the six-week mark, I kept calling them, and it eventually showed up after nine weeks. So we tried to get it into this little apartment on a Saturday afternoon. And after about an hour of trying, we just realized it just wasn't going to fit. So we had to give up. And I called up the company and I explained the situation. And much to my surprise, they didn't accept returns. So there I was, nine weeks worse off, and spent thousands of pounds on a sofa that I couldn't sit on and I couldn't even get a refund for. So I guess that was my light bulb moment.

2:50So from that moment, you decide you wanted to make your own couch, one that is modular and have the ability to fit into any space. How did you go about trying to create this couch? It's a great question. It just so happened that a couple of my colleagues at the time were moving house the same time as I was. And we basically got into the office and listed out all of the things wrong with the customer journey and the product when buying a sofa. And we listed out about eight different issues that we'd had. And we set about to fix as many of them as we could. And my background is actually in the furniture industry.

3:30So I was third generation in the industry and I joined my father's business. So my background is in furniture design and marketing and e-commerce. So I knew that there had to be a better way. Yeah, I guess essentially what we did is look to disrupt and challenge the incumbent market. So there was the status quo, the way that it always has been done. We knew that there had to be a better way to do it. So we set about to really challenge that. I would say a key part of what sets Snug apart is that traditional furniture companies in the UK have really long lead times. So you're waiting two or three months.

4:07And the reason for that is actually they're made toward a business model. So as a consumer, you give your money, you wait patiently two or three months, and then it turns up and hopefully it fits and you like it. Whereas my vision for Snug was to deliver next day. And obviously, in order to do that, we had to hold stock of products. It sounds simple enough when I say it now, but at the time, that wasn't how the industry worked. furniture manufacturers weren't used to working in this way, nor were warehousing businesses or logistics businesses. So actually, when starting it, not only did we have to show customers that there was a better way, but we also had to take the manufacturers and the logistics providers along for the ride as well.

4:55Yeah, we found it really challenging. Actually, we came up with the product, we designed and engineered it in a way that we felt that it was different and better than anything that was out there. But when we started speaking to manufacturers, we found that either we were too small or they were too small or they were too big or they were too busy. And we spoke to over a dozen manufacturers and we just didn't get anywhere. And it just so happened, we bumped into an old contact when we were at a conference in Germany. He had been running a factory and we just briefly told him about the challenges we were having.

5:34And within weeks of that meeting, we had our prototype, we had our first product. Ever since then, the idea to the launch just went exceptionally quickly. And overall, I'd say the whole process from idea to launch was probably about a year. Listening to that anecdote, I can understand why manufacturers weren't enthusiastic about holding inventory because furniture is large, these couches are huge to store. So that made sense. What I didn't understand is why did you have pushback initially and why weren't existing couch makers making modular designs? Because that I think would make sense. Yeah.

6:14So we don't understand the point about them not wanting to make for us. Actually, we were the ones that were looking to buy the product up front and to warehouse it ourselves. So it worked in a very similar way to bulk orders of products. And I guess they were more used to working on ad hoc, kind of one in this color and this style and another in this color and this style. And we came along and we wanted 100 in that color and style and 100 in that color and style. But the thing that's really different from a product point of view is that I think the best analogy to use would be our products a bit like Lego.

6:53So you've got components and the mix of components make up a finished product. So talking, I guess, e-commerce language for a second, it's that kind of parent and child SKUs. So we've got lots of different child SKUs, currently about 200, but they make up about 1400 parent SKUs on our website. So we can mix and match or customers can mix and match. We can essentially keep our SKU range relatively narrow, but actually have quite a lot of choice for customers because they can mix and match lots of different sizes and colors and styles to get just what they want. It was a difference in the way that they had to work.

7:43It wasn't they weren't making up finished products. They were actually making up components for the customer to make up the finished product. So you have that serendipitous meeting with the manufacturer in Germany that eventually becomes your partner. And new consumers who are into this direct-to-consumer world, they can understand the concept and they'll love the concept. On the other side is that most people do like to try out a couch and sit on it and feel how it would be tactically. So how did you tackle selling these sofas online? It's a great question. And I guess the biggest pro of a direct-to-consumer route is that cutting out the middleman.

8:27So essentially we're able to pass on those prices and all those those savings direct customers and we're not having to go through a wholesaler or a reseller in order to get the product to a customer's home so it is the leanest model there is from direct from essentially from factory to people's homes so my family's background is in the furniture industry so since the early 1940s and then with my father's business started in the late 1970s, we've seen each different part of that supply chain. So we were manufacturers, then we were wholesalers, and now predominantly we are retailers. Through those decades and those generations, we've understood how to build value into each part of that supply chain and also to make it as efficient as possible.

9:24When we launched, we were primarily e-commerce, which is really difficult for a furniture company, but we were able to overcome that with various things that we introduced. So we were the first sofa company to offer a 100-day trial. Prior to that, the maximum you'd get was maybe 14 or 30 days. But actually more likely there was no trial at all because it was made bespoke for you. So we could overcome that barrier, but we also really invested heavily in content. We just made it as easy as possible for customers to buy from us. And we also had a very short delivery time as well. So from my experience, waiting for nine weeks and then it turning up and me not liking it, that was really poor.

10:19But actually, there's a much lower barrier to purchase if you know you're going to be getting it in a few days. So with our products, you buy it, it turns up three days later. For whatever reason, you don't like it. It's not the right size, color. Your partner doesn't like it. Then we come and collect it and we refund the money in full. So it really made that whole customer journey that much easier, which gave consumers confidence to buy online without seeing the product. So you have this promise of having short lead times and delivering within the week and you manage the fulfillment side and you have the inventory.

10:59How did you go about figuring out the shipping and logistics side to make sure that part also ran smoothly? To answer that, I need to probably answer it as maybe three chapters. So the first chapter was pre-COVID leading into, yeah, probably the middle of the sort of the COVID period. So we had one manufacturer who was offshore, who had scaled with us essentially from about zero to probably 20 million pounds in revenue in about two years. And we were really happy with the quality. We were happy with the ability to keep up while we were scaling. We were happy with the value for money. And then all of a sudden, shipping prices went through the roof.

11:53So overnight, shipping prices pretty much went up about 700%. So from about$2 ,000 per container to about$16 ,000 per container, which essentially doubled the cost of our prices we were buying from the factory so that became a huge challenge for us and at that time we were exploring whether to a dual manufacturer in the UK or in Europe but that really sped up that process because ultimately we couldn't afford to be buying at those prices and we couldn't pass those price increases onto our customers so it really sped up our nearshoring and onshoring of our product. So I guess that kind of leads on to chapter two.

12:41Through the second half of COVID, we had dual supplies. So we had offshore manufacturers and then we had onshore manufacturers in the UK. And that worked for a period of time until it didn't and actually the uk manufacturer started to have shortages in materials and labor and then there was the energy crisis and you know we thought that that strategy would really allow us to be more agile so by having a dual supply we should be able to work with the manufacturer that gives us the best sort of value for money and the best service but in actual fact there was lots of challenges even when we brought it to the UK.

13:26So then finally on chapter three, we brought a European manufacturer on board. So this is one that's based on mainland Europe. And essentially now we have three manufacturers. So I guess if I could go back in time three or four years, what I would have told myself to do is to diversify our supply chain a lot sooner. And even if there's not a reason to do it, because it's all great and there's a good relationship, good product, good price, there's likely something that's going to come up that you're going to wish that you diversified that sooner. And a huge challenge. I think that supply chains are only now just settling back down post-COVID.

14:12I think that's very practical advice about diversifying your supply chain. And it sounds like logistics is something that you're consistently trying to improve and enhance. The other side of your business that you're constantly figuring out is also the finances. You start at snug with just£30 ,000. And it was a very long time before you actually sold your first couch. So tell us how that process was like. I bet it was very nerve wracking to invest into this new business and waiting for the first customer to take a bet on Snug. Absolutely. It took 18 days from when we launched to get our first customer to start the business.

14:54We, as you say, invested 30 ,000 pounds seed capital. That was between me and my father who started the business. And we split that three ways. So we built a website. We put a bit of money towards marketing. and then the rest of it we invested in stock. So for launch we had 100 sofas in the warehouse and in month one we sold just one. So we had about eight years of stock. In month two we sold an additional two sofas and in month three we sold another four. So from a very low base we were doubling sales every month. But even after three months, we'd only sold seven sofas. So actually, we still had about a year's worth of stock sat in the warehouse.

15:44And it's funny, my father was reminding me almost daily that we had years of stock. And I just said, look, we need to be patient. We're doing this in a very lean and scrappy way. We're not really spending anything on marketing. We're just really relying on word of mouth, which, you know, such an infant time in our business and when we didn't really have customers, that was going to take a while. But then we stumbled upon the power of influencer marketing and social media marketing. When we launched in 2019, there wasn't really anyone selling on social very well. So the thought was that you can't really build a community around sofas or around furniture because people only buy them every four, five, six years.

16:37So who'd want to go and follow a furniture company on social media? It's not very cool or sexy. But kudos to my wife, Lauren, who joined Snug in year one. And her background was in social media marketing for beauty brands and fashion brands and luxury brands. And she'd seen it work in these other industries. And she helped us figure out how we could not only build a community, but how we can leverage that community to get the word out and ultimately to sell more sofas. Very excited to dig into more of your marketing strategies and also talk about your entrance into retail. I'm chatting with Rob Bridgman, founder and CEO of Snug.

17:21I hope you're enjoying our conversation. And if you haven't already, please subscribe or follow Shopify Masters wherever you get your podcasts and leave us review or feedback for the show. Thanks. So Snug started in 2019 and then the next year the pandemic hit. So it was a good thing that you were investing in social media and selling online really early. But during COVID, you also found success with live streams. Tell us more about that. Absolutely. So at the time, we had a very successful e-commerce presence. We were selling a lot of sofas online, but we also had a presence in seven concessions and one of our own pop-ups as well.

18:05So we did have a relatively small retail presence of eight stores. It was when the pandemic hit and there was all the lockdowns and we had to send all of our retail staff home. And obviously, they can't work from home because they're normally on the shop floor. But actually around about that same time, we had just started a trial of video shopping on our website. We had some success with chat, but customers wanted to see it and really speak to someone face-to-face and build up that rapport and that trust in order to spend thousands of pounds over the phone or on the internet. So it was actually serendipitous.

18:55We had the stores closed down and some of our best salespeople were stuck at home. And then we had all of this demand for people that really wanted to see the product and speak to an expert and essentially we just connected the two so we redeployed all of our retail staff onto video chat.

19:21On our website we had one-to-one video chat but I guess for me and maybe the listeners the more exciting part was around the one-to-many video chat. It was around about the time where social commerce was becoming a thing. So this was using social media and really blurring the lines between content, community and commerce, you know, getting people to buy on social. We looked to China and some of the stats coming out there and how they'd used video to really sell products in significant volume. There was someone called the Lipstick King who sold tens of billions on Singles Day. I can't remember the exact stats now, but really, really impressive.

20:12So we just thought, well, can we emulate something like that? Can we create a live video stream that is entertaining and engaging so that people want to watch, but actually has a underlying commercial message to it. And actually, we launched a few of them in the short space of probably six months. And I think the most impressive one was we worked with a Canadian comedian called Catherine Ryan, who's brilliant, a lovely person too. And we hosted a 40-minute game show on Instagram. And we advertised it on our socials and on our website. And we virtually filled Wembley Arena. It's one of the biggest stadiums in the UK for live concerts and events.

21:06And essentially, we had over 30 ,000 people simultaneously watching this event with Catherine Ryan. And there was five segments. And essentially, she was giving away snug sofas. and then at the end of it there was a hook and it was about going to our website and entering a code and the fastest person to enter the code won this big prize so we had a record traffic day we had a record sales day record sales week record sales month and it was just incredible it was really the best example i've still come across of leveraging that the power of social media with great content and talent, but to drive real commercial results.

21:54And we had a bit of a pause last year on social commerce and live streams, but really excited to get back into that this year. I love it. It's such a great way of you transitioning staff during a very difficult time and then also finding this new area where your customers were showing up online. I think a lot of our listeners might wonder, how do you actually generate hype for a live stream and actually have 30 ,000 people wanting to queue in and watch? So what were some initial pre-launch strategies you had to ensure that people will show up to the live stream? That's a great question. We found that talent was a huge part of it.

22:39talent that has their own audience that would go and see them in a show or would watch them on TV. It was another medium for them to interact with their people that they follow and that they enjoy. And I think that's one thing where social has an advantage over TV is that you can interact with these people. So during this 45 minute stream, we had over 40 ,000 comments from the people on the call. And obviously you can't respond to all of them, but there was a good dozen or so people that interacted with Catherine Ryan on the live stream. So I think that's one part of it. We were also able to build hype through our CRM database.

23:29So we built a list of hundreds of thousands of engaged people who want to hear from us. And we made sure to do the events in the evenings out of hours when they're at home. And we even did one on a Sunday evening as well, which had its challenges, but I think it really did benefit the amount of people that could attend. And then I think probably the final tactic that would be worth mentioning was about the element of surprise. So we ran ads on social platforms to say that, you know, something big's coming and to really build that anticipation and to have a lead capture form. So actually, I'd say more often than not, people didn't know what they were signing up for, but they also got to know our brand and our cheekiness and the fun that we had for marketing.

24:18So I think people had the confidence to leave their email address knowing that we weren't going to just spam them and not deliver on something that was entertaining or pushing the boundaries a bit. So yeah, we get to have a lot of fun with our audience and our brand, our kind of irreverent, cheeky brand really affords us that opportunity to just be really creative and just keep pushing those boundaries. Amazing. And I love how bold Snug has been on its promise of fitting through every door and every small space. So talk to us about that promise that if Snug couldn't fit into someone's home, that they would essentially get a free sofa.

25:04Absolutely. Yes. So we had a phrase very early on is breaking boundaries, not door frames. What we really wanted to do is stand behind our brand promises. I think, you know, it's easy for a brand to say that they do something and do they live up to the hype all ways?

25:26I wouldn't say so. It was actually, I think it came about from those pizza adverts. It was, yeah, delivered in 30 minutes or it's free. So we thought, well, can we do something like that? And we actually started that campaign with a PR stunt. And it was to get a sofa into the smallest house in Great Britain. so there's this home in Wales in the UK that had been in the same family for 400 years and they've never had a piece of furniture never had a sofa in their home so we set ourselves the challenge and we filmed it and we thought if it doesn't work it's going to be great content anyway but yeah we filmed ourselves trying to get a snug sofa into the smallest house in Great Britain and yeah fortunately it did fit and you know since then we've said that it's you know guaranteed to fit anywhere and had some amazing press coverage as a result of that but then we thought well how can we take it one step further then it was about well let's take the challenge to our community we went onto social media to our pages and we said do you think you have a space that will not fit a sofa and as long as you can practically put the sofa down then we're all guaranteed to fit something through the door or up the stairs whatever the awkward space and we had hundreds of people apply and they sent in the photos of their space and the awkward doors or the basement they were in or you know we had people sending in narrow boats and attics and all sorts and we chose three.

27:05We went on location. If we can't fit it in, we'll give you a thousand pounds. If we can fit it in, you buy it 50 % off. Now I'm very pleased to say that all three got the sofas in and we acquired three new customers that day as well. There was no place you were super nervous about fitting a snug couch in, was there? I'm probably going to eat my words after this podcast goes out, but I'm yet to hear of somewhere where a snug sofa doesn't fit. Spiral staircases, narrow boats, basements, yet to hear somewhere it doesn't fit. Sounds like that bold promise has really helped in building community. And it's also such a fun way to launch a campaign.

27:48And in addition to the success from live streams, what other channels or new areas that you're experimenting with in the world of marketing? Yeah. So as a cheeky, irreverent brand, as I say, we've got permission to be quite bold with our marketing. So we like to go where our customers are first and foremost. So the channels that we've really prioritized are PR, social media, but then increasingly we've got an appetite to go into the real world as well. So this is events, whether that's with influencers or with journalists or with our customers. And we're also really looking at how we can get more of our products closer to people's homes so they can go and see it.

28:41So that's really going to take the format of retail and local advertising. It's a bit more traditional than what we used to, But I think it's a really important part of our go forward strategy as omni-channel retailers to not only be able to reach millions of people online, but actually when someone's really serious, but they want to see it for comfort or for size or for color, that we have that retail store near them. so yeah i would say they're the key sort of areas but we are always looking for new channels so we are particularly interested in emerging channels like tiktok and it's interesting just having to almost tear up the rule but once again for our social media strategy because what works on And some platforms absolutely don't work on others.

29:42And that really keeps us on our toes. But it also enables us to keep experimenting and learning and doubling down on those areas that really work. With all of these marketing strategies, it really paid off and Snug has grown significantly. You've also recently gone through an acquisition. What are some points during the scaling that taught you a lot and you really realized there were points of pivots for the business? So many lessons and it's only been maybe four years since we launched. So we were the first mover in our category. So when we launched, we created the Sofa in a Box category. And I guess I gave myself a lot of pressure to keep growing that top line as quick as we possibly could.

30:32But as we were bootstrapped, it was really important for us to ensure that that bottom line was there as well. So we were always profitable from the first sale. And I guess I was very conscious of our unit economics and ensuring that we weren't only growing top line very quickly, but that we sort of had good cash flow and good profitability. But there was a whole series of quote unquote, once in a lifetime events that happened from obviously COVID to the shipping crisis. Then there was the economic downturn in the UK that really drove consumer confidence down and ultimately made things really tough.