Inside This Furniture Brand’s Unique Approach to Sustainability

0:00People really do want to support sustainable brands, want to buy products that are sustainable, and those companies are growing faster than their counterparts. Hey, I'm Shuang Esther Shan, and this is Shopify Masters, your companion for starting and building a business. Conscious consumerism is on the rise. Many customers want their dollars to have an impact and are willing to pay more to support the brands doing good. Founder Pentila Paterapasit saw the success of clean beauty, sustainable clothing brands, and thought, why not furniture? So she started an eco-friendly furniture company, Sabai Design.

0:40It makes sofas and armchairs with sustainable materials and uses U.S. factories to cut down on carbon emissions. We are so excited to have Pentilla join us during Earth Month to talk about why focusing on sustainability is a successful way to do business for Sabai Design. Thank you so much for being here, Pantilla. Thank you for having me. Very happy to have you here, Pantilla. I've been looking forward to hearing more about your business journey. I would love to start by getting a sense of what sustainability means to you in terms of the furniture industry. Yeah, well, I would say sustainability is known as such a vague term.

1:22I think there's a lot of frustration that's even grown around the term and its use by people, companies, brands, etc. Because a person or a company can impact the environment, our planet in so many different ways. And so for us at Sabai, I would say sustainability means looking at the entire picture. And so whether it's addressing the amount of waste that the furniture industry creates, over 12 million tons of furniture waste is created every year just in the US, and 80 % of that goes to landfills, or addressing the actual materials that go into furniture products, whether that's sustainable materials, non-toxic materials.

2:02And then it's also looking at the longevity of our products as well. And so, so many different parts of our business can be sustainable, whether that's the products, the creation of them, the shipping of them, the end of life or life extension considerations. So I would say for us at Sabay, it's really looking at all of those different things across the board and trying to make an impact or reduce our impact. Yeah, sounds like it's multifaceted. When you started Sabai, you did have this hypothesis that consumers wanted a more sustainable and affordable option when they're looking for furniture.

2:38So how did you go about trying to prove this concept? When we first started off, we ourselves are part of a demographic that is very aware of our impact on the planet. The climate crisis is such a top of mind issue for us. And so being part of a demographic that's younger, and so we're also on a budget, we wanted to create a solution that spoke to those values, but then also took into account accessibility and budget as well. And so it has been a balancing act throughout the entirety of our company's life and will continue to be in terms of how do we provide solutions that are taking in town our impact, but also are meeting our community, our customers, where they are in terms of what they can afford.

3:23And so we've tried to find solutions that speak to that, whether it's through finding efficiencies in the manufacturing process, the supply chain, the shipping, so that we can provide high quality products that are going to last a long time. And so there's no magic answer to how we achieve that. It's just a constant balance in terms of every decision we make and how to optimize for both of those things. And I think especially with the landscape of furniture brands, a lot of the times it's easy to turn to online retailers, IKEA, bigger players that's more convenient. How did you have this proof point that consumers are going to go out of that habit and actually turn to your team?

4:06Yeah, I would say it was a combination of proving out our hypothesis that this is something that people would actually pay for. And also a bit of a leap of faith and coming from the fact that we ourselves are willing to pay a premium for sustainable products. And I think that has been proven out to some extent. Studies show that our generation, younger generations are willing to pay more of a premium for these products that align with their values. I think in the beginning, the way that we tried to have some confidence in that was doing a lot of customer research. We did a lot of interviews with people to understand their purchasing behavior, what they took into account.

4:45We ran fake ads to understand whether sustainability messaging did resonate with customers to, you know, have that support for our theory. At the end of the day, it is somewhat of a leap of faith. You're never going to have a sure answer. But I think that not just within the furniture industry, but across all consumer products that has been proven out, I think, in the last five to 10 years that people really do want to support sustainable brands, want to buy products that are sustainable. And those companies are growing faster than their counterparts. So you had interviews, you had these conversations, and you're also testing the hypothesis through some of these sample ads.

5:25and of course you mentioned there's so many aspects of the business that can be more sustainable what did you tackle first in the early days to start meeting some of those sustainability goals yeah I would say what we started with in the beginning was the actual product and how we're making that product and so the supply chain the manufacturing process and the shipping and so we knew that life extension and end of life were things that were very important to us. That's something that we actually launched two years after we launched as a company. And so wanted to provide those solutions once our products were actually in people's hands.

6:04And so in the beginning, we started with the product design and the supply chain and the manufacturing. And so we went out and researched different materials that we could bring into or use to create our products, whether it's recycled, upcycled, non-toxic, natural materials. We also focused on really creating a domestic supply chain, which actually really worked out for us because we launched in July of 2019. So basically right before COVID. And, you know, when all the supply chain disruptions happened during COVID, we were actually very much insulated from that because our supply chain was so localized that we weren't experiencing those massive delays.

6:40And we were working with domestic manufacturers that could continue to ship straight from their facilities to our customers. And so actually reaped a lot of the benefits from that. And in addition to that, it's really important to think about sustainability starting from the design phase itself. Because if you aren't thinking about that in the beginning, it's really hard to address problems that come up retroactively or down the line, whether that's buying carbon offsets as a company or trying to change things in your products. That's really hard to do once those things are already out into the world.

7:14And not to say that we're stagnant, we're constantly innovating, we're constantly tweaking our products, improving them, but making the decisions from the onset with those things in mind is really helpful and important. And so for example, designing our products. So even though we knew that we wanted to come out with a repair program where we sold component parts to our products. Even though we weren't launching with that, we were designing our products with that in mind. And so all of our products are designed to be flat packed, but not look flat packed because, you know, a lot of the time these sofas out of a box can look like they're coming out of a box.

7:47And we definitely didn't want that to be the case, but we were designing them so that they could be assembled. We were still testing them so that they were durable and could withstand use and weren't flimsy, but because they're designed in components, that's actually compatible with our repair program down the line. So down the line, you could buy an arm from us if your dog rips up the arm of your sofa. You could buy new pillow covers, things like that. And so designing with all those things in mind, even though we weren't going to launch them for another two years. So it sounds like you're really thinking about the lifespan of the product and also how consumers will use it.

8:24And it's putting that design thinking guideline into the initial process that leads to how the business model is structured as well? Yeah, definitely. I would say that we thought very carefully about our business model as well as the product design. I think as a company that really is trying to limit our own impact on the environment, the industry's impact on the environment, and also create a business that is sustainable in a business sense, we thought very hard about how to merge those two concepts. and because consumerism over consumption does have such a large impact on the environment. And so the solution that we came up with was designing our products so that they could address the desire for change and newness while minimizing the amount of new things that are actually being created and continuing to engage our customers, provide value to them, provide new products to them.

9:22And so through our Repair Don't Replace program, we sell component parts to our customers. And so you can actually buy a new arm from us and extend the life of that product instead of having to get it reupholstered because that is a really expensive process that not many people just are willing to go through. And it's also quite cumbersome. And so through that program, you can extend the life of that product. We also have a line of slipcovers that we sell so that if you wanted to change the look of your apartment, of your sofa, you can buy just a new slipcover instead of a whole new piece. And so it's more economical for the customer, it's producing less waste, and it is, you know, another purchase and another revenue driver for us as well.

10:02And it sounds like the foundation of it all is finding a domestic manufacturer to make sure that they're willing to be flexible and actually help you in the production process. So talk to us about how you did end up finding this production partner and what were you looking for at that time? Yeah, like you said, it was and is very key to our business model to have domestic manufacturing partners that are really willing to work with us with this new type of model because a made-to-order model is very important with the business model that we do have. You know, having all of these, an arm, a slip cover, all these component things just do work better in a made-to-order model so that we're not stocking all these different components because you never know what someone might need.

10:49So in terms of going about finding a manufacturer, that was definitely a very difficult endeavor and a process that took a while because we were asking manufacturers to produce something that was relatively affordable because we wanted to remain accessible. We wanted to have a made-to-order model. We wanted them to use materials that were different from what they were using or what they were stocking. We had no historical sales, no current purchase orders because we were going to be launching the company on a made-to-order basis. And so, you know, those sales weren't guaranteed. And so there were a lot of different asks that we had for our manufacturing partner and got a lot of no's.

11:28And I think we went into the industry with no prior connections, no experience. And so it was a very much a cold outreach process. And I think we were just very persistent. And if someone said no, would ask for a referral, just went about that whole process quite both methodically but also kind of spraying and praying at the same time because you're just increasing your chances when you do that and eventually found a manufacturer that was also very young minority owned based in North Carolina and just was very willing to do something new with us because they themselves were new and they believed in our vision what we were going for and have grown and we still work with them to this day and they've grown with us from a, you know, in a much smaller space to a larger manufacturing facility now.

12:15Very synchronistic that you found this partner. And we'll love to chat about also the fact that if someone made a purchase and they actually would like to make a return, there's a buyback program as well. How did you build that into the business model? Yeah. So thinking about the amount of waste the furniture industry generates, we wanted to make sure that we were really minimizing any opportunity for Savai products to end up in a landfill. And so thinking about how to do that, yes, it's the repairability, but then it's also the resale as well. Whether it's if someone has a sofa for a few years and is moving or needs to get rid of it for whatever reason, finding or providing a solution for them, they obviously could try to resell that product on their own.

13:00But if they didn't, having a fallback option for them where we actually take that product back, facilitate a resale and they'll get a commission on that resale. So very similar to, you know, secondhand marketplaces that are out there, but owned by Sabai and our platform obviously only includes Sabai products. In addition to that, we also leverage that platform and that channel for our return products as well. We do have a pretty low return rate, but for any products that are returned, they go through that process. I think that, you know, when a lot of these larger mattress and furniture companies were popping up, there was a lot of backlash with respect to how much waste they were generating because if someone wanted to return a product, they would just tell them to throw it away because the reverse logistics are just so expensive.

13:46And so we wanted to make sure that we weren't contributing to that. And so having this resale channel in place really helps us. We sell products through both a third-party provider that has localized facilities where those products can go back to and then get resold. And then we also do test out reselling on our own to try to minimize that freight impact even further. What I've been excited and encouraged by is the fact that our customers are very understanding and open to this. And so we call it our open box program, where if we have a return, the customer doesn't like the color, doesn't like the design in person, whatever it is, it doesn't match what they're looking for.

14:24We actually send out an email to our own customer base seeing if they'd like to buy this discounted product. And so it can go directly from one customer to the next. And so we'll send them new boxes, they'll pack it up and ship it directly to that customer so that we're really minimizing the amount of transportation that's going on with these return or resale products. And I think it is really exciting to see that people understand that. And even though I think traditionally that might be a kind of a weird concept that you're sending your product to directly to another customer, I think because our customer base really understands what we're trying to do in terms of sustainability, impact, all these different things, they actually really resonate with it and understand it.

15:05Very cool to hear how dedicated you and the team are being on that aspect. The other more complicated aspect I feel like is also pricing, where there is this tension between being sustainable and also being accessible and affordable. How did you approach the whole pricing philosophy as well? Yeah, the pricing is definitely the difficult part because there's so many things that we want to do. And even though we've found a way to offset some of the more expensive practices that come with being more sustainable or more thoughtful, there still are additional things that you can always do. And so in terms of how we've thought about our pricing is that we want to make sure that we remain accessible and that we're meeting people where they are, because I think the larger amount of people that we can speak to, the large amount of impact that we can have, even if we aren't perfect in some regards.

16:00And so I would say in terms of our product line, as we've grown, we've also grown our product line to speak to different subsets of customers. And so we have our essential line, which is our most affordable, and I would say kind of our entry point product. And then we launched two new lines just last year, actually last July, our Elevate and Evergreen collections, which I would say are slightly more substantial pieces. And then also as we innovate, as we try out new materials, we're continuing to incorporate those into our essential line as well. But these two lines, I would say, go even further.

16:32And so, for example, they incorporate the use of this rubberized coconut fiber underneath the upholstery of the actual frame itself. That is a pretty expensive material that we've incorporated to substitute synthetic material where we can. It's very durable. It's all natural. It's non-toxic. And so those lines, I would say, are about$1 ,000 more expensive than our essential line. And so basically providing products that span a range in terms of price point so that people can shop where they're able to shop essentially. And we can speak to different customers that way. Well, we are definitely going to dig into the Elevate and Evergreen lines even further.

17:18But first, I would like to take a moment to thank you for tuning into the show. If you haven't already, make sure to subscribe to Shopify Masters and leave us a review with feedback for the show. Thank you so much. so last year you created two new collections elevate and evergreen talk us through the process of creating new customer profiles or some of the thought process you went through when designing these collections definitely i think that within furniture it's fun because there are so many different aesthetics and our core as a company is centered around sustainability and we recognize that there are a lot of different types of people who care about their impact and they have different aesthetics and we wanted to be able to speak to those customers across that aesthetic plane as well and not just being about price point and so Elevate and Evergreen both diverge a little bit in their aesthetics I would say Elevate is a little bit more this contemporary modern farmhouse aesthetic, whereas evergreen is a little bit more traditional coastal grandma, if you will.

18:34And so from an aesthetic standpoint, we wanted to be able to speak to different customers as well. They're also slightly more substantial for people who we recognize might have bigger homes and space within those homes. And so the essential collection is much more of, I'd say, an apartment sofa. And the Evergreen and the Elevate are larger pieces that require a little bit more space. Yeah. Speaking to those different customer profiles, I feel like it's also a perfect way for you to also work with content creators and different influencers who either fit those profiles or have the aesthetic within their home.

19:16So talk to us about finding creators that you were partnering with as well. Yeah, that's actually a great point that we noticed as well. And it was intentional. It wasn't something that we just noticed happened. But I think that we wanted to bring in tastemakers within those different aesthetic buckets as well. And while the essential line is a much more simple, mid-century leaning design, it's not so design forward, it's not taking as many risks or making as much of a design statement. And so with these two new collections, I think it's been really exciting to see the pickup in creator collaborations, influencer collaborations, because people are really excited by the design as well.

19:58And so I think that was an exciting progression in terms of having this basic line, this basic collection that we came out with, and then two that were a little bit more design forward that show our personality a little bit more. And I think a lot of the times when you're looking at different launches, new lines, you really want to measure the impact you have on the business. Can you talk to us about how it's changed the business for Sabai as well? Yeah, I would say one of the areas of impact has definitely been on the creative side, bringing in more creators that are excited to collaborate with us because the products have more of a design forward perspective.

20:38The other side is widening our customer base and who we're speaking to. And so those collections speak to a larger demographic of people who might not just want one aesthetic. We saw a lot of success with the essential line, but definitely part of that, which was a very helpful process as well, was just getting customer feedback where people are saying, we love what you're doing. We love how committed you are to sustainability, the non-toxic angle, the domestic manufacturing, all these different things. But I want a sofa with a higher back. I want a sofa with a natural fabric. I want a sofa that has a sloped arm that you can lean on.

21:19And so taking into account all of that feedback over the last two, three years was actually a really valuable information gathering period where we then took all that learning and put those learnings into these two new collections. And so I think it really allowed us to speak to a larger demographic. The Essential is definitely still our hero product and where the bulk of our sales are. But being only less than eight months in, in terms of these two new collections, they're actually gaining a lot of steam in terms of the percentage that they're driving revenue as well. And I assume it's not just reaching new customers in different like segments of the market, but it's also bringing in customers who have perhaps a higher average order value as well.

22:04Yes. And so the essential collection, like I said, is about a thousand dollars lower in AOV than the Elevate and Evergreen collection. And so actually when we launched the new collection, it both widened our customer base. And then also once you do interact with a customer, you start telling them your story and maybe they're coming in at the essential price point and kind of are drawn in by that. But once they learn about all these different practices, why the Elevate is incorporating these different materials, it's actually also an opportunity to bring someone up to that higher price point as well.

22:41And so since we've launched the two new collections, We've seen our AOV grow by$200. Amazing to hear. And I think it's interesting, right, because the new lines are based on customer feedback. And by creating these new lines, we're also collecting new data points, which hopefully will tell you more things about customers' demands and also how to design that aligns with causes they care about and the design they love. Has there been any new learnings that you'll incorporate into future designs as well? Yeah, I would say the one piece of feedback that we got from a lot of customers was that they wanted a sleeper sofa.

23:20And so when we launched the Elevate collection, that was very important for me to incorporate that feedback and that demand. And I'd say that that has been really exciting to see that that has really translated in terms of people really prioritizing the Elevate collection and really resonating to the sleeper element of it. And so I'd say that's definitely something that we want to continue incorporating into the future is how do you create a product that has two different uses or is flexible in terms of its use. I think one thing that we at Subai noticed early on was this not wanting to look like it was out of a box.

23:56And so in a lot of our collections, the Elevate and the Essentials specifically, we utilize bench cushions, which is essentially a cushion that spans the whole length of the sofa rather than being individual cushions, which really helps to, A, it's very comfortable because when you're lying on it, it feels basically like a mattress. And then secondly, it makes it look very cohesive. It makes it look high end, even though it is assembled, it doesn't look like it's assembled. Beautiful. And I think at the core of it, you're doing something a lot of founders wish to do, which is create a shopping experience where there is a positive impact associated to it.

24:35What is your advice for founders who are also trying to build that similar experience that people can feel good about and they know that they are making a positive impact while they're shopping as well? I would say transparency is really key. I think communicating to your customer as much as possible about what you're doing, the choices that you're making to really help them understand why the product that they're buying is different. Because people do, I think, want to feel good about the purchases that they're making. They want to feel excited about it. They want to feel like they're supporting something that they care about.

25:14And so the more you're communicating that to them, the more excited they are, the more they're willing to actually pay for that product. I think we've actually gone through phases where we've had to increase our prices to support whether it's increased costs or incorporating more sustainable materials into our products. And so that is a business decision that we've made in terms of healthier margins, growing AOV, but also supporting more sustainable practices. And so it feels like if you're communicating that to your customers, you're all kind of on the same side in terms of, okay, we're all making this decision together to support these practices and to do this together.

25:54And we all agree it's worth it. And so I think by bringing them into that conversation, it makes people feel like they understand the decision making, they understand the price point, whatever it is, more. And it builds a stronger community, it builds loyalty, and helps create trust as well. Yeah, we look forward to all the new ways that Sabai Design will expand and grow. Thank you so much for being here, Pentilla. Thank you so much for having me. That's Pentila Paterapasit, the founder of Sabai Design. Our show is produced by Megan Quayle and Gogo Zoger. Our engineers are Miku Betlam and Matt Schwartz.

26:34Benjamin Gottlieb is our managing producer, and I'm your host, Shuang Esther Shan. Come hang out every Tuesday and Thursday for brand new episodes and share this episode with a fellow founder. We'll catch you next time on Shopify Masters.

26:54Thank you.