The Disruptors: Pivot brings subscriptions to furniture

The founders of the Saskatoon startup believe there's a market for rental furniture waiting to be tapped.

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By fueling the rise of subscription e-commerce, once-small startups like the Dollar Shave Club (now owned by Unilever), meal kit company Chefs Plate and music streaming service Spotify have redefined the way consumers  especially young urbanites  spend on everything from razors to snacks, clothing and music.

Now a new Canadian startup hopes to bring that subscription model to the world of online furniture, enabling customers to rent couches, coffee tables and desk chairs on a monthly basis  and return them once they are no longer needed.

Saskatoon-based Pivot Furniture launched in September and now counts around 100 employees across operations and manufacturing. It operates in its hometown and in Winnipeg and is eyeing further Canadian expansion but won’t disclose its target cities. The private company is also mum on its current number of subscribers and revenue and has yet to invest in marketing, choosing instead to finesse the model while slowly building an audience through traditional PR and media tactics.

But co-founders Rob Marsh, Daniel Simair, Joshua Simair and Brendon Sled are convinced consumers will learn of the company and see the value in their proposition. And they have reason to be confident: everyday furniture rental is a growing segment. U.S.-based Feather and Fernish are DTC brands currently offer a similar offering to Pivot. Earlier this year, Rent the Runway partnered with West Elm on home decor rentals, and IKEA recently announced it plans to test rentals in 30 countries worldwide.

The founders once found themselves in a similar position when they launched SkipTheDishes, an online food ordering app that was eventually acquired by Just Eat for $200 million in 2016.

“With Skip we were trying to create value for the consumer by giving them more time to give them what they needed,” says Rob Marsh, one of the company co-founders. “With Pivot, we’re trying to create value. We realized that a lot of people don’t have the cash on hand for a big furniture purchase… So we came up with the idea of a subscription service.”

Pivot’s strategy rests in addressing the heavy up-front costs of furnishing a space, be it a single room or an entire dwelling. (Co-founder Daniel Simair has noted elsewhere that furnishing a one-bedroom with Pivot roughly costs $60 per month in rentals, plus a $9.99 monthly membership fee that the company charges all subscribers).

But Marsh says the brand is demonstrating benefits that go beyond cost: there is also less of an environmental impact, with fewer pieces being purchased and later discarded, as items can be swapped out and circulated among Pivot’s other customers. After all, Marsh says “buyer’s remorse”  when they discover that their new purchase does not fit physically or aesthetically within their homes  is common among furniture shoppers, both online and in-store.

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“Everyone needs a place to live, everyone wants quality furniture  [but] you can’t afford quality furniture the majority of the time,” Marsh says. “We’re trying to unlock that value by creating a reusable one and higher quality furniture that’s accessible to the majority of the population.”

Jim Danahy, a retail analyst and CEO of CustomerLAB, says the company’s model may fit a narrow niche, such as mobile executives, young shoppers who haven’t settled yet, and people who “want to change decor as often as outfits,” but suggests its current product selection may be too narrow for a viable test.

Pivot currently has around 120 items available for rent on its website, as well as additional room-specific collections. Marsh declined to say whether it plans to grow the assortment or focus instead on building a more curated selection. “Currently, we’re just trying to find the most sustainable way of making these [products] and make them long-standing.”

As it looks to scale, Pivot currently finds itself in markets that are admittedly more “laid-back” and less prone to having a high volume or short-term renters. “We’re trying to validate it here, in a smaller market, where [there's] potentially [less demand],” Marsh says. “And then we can scale that out by moving into other markets.”

This story is part of a series for Strategy C-Suite, taking a look at Canada’s emerging business models and brands that are tapping into a new whitespace in the market. Sign-up here to receive the latest stories.