Neighbor, a new outdoor furniture manufacturer primarily selling online but now getting into the retail trade space, was started in 2020 by a team that was looking for an entrepreneurial challenge.
Previously, Chris Lee, Nick Arambula and Mike Fretto, co-founders of Neighbor, met when they were working for online mattress brand Tuft & Needle, which was eventually sold to bedding giant Serta Simmons.
Taking a solo plunge, the team used the skill sets they obtained from Tuft and set their eyes on the outdoor category, and since then have seen 11x growth.
Neighbor found the casual category attractive for a few reasons, according to Neighbor CEO Nick Arambula.
“First, we had been shipping big, bulky product to people’s front doors through Tuft & Needle and had been selling them a product that traditionally they were used to buying in a retail store,” he says.
Arambula also explains that the Neighbor team felt that the outdoor industry is fragmented and that it’s built in a “barbell format,” where there are a lot of low-cost, low-quality products at one end and super-high-end and expensive product at the other — without a middle ground.
‘We stepped into the market to bring some of those high-quality, high-design components downstream in price while taking notes on the shopping experience of the lower-quality brands, similar to how it’s been done on the indoor side,” he says.
At Tuft, he says, there was a general interest that the entire company had around product design, visual design, and then how you communicate that to an end-user. But the big difference with outdoor as opposed to mattresses is that mattresses are covered 99% of the time.
“We were really excited to be able to kind of take our step into the design space and make something that would be visible to people all the time,” he says. “Our hope was that it could become a kind of a statement piece or talking point for folks in an area of their home.”
When it came to design, Arambula says it was important that the product be modular so that it could grow with the customer’s needs. Many manufacturers call a set modular when it just has a few pieces, but he says Neighbor invested time in a now-patented leg system that makes the modular sets smoother.
“In most modular sets, you have two pieces that stand alone and are pushed right up next to each other with two feet touching — which we felt is an unrefined design,” he says. “And so we came up with this concept of a shared front and back leg system. If you look at one of our pieces of furniture from an outsider looking in, it looks like one contiguous piece of furniture.”
Arambula says the company takes inspiration from indoor styles and that outdoor furniture doesn’t have to look like outdoor furniture if you use the right fabrics and materials.
In terms of price point, he says the company is aiming to “democratize design” with high-end looks at more affordable prices.
“When we look for inspiration, we look at high-end brands and ask how we can do that but better,” Arambula says. “And then style-wise, we’re more modern yet transitional, but we realize it’s not something that is going to appeal to every person that’s out there.”
While the company started primarily online, it’s now venturing into the physical retail and design spaces and is in talks to start selling to casual specialty retailers on the wholesale side.
On Jan. 1, Neighbor increased its trade discount by 5% for a total of 20% off the retail MSRP to the trade. Any designer that is part of their trade program and spends with them in Q4 will get a direct gift card for 10% of all they spent in the first three quarters of the year.
“We’re starting to build what I would say are more specific flows directed at the trade via email,” Arumbula explains. “We’re communicating directly with them, giving them earlier looks at the new stuff that we’re coming out with, in some sense, as a benefit to them, but also as a benefit to us to get feedback from what they think about what we’re starting to do. We’re a small team, but we did just sign on our first independent rep for the Southwest region in an aim to get more exposure to larger design houses and furniture dealers.”
