Furniture retailer American Freight had an eventful few years, said Peter Corsa, CEO of parent company Franchise Group’s home segment. In February 2020, Franchise Group acquired Sears Outlet Group and merged the brands together under the American Freight name.
Four years and one pandemic later, the leadership team shared plans for 2024 with Digital Commerce 360.
American Freight ranks No. 239 in the Digital Commerce 360 Top 1000. The Top 1000 is a ranking of North America’s leading retailers by online sales
American Freight’s overdue rebrand
Some furniture retailers were early winners during the pandemic, as consumers spent to improve their homes while stuck inside. Overbuying in 2020 and 2021 led to declines in home goods sales in the following years. Now, the market is finally rightsizing and American Freight can carry out its rebrand in earnest, Corsa said.
“We’re now taking a step back and saying this brand needs a bit of a refresh, with a better identity, a better tone,” chief marketing officer Lauri Joffe said. “We’ve refreshed our color palette, brand standards, and we are bringing that to life now in all of our marketing.”
Part of that rebranding process also means growing the store footprint, Corsa said. American Freight has just under 400 stores today. Based on market studies, the retailer has runway to grow up to 1,000 locations eventually, Corsa says.
Finding the right mix of products to stock American Freight’s stores is key, too, said Alissa Ahlman, chief merchandising officer. When factories were shut down and shipping container costs were at their peak, keeping the right inventory in stock was a challenge.
“Stores got filled with some product that wasn’t necessarily always in our wheelhouse,” Ahlman said.
“We spent a lot of time last year getting the right product in place, getting that product liquidated, making sure that we cleaned up our inventory,” she said. Now, she finally feels confident that the retailer has the right product mix.
Investing in technology
American Freight has technology investments planned throughout the year and beyond to enable that growth. Top priorities for this year include implementing a new enterprise resource planning (ERP) software and reconsidering the product allocation system, Corsa said.
Of course, artificial intelligence (AI) is also in the discussion.
“We’re implementing it really thoughtfully and cautiously and not chasing after AI for the sake of AI,” Corsa said. “We’re trying to solve business problems and customer needs. We first identify the problem, and then we go tech shopping.”
For example, American Freight is about to launch a test with Lily AI, which generates ecommerce product descriptions based on images. The platform uses generative AI to pick from more than 20,000 attributes and assign them to the product.
The goal of many of American Freight’s planned technology investments is to replicate the in-store experience online. An ecommerce customer can’t touch and interact with the fabric of a couch she’s considering, Joffe said.
In that sense, “traditional photography is dead for products,” she said.
Instead, she believes sophisticated renderings that better replicate that experience are the future. That includes the ability to turn images for a 360-degree look at them, and using augmented reality to view a piece of furniture inside a person’s home.
The retailer did not share what percentage of its sales comes through ecommerce, but most customers interact with American Freight through both channels, Joffe said. It’s not about targeting the online shopper as a separate customer from the in-store shopper, but rather catching that consumer wherever they might be looking for furniture inspiration, including on social media. Then, the shopping process might start online and finish in store, she said.
Finding new customers with value
American Freight will continue to prioritize value for consumers furnishing their homes, Ahlman said. The retailer’s sweet spot is someone looking for a deal, either to furnish their home or apartment. That cuts across demographics, from someone furnishing a dorm room or first apartment, to a higher-income consumer looking to purchase appliances for their rentals, she said.
American Freight brought on the concept of open-box appliances sold at a discount from the Sears Outlet merger. These products are discounted because of scratches, dents or other physical imperfections.
The listing highlights imperfections on the unit and the discounted price.
Now, Ahlman is working on replicating that experience online. In practice, that means each listing gets a photo of that specific unit online so the customer can see why it’s discounted. Customers can also view it side by side with an undamaged unit to compare. That process is popular with American Freight customers and has traditionally helped it target value-conscious customers, she said. Optimizing the discounts online will allow it to reach more consumers.
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