HomePortfolio.com Helps Home Design Businesses Leverage the Web
April 3, 2001
Successful Home Fashion Internet Company calls itself an "Enabler" of e-Commerce
It's hard to believe that the co-founder of a company just turning five years old can have published a memoir of the experience. But such is the age of the Internet and the story of Tom Ashbrook, author of The Leap: A Memoir of Love and Madness in the Internet Gold Rush (Houghton Mifflin).
In the barely five years since its inception in 1996, the company has raised $70 million in investments and its founders, internet entrepreneurs Ashbrook and partner Rolly Rouse, have succeeded in setting up the largest, most successful home design and decorating Web site in cyberspace history.
But the ride to the virtual top has had its scary moments. Although the mission of the company has always been to provide a single resource to help consumers envision their dream homes and make them a reality, the present business strategy as a consumer-based informational Web site came after a few dead ends required reconfiguring the course. The company started as a CD-ROM, a false start that lasted about a year. When the CD-ROM market disintegrated in 1997, the company changed its name and its course, shifting to a Web site strategy. Then, in 1999, HomePortfolio gave in to the pressure of its Web visitors and launched an online store with merchandise mainly drop-shipped directly from the manufacturers.
But in the words of co-founder Rouse, e-commerce was "a speculative bubble" that burst. It didn't take long to realize that that was the wrong direction, and about six months later, the online store was discontinued. And this gave them title to another Internet Age curiosity: One of the most successful home decorating Web sites in the world does not sell a thing to the consumer.
Instead, the .com currently features 34,500 products from a network of more than 1,350 manufacturers and 60,000 retailers. An in-house team of editors with expertise in various categories of home furnishings selects the manufacturers and product lines featured on the site. The site provides extensive information and enticing editorial comments about its products, and a portfolio function where consumers can rate and save their favorite products to a file. When they are ready to buy, it refers them to a retailer in their area (sorted by zip code).
"It's a matter of specializing in what you do best," said Dale Williams, president and chief executive officer of HomePortfolio. "What we do best is provide an editorially independent selection of the world's best home design products. For us, being an enabler of e-commerce services to retailers and manufacturers who cultivate consumer relationships is a better way to go."
Williams, former executive vice president of WestPoint Stevens, recruited to run HomePortfolio in 1999, believes that consumers will eventually want to find everything they've ever heard of on the Web. Manufacturers are trying to figure out how to use the Web but at the same time, many of them don't want to alienate their largest dealers and retailers by actually selling on the Web. Some are developing certain products as "online brands;" others are still trying to figure out the channel issues. In the meantime, HomePortfolio offers them a solution—use this platform to reach consumers with information, he said.
"Recent experience and research show that people want to learn about home design products on the Web without the pressure of a sales person," said Williams. "We provide that information so that by the time the consumer crosses the threshold of a store, she is ready to buy. In this way, we close the loop for retailers and bring new efficiencies into the sales cycle."
The consumers that HomePortfolio reaches are affluent, internet savvy and design conscious. Visitors average 75,000 per day, and the site has 300,000 "registered" users. These premium buyers are unlikely to make large purchases online, but they are quite likely to research their purchases on line, said Maria LaTour Kadison, senior vice president of marketing for HomePortfolio.
"Our target audience has been the premium buyers. They may not be the biggest section of buyers, but they are the consumers that spend the most," she continued. "We are now trying to carefully broaden out to bring it down closer to the upper end of the middle market." This large consumer base attracts manufacturers and retail clients, but most of HomePortfolio's revenues actually come from the Web-based proprietary technology, marketing and hosting services it sells.
"This really developed from client demand. Our business partners liked our Web features so much that they asked if they could license the technology. We now produce independent Web sites for our clients with the same functionality and features as ours, but with their own unique brand image," said Kadison.
The company also provides its business clients with market reports using data gathered from the users of the site. The site captures data about purchasing trends by category, what kinds of products people are saving to their portfolios, how these products are being rated by preference, and what regional preferences are appearing in the "Where to Buy It" requests.
"This industry has not been known for its sophisticated market analysis. Yet it's a very competitive industry, and with the economy possibly turning downward, the data we provide may be invaluable to those who are more forward-thinking, more proactive in trying to get market share. We're providing our clients with information they've never had access to before," said Kadison. "The bottom line for the manufacturers and retailers is all about sales. Our data helps them get ahead of the curve of consumer demand. Those who produce for demand, rather than produce and then try to create demand, are getting excited about what we're doing. We're helping them target their market."
The company recently launched an Imaging Division headed by Debra Graziano, former vice president/founder Rothtec Imaging Corp. and design director, Computer-Aided Design Division, WestPoint Stevens. Graziano also has a background in fabric photography. She is working with the company's chief technical officer, an expert in 3-dimensional design, Shawn Becker. According to Kadison, even though it deals with fashion, being an internet company means that virtually everything the .com does is tied into engineering.
But Williams also believes strongly that although some home decorating products such as bathroom fixtures lend themselves readily to online shopping, the touch-and-feel aspect of textile sales cannot be ignored. Thus, HomePortfolio's "Where to Buy It" referral feature directs consumers to where they can touch and buy products seen at the site.
Although it may take years for the investors to actually earn back more than invested, both they and the company feel the enterprise is a viable way to reach the fragmented $250 billion home design market. The home-design players can extend their market reach, increase sales and better meet the needs of consumers, say company executives.
"We've set up several win-win scenarios," said Kadison. "We provide valuable information regarding products and design to consumers, and valuable information to manufacturers, wholesalers and retailers about their consumers. We've set up professional to consumer relationships. Our base of retailers keeps expanding, which benefits the retailers, their wholesalers and the users. Everyone wins."
With such a promising business strategy, HomePortfolio has had to handle an unforeseen challenge: other internet companies floundering in the digital waves have asked if they can somehow partner with the company that has managed to get the wind in its sails. Rather than push them all under, the upbeat management of HomePortfolio seriously considers each request, a task that has demanded much time and energy from Dale Williams.
But, said Kadison, "we feel very lucky. We have a four to six year head start on anyone else trying to do this. We are well funded and we have a good trajectory. We are the leaders."
SIDEBAR
The company is such a complex network of partnerships and services that some have trouble understanding exactly what it is that HomePortfolio does.
The B2C operation provides a vast database of high-end home design products to inspire and help consumers put together their dream home. Consumers can conduct product searches across the market by category, style, brand name or price. They can save their selections to their Home Design Portfolio, then use the dealer locator function to find the products online or in a retail store near them. Or they can provide electronic access to their portfolio to a third party (builder, designer, architect, friend) for review.
The B2B operation provides manufacturers, retailers and designers with a selection of Web-based technologies to help them reach, manage and respond to consumers. The Online Catalog provides them with a direct link to a database of customers and designers for online presentation of product images and text. HomePortfolio e-commerce enables clients within its network to sell their products online and Marketing Services provides Web-based market intelligence, advertising and online direct marketing as well as activity reports on a monthly basis. Web Development services provide clients with fully featured Web sites that are hosted on HomePortfolio's servers but are accessed through both the partner's own URL and a co-branded area on HomePortfolio.com.
HomePortfolio recently formed an alliance with the American Society of Interior Designers (ASID). The partnership gives consumers direct access to a database with contact information for 19,000 ASID members who specialize in interior design services.
Affiliated sites give visitors access to original artwork and other products through links to eZiba.com, WaterWorks.com, Guild.com, eyestorm, and NextMonet.com.
It's hard to believe that the co-founder of a company just turning five years old can have published a memoir of the experience. But such is the age of the Internet and the story of Tom Ashbrook, author of The Leap: A Memoir of Love and Madness in the Internet Gold Rush (Houghton Mifflin).
In the barely five years since its inception in 1996, the company has raised $70 million in investments and its founders, internet entrepreneurs Ashbrook and partner Rolly Rouse, have succeeded in setting up the largest, most successful home design and decorating Web site in cyberspace history.
But the ride to the virtual top has had its scary moments. Although the mission of the company has always been to provide a single resource to help consumers envision their dream homes and make them a reality, the present business strategy as a consumer-based informational Web site came after a few dead ends required reconfiguring the course. The company started as a CD-ROM, a false start that lasted about a year. When the CD-ROM market disintegrated in 1997, the company changed its name and its course, shifting to a Web site strategy. Then, in 1999, HomePortfolio gave in to the pressure of its Web visitors and launched an online store with merchandise mainly drop-shipped directly from the manufacturers.
But in the words of co-founder Rouse, e-commerce was "a speculative bubble" that burst. It didn't take long to realize that that was the wrong direction, and about six months later, the online store was discontinued. And this gave them title to another Internet Age curiosity: One of the most successful home decorating Web sites in the world does not sell a thing to the consumer.
Instead, the .com currently features 34,500 products from a network of more than 1,350 manufacturers and 60,000 retailers. An in-house team of editors with expertise in various categories of home furnishings selects the manufacturers and product lines featured on the site. The site provides extensive information and enticing editorial comments about its products, and a portfolio function where consumers can rate and save their favorite products to a file. When they are ready to buy, it refers them to a retailer in their area (sorted by zip code).
"It's a matter of specializing in what you do best," said Dale Williams, president and chief executive officer of HomePortfolio. "What we do best is provide an editorially independent selection of the world's best home design products. For us, being an enabler of e-commerce services to retailers and manufacturers who cultivate consumer relationships is a better way to go."
Williams, former executive vice president of WestPoint Stevens, recruited to run HomePortfolio in 1999, believes that consumers will eventually want to find everything they've ever heard of on the Web. Manufacturers are trying to figure out how to use the Web but at the same time, many of them don't want to alienate their largest dealers and retailers by actually selling on the Web. Some are developing certain products as "online brands;" others are still trying to figure out the channel issues. In the meantime, HomePortfolio offers them a solution—use this platform to reach consumers with information, he said.
"Recent experience and research show that people want to learn about home design products on the Web without the pressure of a sales person," said Williams. "We provide that information so that by the time the consumer crosses the threshold of a store, she is ready to buy. In this way, we close the loop for retailers and bring new efficiencies into the sales cycle."
The consumers that HomePortfolio reaches are affluent, internet savvy and design conscious. Visitors average 75,000 per day, and the site has 300,000 "registered" users. These premium buyers are unlikely to make large purchases online, but they are quite likely to research their purchases on line, said Maria LaTour Kadison, senior vice president of marketing for HomePortfolio.
"Our target audience has been the premium buyers. They may not be the biggest section of buyers, but they are the consumers that spend the most," she continued. "We are now trying to carefully broaden out to bring it down closer to the upper end of the middle market." This large consumer base attracts manufacturers and retail clients, but most of HomePortfolio's revenues actually come from the Web-based proprietary technology, marketing and hosting services it sells.
"This really developed from client demand. Our business partners liked our Web features so much that they asked if they could license the technology. We now produce independent Web sites for our clients with the same functionality and features as ours, but with their own unique brand image," said Kadison.
The company also provides its business clients with market reports using data gathered from the users of the site. The site captures data about purchasing trends by category, what kinds of products people are saving to their portfolios, how these products are being rated by preference, and what regional preferences are appearing in the "Where to Buy It" requests.
"This industry has not been known for its sophisticated market analysis. Yet it's a very competitive industry, and with the economy possibly turning downward, the data we provide may be invaluable to those who are more forward-thinking, more proactive in trying to get market share. We're providing our clients with information they've never had access to before," said Kadison. "The bottom line for the manufacturers and retailers is all about sales. Our data helps them get ahead of the curve of consumer demand. Those who produce for demand, rather than produce and then try to create demand, are getting excited about what we're doing. We're helping them target their market."
The company recently launched an Imaging Division headed by Debra Graziano, former vice president/founder Rothtec Imaging Corp. and design director, Computer-Aided Design Division, WestPoint Stevens. Graziano also has a background in fabric photography. She is working with the company's chief technical officer, an expert in 3-dimensional design, Shawn Becker. According to Kadison, even though it deals with fashion, being an internet company means that virtually everything the .com does is tied into engineering.
But Williams also believes strongly that although some home decorating products such as bathroom fixtures lend themselves readily to online shopping, the touch-and-feel aspect of textile sales cannot be ignored. Thus, HomePortfolio's "Where to Buy It" referral feature directs consumers to where they can touch and buy products seen at the site.
Although it may take years for the investors to actually earn back more than invested, both they and the company feel the enterprise is a viable way to reach the fragmented $250 billion home design market. The home-design players can extend their market reach, increase sales and better meet the needs of consumers, say company executives.
"We've set up several win-win scenarios," said Kadison. "We provide valuable information regarding products and design to consumers, and valuable information to manufacturers, wholesalers and retailers about their consumers. We've set up professional to consumer relationships. Our base of retailers keeps expanding, which benefits the retailers, their wholesalers and the users. Everyone wins."
With such a promising business strategy, HomePortfolio has had to handle an unforeseen challenge: other internet companies floundering in the digital waves have asked if they can somehow partner with the company that has managed to get the wind in its sails. Rather than push them all under, the upbeat management of HomePortfolio seriously considers each request, a task that has demanded much time and energy from Dale Williams.
But, said Kadison, "we feel very lucky. We have a four to six year head start on anyone else trying to do this. We are well funded and we have a good trajectory. We are the leaders."
SIDEBAR
The company is such a complex network of partnerships and services that some have trouble understanding exactly what it is that HomePortfolio does.
The B2C operation provides a vast database of high-end home design products to inspire and help consumers put together their dream home. Consumers can conduct product searches across the market by category, style, brand name or price. They can save their selections to their Home Design Portfolio, then use the dealer locator function to find the products online or in a retail store near them. Or they can provide electronic access to their portfolio to a third party (builder, designer, architect, friend) for review.
The B2B operation provides manufacturers, retailers and designers with a selection of Web-based technologies to help them reach, manage and respond to consumers. The Online Catalog provides them with a direct link to a database of customers and designers for online presentation of product images and text. HomePortfolio e-commerce enables clients within its network to sell their products online and Marketing Services provides Web-based market intelligence, advertising and online direct marketing as well as activity reports on a monthly basis. Web Development services provide clients with fully featured Web sites that are hosted on HomePortfolio's servers but are accessed through both the partner's own URL and a co-branded area on HomePortfolio.com.
HomePortfolio recently formed an alliance with the American Society of Interior Designers (ASID). The partnership gives consumers direct access to a database with contact information for 19,000 ASID members who specialize in interior design services.
Affiliated sites give visitors access to original artwork and other products through links to eZiba.com, WaterWorks.com, Guild.com, eyestorm, and NextMonet.com.
