Deidre Woollard: Hello, I'm Deidre Woollard an editor at Millionacres, and thank you so much for tuning into Millionacres Podcast. We are talking about something a little bit different today, a little bit interesting, furniture. Why furniture? Well, we all know staging a house can make a difference in how fast a house sells. Furniture can also change how renters, vacationers, or long-term tenants feel about a place and we all need furniture. With me today is Sam Selby, who's the Director of Business Development at Fernish. That's fernish with an e. Fernish is premium furniture service that offers a monthly payment options. But this is not your parents rent to own. This is something entirely different. It's a part of the larger sharing economy and I think it's a really interesting trend that's happening right now. Welcome Sam.
Sam Selby: Glad to be here. Thank you.
Deidre Woollard: Well, let's talk about last year. Big year for furniture. Everybody was looking at their house and realizing like, "There has to be a home office in here." I know that some of the publicly traded companies like Wayfair had a big year. What was it like for you at Fernish?
Sam Selby: Obviously we saw similar trends as well. Home office furniture was really the first thing, it just spiked immediately. I think we had restocking about 300 percent increase in orders that contained work from home furniture from Q1-Q2 of last year. Then there was the second tailwind of regular home furniture because like you mentioned, people were spending all day and all night at home. They looked around and said, "While I wasn't planning on spending this much time at home, I want to reinvest in the home now." We were also in the crosshairs of home as well as everyone knows that home delivery became a normal or even a requirement in certain parts of the country. People just didn't want to go wonder through furniture stores. We were in that really beneficial place of being a home goods platform and also providing in-home delivery and set up. Then the third way was the global supply chain had all sorts of issues. With our turnaround times being seven days and being a circular business, we were less impacted by that.
Deidre Woollard: Interesting. I want to ask you about surfaces because last year, beginning of the pandemic, everybody is wiping everything. Then we got away from that but now as we start to think about going into hotels, going into vacation rentals, going perhaps even back into the office. What is that hygiene concern now? What's happening to make people feel more comfortable with that?
Sam Selby: I'd have to put on my partner heart here. I mean, we obviously have our own in-house operations and a 17-step cleaning and refurbishment process for all of our furniture when it comes back to our warehouse to make it like new when it goes out again. But it has certainly been a discussion point for a lot of our partners, particularly in the vacation rental area. I think the key there that we've really been working with our partners on has been quality and ensuring that if there is a ongoing service element that can be layered onto a vacation rental operator's portfolio that includes regular cleaning, but it also includes regular fixes and wipe downs or repairs to existing furniture can be ongoing maintenance basis to really make the customer experience at the end of the day great because that's really what matters. For our partners in the vacation rental space, that's something that we've been speaking with them a lot since last summer about how can we moving forward, make sure that customer confidence and now they're going to get a great, clean place that has beautiful furniture in it that they know has been cleaned and prepared to their expectations that there's going to be able to deliver on that.
Deidre Woollard: Interesting. Do you think that for the vacation rentals, is there a more of a focus on the furniture really needing to look new, look fresh because there is that extra layer of concern?
Sam Selby: This also goes into how the home is merchandised as well. I know there were some really interesting partnerships between I don't want to misquote here and think it was Airbnb and one of the companies in the home services space to put a seal of approval say, "This home has been certified clean by this brand." We think that there are certainly opportunities to do something similar with the quality of furniture in the home. I think that when you're talking about consumer expectations from a vacation rentals standpoint, a lot of the host, in order to meet those, have taken the opportunity to refresh their places. Hotels have done this, for instance, so have retail spaces. They're all investing in renovating or refurbishing the homes to make sure that the next travel cycle that's coming up here, I guess we're just starting to kick it off with Memorial Day. They have their best foot forward basically and obviously furniture and home goods is a big part of how those listings are merchandized on vacation rentals sites.
Deidre Woollard: Absolutely. Yet, are you seeing more requests from vacation rental operators now that we do seem to be preparing for quite a big summer?
Sam Selby: We are. Actually, we have a lot of inbounds and people are really anticipating all this pent-up demand being released in terms of travel. I think rightfully so. I mean, I don't know what Airbnb's website traffic looks like like but I'm sure it's growing especially over last year. A lot of folks are I think they have one foot in. They're saying, "Okay, well, if I am vacation rental operator, I know that I need to make up for a down-year last year but I don't want to necessarily make a huge investment in spending $40,000 to get new furniture into core and my home. So what are my options?" Then they find out about us and they find that they can pay for it monthly on a rent-to-own basis or they can just rent it if it's a seasonal market. They can just rent it for three or four or five months. That's a big benefit because then they can start to see the increase ADRs and rent rates that makes your furniture carries with it but they don't have to make the full upfront investment.
Deidre Woollard: Interesting. What's happening on the multi-family side? I know Fernish has relationships with multi-family apartments and some REITs. What does that look like?
Sam Selby: We partner with operators, owners, and fee-only managers, everyone who's touches the large managed multi-family complex. Really the goal there is, I think we have this aligned division on how can the resident experience be the best possible? How can our furniture service be used really as a differentiator for the communities? Residents have traditionally had two options with regard to their furniture. They're either paying to move their existing furniture with them back and amount of thousands of dollars and it's across country move. We know like Clockwork 70 percent of the time residents get new furniture within three months. That's tells us that they're [laughs] paying thousands of dollars just to have temporary furniture and you'll not have the mattress on the ground until they can get new furniture that fits their new floorplan or they are getting new furniture when they move in. The additional and all stuff they are getting all new furniture. Traditionally that's been a frustrating experience to say the least. I mean, you're talking about spending your first two weeks as a resident in your new city shopping for and then assembling cheap furniture or you're waiting 4-6 months for your nice couch to arrive. Neither of those are ideal resident experiences. The question becomes, if you're looking at new communities, would you rather be able to promise residents that when they move into the community, they'll have furniture from Crate and Barrel setup in their new home and they don't have to lift a finger or would you rather have the old experience. I think when we talk about partnering with multi-family managers and REITs it's really about reducing the barrier to entry, to moving into a new community. That's what it's all about and how that resonant experience with regard to move in and furniture and getting your home setup and settled. How that's built into that leasing and move in experience to really create a new magical experience for residents that doesn't involve assembling their new furniture.
Deidre Woollard: [laughs] Nobody likes that. I don't know anyone who's like, "Yeah, I get to assemble the furniture and use these weird wrenches that never seem to work." [laughs]
Sam Selby: Yeah, things that I've never said.
Deidre Woollard: Exactly. [laughs] With these experiences, is it more turnkey, like here's a whole apartment or is it more just room by room?
Sam Selby: Yeah, that's a good question. It's really both. I think it really depends on the on the type of customer. I think everyone is turnkey to some extent. Like you said, no one likes assembling furniture. I like it setup for me when I move in. I think traditionally, it's been difficult for consumers to trust that they're going to get the type of furniture that they want. Because fully furnished and turnkey furnitures, it's been synonymous with corporate suites in the past for like the last 40 or 50 years. This is a new turnkey service. It's high-grade residential furniture. We feature furniture from Crate and Barrel and CB2, but it's set up and delivered in your home. It feels like we're emerging almost from a stone age with regards to furniture, people have just accepted that, schlepping it around or assembling it or paying to store it while they moved to Boston for four months. I just our friend that's doing that right now. They've just accepted that's part of the owning furniture. I think consumers are starting to catch on that there's a better way and there is a service that can be evolved of it. To directly answer your question, we see it's turnkey for a lot of folks, especially those who are coming internationally. But for a lot of folks who are doing in-trust city moves, they've already got a few things and they just need to fill in around it.
Deidre Woollard: Interesting. I think that's one of the things I find fascinating about Fernish is that it is part of that sharing economy. I'm wondering, do you have designers in house? Because I know one of the things that has happened in last few years is those like designer services, where the designer doesn't even come to your house yet those online designer services. Is that something that you do or something that you're looking toward?
Sam Selby: Yeah. That's actually something that we offer to customers just through our partners. It's one benefit of being a Fernish partner from a vacation rentals standpoint or from a, I should say from a host standpoint or from a multifamily partner standpoint. The residents get access to our in-house design services. The whole goal there is to takeaway all of the anxiety. I know I feel that's around like, "Does this furniture even go together? Like how do I know, I'm such a novice in this space?" It can be a big barrier for someone even transacting in the first place. We hear all the time from partners that their residents really want some guidance around how to make their home feel like home because they plan on being here for a few years. We also hear from partners that especially in LA and Seattle tax scenes, where the Amazon employees just signed a 12 month lease and six months and still has the mattress on the ground because they are working so much. They don't have time to go pick up all their furniture. It can be big timesaver for people, we send them a selection that's custom to their floorplan, and they can choose from a few different options and then checkout.
Deidre Woollard: I love that. One of the things I'm really fascinated about is furniture ways to up, for the first time in my life, I'm living in large apartment building and oh my goodness, I am shocked by how many of the people in this building just throw out their furniture, relatively decent furniture and the amount of furniture in this relatively small building that gets destroyed every month is pretty substantial. I mean, this isn't good for anybody. Tell me a little bit about how Fernish takes furniture back and what that cycle looks like.
Sam Selby: I think we all have our stories or experiences of either this firsthand or seeing it. Furniture is a hassle to deal with if you no longer want it. That's one of the reasons that so great to have a service element to it. I just met with a partner this morning who oversees a portfolio in Seattle, if they spend $2,000 per month per property on furniture disposal services just to get rid of old furniture that's [laughs] left in their units. That's one additional unit of revenue for them and it hits their NOI because it's a recurring cost. Everyone has the stories about how furniture ends up in the dumpsters every month. Really our solution is that it's part of our service. When life changes and residents need to take the job offer in Dallas, we just come pick up the furniture and we have again, we have that sort of 17 step refurbishing and cleaning process to make it like new so you truly can't tell if it's the first time it's been used or it just came from manufacturer or it's the fourth time it has been used. Our refurb takes care of that. Then we deliver the new furniture or give it a new home. The really great part about this is when we operate in many, many more markets, if you're moving from your Seattle into Dallas today, we can just deliver your new furniture from our Dallas warehouse into your new Dallas apartments, say it's a two bedroom instead of a one bedroom, you can get a e-commerce stream your furniture that way. There's no disposing of your old furniture. Your waste footprint is zero. We find that, especially with younger consumers, this is a big deal to them. Just like they don't own their DVD collections anymore. It really doesn't make sense to really own your furniture. You want to stream them both.
Deidre Woollard: I love that idea of streaming the furniture. I haven't ever heard it put that way, but that really is a great idea. To me also connects to the idea of something that's happening in retail right now where you have this evolution from fast-fashion and people are starting to consider the environmental cost of fast-fashion. More of a movement towards a slow fashion or finding ways to vintage or recycling and things like that. Do you feel like something like that is happening in the furniture industry too, that there is that extra level of awareness now, both on the consumer side and perhaps on the production side as well?
Sam Selby: Yeah, absolutely. I mean, Levi's has done such an amazing job of turning old vintage products into the new core thing. I think their old jeans sell for more than their new jeans. They were really pioneers, I think that was in the 90s. But obviously, I think this trend, it really did start in fashion. I think it is catching on in furniture, especially the old habits of consuming, using, and discarding even the same product multiple times throughout your lifetime. People are doing that with furniture and we know that. People buy furniture with the intention of having it for a temporary amount of time and they don't want to spend a lot of money on it because they know they're going to throw out in the future. What we're seeing is that with retail and with fashion, people are shifting towards desiring high quality goods. They feel better, they look better, and most importantly, they last longer. Apparel and furniture are actually similar in their very like tactile experiences. You know, there's a certain quality of touch-and-feel to them. You are also spending a lot of time with the products. You're in your clothes all day, you're in your office chair all day, you're on your couch all evening. So there are noticeable differences when it comes to quality. I think that companies like Rent the Runway and fashion and furnishing furniture. What we're able to deliver with a circular business model is access to those goods that people might not have otherwise. They might decide to go cheap because they know what's going to be temporary or maybe it's permanent, but they don't know how long they're going to need it and it ends up being permanent. Really the goal is providing access to great quality goods so that people don't have to shell out a bunch of money for it upfront, but they can still enjoy those products.
Deidre Woollard: Once you experience better furniture is like experiencing better fashion and you're like, "Oh, this fits better, this last better, this looks better, the surfaces are nicer." I feel like it's very hard to go backward once you've had that experience.
Sam Selby: Yeah, there's a big surprise and delight factor to it. Companies like Rent the Runway, there's whole recommendation engines around it and they can really enhance your customer experience outside of the physical product itself. That's what we try to do also with things like Fernish design services. Maybe you didn't know how great your living room could look. It's an opportunity for us to really exceed customer expectations there.
Deidre Woollard: Sam I love that. Let's take a quick break here.
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Deidre Woollard: I'm back with Sam Selby of Fernish and we're talking about furniture, furniture trends. Now let's talk a little bit about Fernish's use of real estate itself. Because I think this is an interesting topic for those of us who are also interested in industrial real estate and warehouses. I know you are in a few markets. You've got Los Angeles, Orange County, Seattle, Dallas, and San Diego. I know you're looking to expand more. Do you need to have warehouse space in every market you expand into?
Sam Selby: Yeah. We don't need to, but we do. That's a decision we made early on. Actually, the company is to have our own not just warehouses but our own in-house operations, trucks delivery team, refurbishment in each market. Really that's to ensure we are providing the best customer experience. I didn't fully appreciate this until I got to Fernish because I was always in the digital app world. But it is unbelievably complex and complicated to make sure that something gets to someone at the right time in the right place. I didn't have an appreciation for it. So being able to manage that all-in house, build our own proprietary asset management software, have our own teams with their own devices and just have that real-time communication between what's happening on the field, what's happening in the warehouse and then headquarters is really powerful especially as we scale to more markets. We also have a lot of former Amazonians at our company, my boss included. If you don't anything about Amazon's customer-centric mantra that certainly migrated over to Fernish. We've made sure that we really take that to heart and have our own operations locally in each market.
Deidre Woollard: Interesting. When you're planning a market, how do you know how much square footage you're going to need?
Sam Selby: We hire people smarter than me. That's the first step. The second one is we do look at a lot of different data. On the demand side, there is a lot of look alike audiences and ad platforms. What percentage of the homes are multifamily dwelling units versus single-family dwelling units? Where can we lead in an existing partnerships to scale the market really quickly? What are the broad consumer demographics and psychographics? Then on the operation side, what types of furniture are popular in those markets? What size of furniture? It's sectionals are not fantastic in Manhattan. You can imagine. That allows us to also look through what does our routing in the market look like relative to our warehouse location, and then what route density can we achieve and what are mobility patterns? All these at the end of day help us make assumptions on two key variables. One is, what's our average order volume and order size, so that we know how much inventory keep on hand. Therefore that flows into what square footage do we need. Our warehouses, I think are between 30,000-50,000 square feet each depending on the market and the population that they serve.
Deidre Woollard: When you're looking for new markets, are you looking for a market with population growth, a high percentage of renters, that sort of thing?
Sam Selby: Exactly. Yeah. I don't know what the exact percentage is now but the vast majority of folks who are renting or rental owning their furniture or just utilizing Fernish are also renting their homes. Makes sense. Then mobility patterns are another thing we look at. Surprisingly, when we were doing our analysis, there are certain markets that you would think, like San Francisco, for instance, you'd say, "Oh San Francisco feels like a great market." It's gotten a lot of young people, they work in tech. It's very progressive and they are early adopters to new services. But then when you look at the mobility patterns that actually has some of the lowest mobility rates of any major market in the country, and that's because of rent control. People stay in their homes for seven or eight years there. It's actually not a fantastic market from a demand standpoint. It's also difficult to get around the whole bay area with that big body of water in the middle of it.
Deidre Woollard: Good point. Do the current trends, are they influencing anything for you right now? You're in Dallas already, but we're seeing this massive migration happening to the Sun Belt areas and certainly the Austin place like Charlotte. Is that something else that you're looking at as well?
Sam Selby: Yeah, and it certainly is. Dallas has been such a phenomenal market launch for us. It has been heads and shoulders above where we thought it was going to be. Whether or not that means that there is a blueprint for Dallas and other markets is TBD and we're actually looking at that right now for our second half of the year expansions. Population growth is something that we were factoring in as a major variable in our future market launches, and you could imagine that Austin is a place that's high on our list as well. Same with Atlanta and Florida too. Those happen to be areas where we also conveniently share a lot of multi-family partnerships. The Sun Belt is an area where the same operators, the same owners have broad swaths of their portfolio in the different markets. It makes it very easy for us to gain demand density early on there.
Deidre Woollard: That makes sense. You mentioned Crate and Barrel earlier. I know you have a deals with a few different companies. What are you looking for in partners on that side? Do you have any plans to move into manufacturing yourselves?
Sam Selby: Yeah. We're always discussing it. I think in the future state of Fernish is going to be one where we still rely very heavily on our wholesale partnerships with folks like Crate and Barrel and CB2. They've been so valuable to us. I'm actually very interested in ways that we can grow that partnership just outside of the sourcing and wholesaler partnership that we have. There's certainly things that they could learn from us about rental and that we can learn from them about retail, for instance, or e-commerce. I think that those partnerships can really help both parties grow. But then controlling our supply chain from start to finish, it's also very important. If the last year has taught us nothing else, from a furniture perspective, it's that the supply chain is incredibly fragile, and it takes a lot to make it work really well from a global perspective. The more of that that we can control on our end, then we can have predictability into what do we need to, for example, boost up production for an upcoming seasonal sale that we have. Or when we notice seasonal trends and furniture patterns, we can adjust accordingly internally and we don't have to rely on a party or partner who may have varying costs in the parts that they source for Mexico. These are all very complex thing that I don't really understand, but I'm regurgitation what's smarter people tell me here. But I do know that we want to have a healthy mix of a lot of different things.
Deidre Woollard: Well talking about the supply chain is really interesting because I know right now we are having lots of conversations in the media too about this. What about Lumber? Does that impact how you look at things too? The cost of Lumber for a home building it's adding to the cost of homes. Is that something that you're considering in the furniture industry as well?
Sam Selby: Yeah. We certainly noticed it. It certainly impacting prices from goods that are, I think like a wooden coffee table that's 98 percent wood, except for the fixed fixtures. There's really two ways that we're fortunate. One is, we're platform and so we can shift our sourcing somewhat. We can also shift what we carry in-house or what we decide to refurbish more quickly towards wooden goods or away from wooden goods. We have a lot of metal steel case, not Steelcase the brand, but metal steel products like coffee tables and bookshelves and whatnot that don't have any wood. So we can feature those but we can also re-utilize the assets that we already have. We've already paid for those assets, we've already paid for their wood, we've already sourced the skew. It's much better for us and for our customers also if we just are able to re-utilize those assets again. I don't think we allow that to quite impact our sourcing quite as much as maybe traditional e-commerce brands would.
Deidre Woollard: What happens to the furniture? Does it cycle out eventually and what happens there? How many times can it go through a cycle of going back to the factory and being refurbished?
Sam Selby: It's very skew by skew. Hard dining tables, for instance, especially if they aren't wood. We're still seeing what the end of that lifetime looks like for us and what the impact on our gross margin is from re-utilizing those assets. We're hopeful that an average of somewhere between three and six turns. Again, it very much depends on the type of asset, but often new customers fall in love with pieces and they end up buying them out. That can shorten the lifetime, or they just pay for them until they own them because they love that sectional. We're seeing that quite a bit too and so what the final number ends up being, we actually don't know because we're a relatively young company and we are still figuring out what the full lifetime of those assets are because one of the key metrics that we look at when we're sourcing furniture is what the durability and the quality are going to be. So by design, we haven't found that out yet.
Deidre Woollard: Interesting. What do you think about the future of really customized furniture? Because I see that's something that's starting to happen and there's talk about 3D printing and things like that. Do you feel like in the future people are going to want furniture to be more and more customized to their specific expectations?
Sam Selby: Absolutely, we already see requests for that. When we're looking at modular furniture, and this part goes back to your last question of controlling the supply chain and getting into manufacturing. There are manufacturing partners who do this really well, there are ways that we think we can do it really well also. It's how do you utilize the same parts across a number of different skews? Make them feel consistent from a feel standpoint, but also definite enough so that this one that may have some gold accents but those could be swapped out for some chrome accents. People can really customize to their tastes. The last thing we want is that someone loves a couch but they end up not getting it because it has the wrong color legs. That's a problem that's easy to solve and we should be solving that. Where it gets really interesting, I think, to go a little outside of your question, but there are a lot of companies like Bumblebee Spaces is one, for instance. I was meeting with them at a conference back when conferences were a thing and they're very much a modular space company. Customizable spaces so that floor plans can be shifted, especially when you think about short-term rentals and hospitality. If you're yielding your rates or revenue managing your space according to demand and you need three single rooms to turn into a triple room, they have these walls that move that you can do that. But that begs the question, how does the furniture adapt to that as well? Can that be done through some sort of ongoing service with modular furniture so that the couch can become large because another piece is put in it and then another bed-frame can be added? That's a space that is incredibly exciting, and we think that through partnerships we're really well-positioned to serve it also.
Deidre Woollard: Interesting. Are you getting into the co-living spaces at all?
Sam Selby: Yeah, we work with a few co-living operators and we work with them on a couple of different ways. One is very much in the vein of the multi-family partnerships, offer their residents a turnkey furniture service. Because, I don't know this for a fact, but I imagine that co-living definitely appeals to younger folks and folks who know that they're going to be moving in the next probably 24 months or so and so as such, furniture is not really a huge investment they want to make on a personal standpoint. But then also for the partner, we can source and provide their furniture as well as the ongoing service element to help them reduce their ongoing maintenance costs. It doesn't make sense for them to have to rent storage space nearby for extra furniture's use, for instance. Just in case a table leg breaks, that's crazy. We work with them in that vein also to be able to service the furniture in their apartments and quickly swap that out for something else. That's another interesting way that we're working with co-living. But yeah, exactly, there's a lot of opportunities there.
Deidre Woollard: What about co-working and commercial real estate, is that an area you're also looking to expand into?
Sam Selby: Yeah, we've done a few projects in the past. I think there are different sets of considerations, for instance, commercial-grade furniture that goes in a hotel lobby and has to be flame retardant versus high-grade residential, Cb2 and Crate and Barrel, which is what we feature. But the trends in furniture types within offices, it used to be 80 percent hard case goods, and 20 percent soft goods, and that has flipped now. It's 80 percent sofas and communal seating and coffee tables and things like that. What the future of the office looks like, I think, is a big question mark for a lot of folks. I don't know if it's going to be communal, I don't know if it's going to be very sectioned off. I think creative spaces are going to play a huge part in the future office, and so that does tend to lend itself to how do we provide furniture in a space that's really conducive to small group and team gatherings and things like that. It's something that we've done a little bit of in the past, but we do think that given the fact that we aren't the type of business that's going to do 150 desks, that we actually are well-positioned to work with folks in the creative space, communal space setting that may be the future of the office.
Deidre Woollard: I think that's a very interesting thing that's going to happen with furniture too, is the hard versus soft. Certainly, all of us who've worked from home, from much softer [laughs] couches and chairs, I think people are going to go back to the office and be, all of this is way too rigid.
Sam Selby: Right, not great for our posture but maybe great for the aesthetics of the office, I should say.
Deidre Woollard: Absolutely. As we wrap up, we've talked a little bit about trends in furnishings, but let's talk a little bit more about that. Is there anything that individual real estate investors should keep their eye on in terms of trends that you're seeing?
Sam Selby: Technology and circular business models, they're creating new ways for real estate and furniture to work together. Those two things used to be inextricable from one another. Every time you got real estate, or you manage real estate, or you made an investment in real estate, furniture was just part of your responsibilities with that because every space has some type of furniture in it, generally. But what we're really hoping to be able to do, and what we've done with our partners so far, is allow real estate operators and asset managers to focus on what they do best. Focus on all of the things that they already have to do related to the real estate, and be able to share those responsibilities and the cost overhead and the ongoing costs that furniture requires. I always tell people, furniture is the worst business to be in unless you're in the furniture business. It's very appealing to say, "Look at the higher margins with furniture. If we just take on that, we can vacuum that into our profits as well." but what's often not accounted for is ongoing costs associated with transporting, repairing, refurbishing, disposing of, getting storage to store excess skews nearby. All the outsource, logistics, and transport associated with that. Then not to mention, you're pretty much refreshing it every five years anyway. Just build that into the cost and you're looking at significant overhead. What companies like furniture are able to do are take all that and gain economies of scale because we have this consumer arm where we already have the transportation, we have the warehouses and refurbishing. If you look at vacation rental space, for instance, a ton of those company is just evaporated. That was in large part due to the fact they had billions of dollars of furniture on their balance sheets and they were left holding the bag. I think that the economies of scale that we're able to provide. I'd imagine this is happening in other sectors also, are really freeing up real estate operators to say, "Okay, let's do what we do best. Investing, operating, and marketing." and then leave furniture as something where we can save them a lot of money, and a lot of human capital overhead also to be able to focus on what they do best. That's one of the most exciting parts of the way that we work with real estate operators today.
Deidre Woollard: Interesting. In terms of furniture, it's an area that there isn't a lot of innovation in necessarily. Wondering a little bit about smart furniture. We've got smart beds now, we've got Sleep Number and things like that. There's obviously a technology things happening around sleep and around that area of the house. Do you feel like there's potential for furniture to be a little bit smarter? I mean, we've got smart homes now that are wired, but then the furniture that's in there, not smart yet.
Sam Selby: [laughs] It's not something that we were working on in-house, but I think there's certainly opportunity. The name of the game is, do consumers want it, and doesn't make their lives easier. You could imagine, it's not too much of a deviation to go from a Sleep Number, for instance, I'm just saying the brands that I see, commercials for it.. But Sleep Number bed to something that's really smart in terms of an office chair. People are spending a lot of time in their office chairs. Posture is a problem, ergonomics is a problem. That's probably an area where companies might want to invest to reduce medical claims in the future, things like that. I'm sure that that can be carried through to a bunch of different sectors. Not to mention, we have standing rise desks for instance. But why shouldn't that learn your behaviors and give you an easier home experience? I think that's a really smart idea and it's probably something that a lot of companies will be implementing.
Deidre Woollard: I think there's so much potential. One more question I had about the furnishings that you have and how you track things. Are you using an RFID tag or how are you tracking individual pieces as they go through cycles?
Sam Selby: This is what I thought you would ask me as smart furniture, but it is smart on the backend somewhat. Just out of necessity, we have had to develop our own in-house asset management software. Yeah, we utilize RFID tags, we have devices, point of entry in terms of the truck or the home. We can understand a lot about an asset's history. We know where the coffee table has been, and we know what repairs and refurbishments were made to it so that we can say, "Okay, this is what's happening to these skews over their lifetime." and look at broad trends and say, "The table legs are always breaking on these after the third time. Let's make sure that the table legs are fastened or they're replaced in advance so that that furniture gets a new life with the third customer. All sorts of things. Again, this is a bit outside of my day to day, but I know that there's really exciting things, so that we can learn how we can most efficiently manage our supply chain. Again, at the end of the day, the goal is to reduce the waste of furniture and be smarter about how we source and reutilize and transport assets so that they can not end up at landfills at the end of the day.
Deidre Woollard: Yeah, I think that's just so smart. There's so much we're not tracking, and having access to that data will [MUSIC] just lead to all sorts of interesting decisions.
Sam Selby: Yeah. Definitely.
Deidre Woollard: Well, thank you so much for your time today, Sam. You can learn more at Fernish, that's F-E-R-N-I-S-H.com. You can always email us at media@millionacres to share your thoughts. Stay well and stay invested.
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