How Kroft Brought its Digital Furniture Brand into Physical Retail

How Kroft Brought its Digital Furniture Brand into Physical Retail

Dustin Kroft always had a passion for design and working with his hands. In 2014, he turned his passion into his profession and launched Kroft—a brand offering locally made heirloom-quality home goods and furniture that stand out for their unique designs. 

While Dustin was focused on manufacturing high-quality products, he was equally intent on ensuring Kroft’s customers got the highest standard of service. To bring that vision to life, Kroft rejected wholesale relationships in favor of owning the end-to-end customer experience. 

“We are a DTC brand. We don’t have any wholesale relationships. Our goal from the beginning was to build intimate connections with each of our customers,” Dustin explains. “By avoiding any intermediaries, we can have a stronger relationship with the folks who purchase from us and serve them better.”

Following the traditional DTC playbook, Kroft began selling online with Shopify and attended trade shows to connect with its local audience. But with the pandemic, trade shows were no longer a reliable way to meet local customers and build relationships. “With the pandemic, once trade shows stopped happening, I felt like we were without a vehicle to connect with our own community,” says Dustin. 

“There’s a real sense of victory when you’re able to sell goods online to far away places. I still have yet to be desensitized to the euphoria of knowing that someone in Singapore is supporting our brand.” But Dustin knew that opening a physical store would help Kroft serve its local community better. 

We were so focused on ecommerce that we didn’t pay enough attention to local customers. Retail was a scary place at the beginning of the pandemic, but seeing For Lease signs around the city made me seriously think about opening a store. With favorable leases, the conditions were right to open a permanent retail location.

But to suggest transitioning from online-only to selling both online and in-person was just a matter of favorable leasing conditions wouldn’t be telling the full story. There were many factors that made opening a retail store a sensible path forward. Kroft transitioned away from custom work to a stable product line. As a result, its online revenue and customer base grew to a point where Kroft could invest in physical retail. 

Transitioning from custom orders to a product line

Growing a business on the premise of custom orders is challenging. It requires testing out new designs and paying attention to what consumers say: both with their wallets and in their feedback. 

But once Kroft found product-market fit, Dustin sensed an opportunity to transform Kroft’s entire manufacturing process. All it took was one product to change Kroft’s growth trajectory. “After designing a stable of products that didn’t quite connect with our base, we finally stumbled upon a design that made sense to customers all over the world. We were selling units all the time,” Dustin says. 

That product’s success was a huge moment for us. It became the North Star which we used to inform the design of our product catalog.

And as Kroft’s product line took shape and pandemic tailwinds increased furniture and home goods sales, Dustin’s attention became focused on the development and production of Kroft’s product line. “The pandemic accelerated our sales volume, and by spring 2021, we stopped doing custom work and fully committed to our product line. We were selling through everything we made.”

While many home goods and furniture retailers struggled with delivery times, Kroft’s nimble structure and local supply chain meant it could start offering next-day delivery for local orders for most products. “With next-day delivery, we always need stock on hand to fulfill orders,” Dustin says. “For 85% of our product line, we always have stock to support demand.” 

Powering Kroft’s new business model was its sales data. By monitoring each product’s sales and forecasting demand, Dustin was able to manage inventory levels, keep up with demand, and ultimately fuel the brand’s growth. “Shopify’s reports give us really good data on what sells, which helps us know what to produce more of and set inventory thresholds we need to maintain to support demand,” he says. 

 

The limitations of selling exclusively online

While some DTC merchants may be content selling exclusively online, Dustin knew that a physical presence would help shoppers interact with Kroft’s products and give them the confidence to buy. 

“Products listed on our website range from $18 to $800. As you creep up that scale, we get more shoppers asking where they can see our products,” says Dustin. “While great product photography helps, people still have reservations about spending $800 on a shelving unit without seeing it first. This became a big motivation for also having a brick-and-mortar store for the brand.”

And the more he thought about it, the more Dustin saw the writing on the wall: it was time to open Kroft’s first permanent retail location. “There’s a huge benefit to having a multi-layered shopping experience. It just gives you a way to connect directly with customers, build relationships, and foster brand advocacy.”

Our reputation and referrals give customers the confidence to buy from us online, but having a physical location allows us to showcase the detail and craftsmanship that go into making our products.

Having successfully scaled production while maintaining high-quality standards, Dustin focused his energy on finding the best space to showcase Kroft’s products and give them the tactile experience they craved. “Once our manufacturing was really streamlined, it felt like the right time to invest in connecting with people and giving them a place to interact with our products. Having a retail store is the best way to do that.” 

 

Offsetting risk with data 

While some merchants are reluctant to expand into physical retail because of the upfront and ongoing costs involved in opening and operating a store, Dustin leaned on online sales data to make a calculated decision. 

“We have a large customer base in Toronto who buy from us online,” Dustin says. “We have a large following in the greater Toronto area on social media. Having a large base of customers and people interested in our brand near where we want to open the store insulates us from lots of the risks associated with opening a store.” 

Indeed, opening a store near Kroft’s customer base helps serve them better, while mitigating the risk of failure. 

Having a loyal local customer base to rely on allows us to mitigate some of the risks associated with brick and mortar retail. We can capitalize on the momentum that we already have instead of starting from zero.

That strong customer base is also Kroft’s most impactful marketing channel. Knowing it would only improve their shopping experience, Dustin saw opening a retail store as a way to increase customer satisfaction and unsolicited referrals. “We’re lucky to have supportive customers who spread the word once they receive their first product from us. We have a great returning customer rate, and I think that’s a result of our investment in our product and our service pre- and post-purchase.” 

 

Finding the perfect commercial space 

With revenue at an all-time high, predictable cash flow, and more favorable leasing conditions than ever, Dustin knew it was time to act and use the lessons he learned from running a showroom to make Kroft’s first permanent store a success. 

Based on his past experience, he knew he wanted a location with foot traffic

“We used to have a showroom back in 2016, but it wasn’t in a particularly high traffic area. 'Out of sight, out of mind’ was how I would describe it,” says Dustin. “We had this great space and people who visited loved it, but the location was relatively hidden. That limited the number of folks who would discover our brand via our store.” 

Naturally, Dustin’s top criteria for Kroft’s permanent retail location was, well, its location: “I wanted a space that would see a lot of foot traffic and have as many eyeballs on it as possible.”

Inevitably, though, finding the perfect canvas to showcase your brand involves that je ne sais quoi.

“I wanted to make sure the space we chose would create an atmosphere and serve as a somewhat neutral backdrop,” Dustin explains. “I looked at a few spaces. The last place I walked into was an old salon with crazy wallpaper and it was a mess, but there was something about it. I thought the juxtaposition of our modern furniture with some of the space’s Victorian design elements could be a nice combination.”

Despite needing some cosmetic work, the retail space fit all Dustin’s criteria: it was in a great location, fit his budget, and had charm.

That feeling you get when you just know something feels right is hard to ignore. In Dustin’s case, he leaned into his intuition: “I’m sure other merchants may be more methodical with their approach, but I listened to my gut. When something feels right, you know.”

Our retail space is on a main street that has lots of foot traffic and is easy for people to get to. We’ll have good visibility, and Kroft can be a destination store in that area.

 

Nailing down the retail experience 

When it came time to bring Kroft’s retail experience to life, Dustin was clear on his vision and what he wanted to accomplish. “Conceptually, I already have an idea of what I want to do,” he says. “When I started Kroft, I had this dream of having a retail space that interfaced with a workshop through a glass wall. The idea was to share our passion for our craft and let people in on the process of making furniture.” 

At its core, showcasing the process of making furniture gives shoppers an admiration for the care and precision that goes into Kroft products. “I think sometimes there can be a disconnect or lack of knowledge about what actually goes into producing furniture. Part of what makes our products special is that we manufacture our own products,” Dustin says. “I wanted our store to take customers behind the scenes and show them how we make Kroft furniture—from how we source raw lumber to how we transform it into an assembled good.” 

Giving customers a behind-the-scenes look at how Kroft builds furniture wasn’t a marketing play, though. It comes from Dustin’s desire to share his respect for craftsmanship with consumers. “I want to tell that story and build an appreciation for the craftsmanship and care that goes into making our products. I guess it’s my way of honoring and respecting my love for the craft and sharing that love with as many people as I can.” 

 

Getting set up for success with Shopify POS 

Choosing a POS system can feel daunting for merchants coming from an ecommerce background. What is it? How does it work? What features do you need for your current and future needs?

The answer isn’t always straightforward, but for Dustin, feedback from a fellow merchant (and an impromptu demo) was enough for him to choose Shopify POS. “I asked a few questions about Shopify to learn how the POS works, and the store owner gave me a live demo. It looked so easy to operate. I basically learned how to use the system in five minutes,” explains Dustin.

As the store’s To Do list piled up, it was relieving to know that the most important of them all—the POS—could be effectively managed through software we were already using. Shopify unifies our online store and the POS system in a beautiful and intuitive way.

While other POS systems required lengthy set ups and integrations, Dustin appreciated that Shopify POS connected to his Shopify store without any APIs. “I can set up Shopify POS in 10 minutes and it’ll already be synced with my Shopify online store’s inventory. I’m kind of blown away at how little I have to do to start transacting at the store.” 

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The perks of in-person experiences 

For Dustin, owning an in-person touchpoint helps him gather customer feedback and improve Kroft’s product line. That qualitative feedback helps counterbalance the numbers he sees in Shopify’s sales reports and helps Dustin add to his product line without having to invest too much into the cost of goods sold

“When I think of a retail store, its value isn’t strictly transactional. It’s also a great place to learn about what your customers like. I love that we can put new experimental designs on the sales floor and see how people respond and react to them. We can experiment and get feedback so much quicker with less risk.”

Having a retail store also ensures Kroft can own the customer experience. While retail spaces were not traditionally part of the direct-to-consumer playbook, owning in-person experiences helps Kroft cut down on shipping costs, offer shoppers diverse fulfillment options, and ultimately serve them better. 

“Our retail store removes a lot of design restrictions around larger items. With in-store pickup, we can design and sell a series of products that don’t need to ship to California, which helps us be more economical with our order fulfillment for bigger, higher price point items.” 

Along with store pickup, Kroft also uses Shopify to offer ship-to-customer order fulfillment. “With Shopify POS Pro I can take orders in-store, fulfill the order from our warehouse, and ship the order directly to customers,” Dustin says. “That’s huge for us because we’re not always going to have stock on hand—especially for larger items that take up a lot of space in our backstore—but can still transact in-store and offer customers next-day delivery.” 

💡 PRO TIP: Ship-to-customer order fulfillment is the easiest way to turn your store into a showroom. Rather than being limited to selling products you have in stock, you can sell products in-store and ship them to customers from your warehouse or another store location that has inventory.

 

Building community through physical retail 

Opening a retail store marks a new chapter in Kroft’s growth. While that’s certainly an achievement for Dustin, his motivations for opening a retail store are equally anchored in community as they are in business growth.

I wanted to connect with our community directly, and establishing a physical space where we could showcase our products, host exhibitions and events, and support other local makers was a great way to bridge that gap.

Opening its first retail location gives Kroft virtually limitless opportunities to bring people together who share a passion for craftsmanship. “Having an owned space just gives us more room to be creative and build community around a shared appreciation for thoughtfully crafted home goods” says Dustin.

Indeed, outside of increasing brand advocacy and revenue, perhaps the most enduring benefit of owned physical spaces is the ability to bring like-minded folks together, with your brand acting as the catalyst for those connections. 

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