The coronavirus pandemic has fueled a boom in buying and selling everything online. It started with people hoarding household necessities from Amazon and Walmart, followed by the rise of online food delivery and clothes shopping. And as lockdown dragged on, the trend inevitably bled into luxury, traditionally believed to be the last retail frontier e-commerce has to conquer.
The online antique and collectibles marketplace 1stdibs bet on the shift early. Started in 2000 with the vision of bringing the magic of the Paris flea market online, the company is built on the risky premise of taking an exclusive, experience-oriented business to the wide-open internet. That strategy has yet to turn a profit, but it certainly worked wonders during the pandemic; sales soared as competitors’ physical stores shuttered, while supply chains weren’t disrupted as badly as other retailers because half of its products—vintage and antique furniture—already existed and didn’t require manufacturing.
“COVID pulled forward a decade worth of digital adoption. I do believe that the change is here to stay,” 1stdibs CEO David Rosenblatt told Observer in an interview recently.
1stdibs closed 2020 with $343 million in gross sales and $81 million in net revenue, a decent 15 percent jump from the previous year.
Business was in part driven by a pandemic-fueled housing boom. “There’s a lot of activities in the real estate market. Whenever people buy new homes, they have to furnish them,” Rosenblatt said. “That drives demand for furniture. We felt that in both our contemporary design business and the vintage and antique furniture business.”
Contemporary design furniture, along with the newly added art and jewelry categories, saw the strongest demand. Between March 2020 and August 2020, 1stdibs sold 8,000 pieces of original art, including a few expensive rare finds, such as Apple from Ads F&S II.139” by Andy Warhol and Blame Game by KAWS.
Earlier this month, 1stdibs went public on Nasdaq and raised more than $115 million in fresh funding. The company’s focus on a relatively small, but loyal, customer base, drew some analysts to compare it with Etsy, which went public in 2015. “It feels that the company is trying to be unique in terms of its seller offerings, more or less a niche player like Etsy,” reported Seeking Alpha in an IPO analysis last week.
“Our business models share some similarities in a sense that we are both marketplaces for one-of-a-kind products,” Rosenblatt said of the comparison. “But we exist in very different parts of the market.”
1stdibs only has 58,000 active users. But they are extremely valuable ones by e-commerce standards. In 2020, an average user spent $5,500 on the site. The average order was worth $2,500, which is 24 times greater than the industry average, according to IRP Commerce.
Rosenblatt declined to put a number on specific revenue or profit targets. “There’s no company that looks like us in a sense of being a multi-category, completely digitally driven luxury marketplace,” he said. “The market we are in is about $129 billion. COVID has catalyzed the digital shift in buying and selling in this market. So, when you put all that together, we have a really long runway ahead of us.”