John Foley, former CEO of Peloton, shares his new venture Ernesta, a DTC rug company aiming to disrupt the high-end rug market. He discusses balancing direct-to-consumer sales with engaging the interior design trade and the strategic importance of their new Manhattan showroom. This episode offers valuable insights into launching a premium DTC brand, navigating established industries, and building community around a physical product.
Key takeaways
Ernesta's strategy of opening a physical showroom in Manhattan highlights the importance of omnichannel retail even for DTC brands, especially for high-consideration products like rugs where tactile experience is crucial.
The company is actively learning to bridge the gap between B2C (familiar from Peloton) and B2B (interior designers), indicating the need for flexible go-to-market strategies when expanding into new customer segments.
Foley emphasizes building a 'product experience community' online for customers to share designs, demonstrating how UGC and community can be leveraged for brand building and customer engagement in home decor.
Ernesta aims to emulate The Shade Store’s 50/50 consumer-to-trade sales split, offering a tangible business model inspiration for brands looking to serve both individual customers and professional channels.
The episode underscores the founder’s pivot from a high-growth tech company to a more traditional product, illustrating the transferability of entrepreneurial skills and the pursuit of personal passion in new ventures.
John Foley may be best known as the founder and former CEO of Peloton, but it turns out interior design is his real passion.
"I've been passionate about rugs for decades," he said on the Modern Retail Podcast. "I love design, I love spaces."
This was all said to explain why he launched a rug company. Ernesta is a direct-to-consumer brand selling higher-end rugs. It launched in September of last year and just opened its first showroom in Manhattan last month.
"Now I'm addicted to you know those super high-end custom rugs," he said. "And we're trying to bring them now to both interior designers and to consumers at a price point that most people can't afford."
Ernesta is still in its early days, but Foley said the business is growing and gaining a name for itself. As he described it, the hope is for Ernesta to do for rugs what The Shade Store did for curtains. He even sees Ernesta's business model looking similar to it. "[The Shade store is] right around 50/50, selling to consumers and selling to trade. So we believe we're going to be right in that zone," he said.
Still, the company is very young and still has a lot of learning to do. The biggest lesson thus far is figuring out how best to tap the vast and opaque world of interior design. While customers can buy their rugs directly from its site or store, Foley is also hoping to becoming a trusted partner to designers and firms.
"My team and I come from the consumer world, and so we understand consumers a lot more than we understand interior designers and the trade," he said. "So we're learning our way into it."
Now, with the first store open, Ernesta is hoping to see how well it helps grow sales -- and eventually continue building the business from there. The company is also planning on launching an online platform for customers to share their own designs and interior layouts in the hopes of inspiring others.
"We're building this scaffolding -- this product experience community -- onto Ernesta, he said. "And I think i
Frequently asked about this episode
What does this episode say about dtc strategy?
Ernesta's strategy of opening a physical showroom in Manhattan highlights the importance of omnichannel retail even for DTC brands, especially for high-consideration products like rugs where tactile experience is crucial.
What does this episode say about retail & omnichannel?
The company is actively learning to bridge the gap between B2C (familiar from Peloton) and B2B (interior designers), indicating the need for flexible go-to-market strategies when expanding into new customer segments.
What does this episode say about brand & content?
Foley emphasizes building a 'product experience community' online for customers to share designs, demonstrating how UGC and community can be leveraged for brand building and customer engagement in home decor.
What does this episode say about founder & leadership?
Ernesta aims to emulate The Shade Store’s 50/50 consumer-to-trade sales split, offering a tangible business model inspiration for brands looking to serve both individual customers and professional channels.
What does this episode say about dtc strategy?
The episode underscores the founder’s pivot from a high-growth tech company to a more traditional product, illustrating the transferability of entrepreneurial skills and the pursuit of personal passion in new ventures.
