Material Bank: A look at how this A&D sample expeditor and aggregator aims to reshape how designers access pitch materials for their clients - Nov 2020
By Meg Scarbrough
An online sample fulfillment service that provides overnight delivery to the architect and design community-conceptualized and owned Sandow Media, which publishes Interior Design and Metropolis-says it’s poised to change the landscape of the contract finishes business less than two years after launching.
Material Bank started in 2019, and in the time since, company leaders report that it has amassed thousands of architecture and design (A&D) members and hundreds of manufacturing partners, including makers of flooring, wallcoverings, paint and more for both residential and commercial projects.
Historically, A&D firms stock in-house libraries of samples, swatches and catalogs, which are used by designers to select finishes that are presented to clients. For client presentations, larger samples are needed to communicate the mastery behind the design. It takes time and effort to keep those inventories updated and organized. Material Bank seeks to remove that pain point, while at the same time improving the ordering process.
What makes the platform special, company leaders say, is that thanks to a partnership with FedEx, Material Bank can provide samples faster than any other service of its kind and shift the burden of shipping away from manufacturers. The company is the brainchild of Adam Sandow, founder and chairman of Sandow Media.
Farshid Tafazzoli, chief business officer at Material Bank, says the idea was born from a need Sandow recognized within the A&D community. Based on conversations and research with architects and designers, Tafazzoli says, it became clear that sampling can be a challenge. “Prior to Material Bank, you were ordering from seven different brands and would get seven different boxes; it was inefficient and slow and was hours of work,” Tafazzoli says, noting that samples would show up at different times and could be unpredictable.
With this new platform, a designer can receive orders the next day, the company says. And, Tafazzoli adds, with Material Bank, instead of getting different boxes, you can get all of your samples in one box. “You save time, you save energy. It’s like Christmas when you order something.”
The current location of Material Bank’s facility in Memphis, Tennessee is no accident; it’s less than three miles away from FedEx’ global shipping hub. And given its proximity, Tafazzoli says, “We have the single-latest cutoff time with FedEx in their entire system.” He credits the partnership with FedEx for Material Bank’s success.
Here are some of the flooring brands that have partnered with Material Bank.
For a full list, visit www.materialbank.com/partners.
Oriental Weavers Hospitality
HOW IT WORKS FOR DESIGNERS
Membership for architects and designers is free.
There are currently more than 40,000 members of Material Bank with a waiting list of thousands more, according to Laura Steele, vice president of business development for Sandow. Each potential user goes through a rigorous vetting process in which they must provide proof of recent projects, reference letters, website information and more. Tafazzoli says, “Think of it almost like a credit score.” They must also include information about the current project for which they are seeking samples as well as contact information.
He says 26% of those who register get rejected. “Usually those who get weeded out might be someone who is a real estate agent who likes to dabble in design part time. We want to ensure the integrity of the marketplace by bringing on the designers who are real and working on real projects, whether that’s high-end residential all the way through to the largest commercial projects that are taking place in the industry.”
The result is that Material Bank is now host to the who’s who of the A&D and corporate world, including Fortune 1000 and S&P 500 companies, Tafazzoli says. He adds that the process is currently manual but will be automated in the future.
Once approved, members have access to the entire catalog of samples. Tafazzoli says Material Bank’s appeal can be attributed to its Google-like search function that allows designers to narrow samples down to specific categories like geometric designs, abrasion counts and flammability certifications. He says aside from simplifying shipping, they’ve also improved the return process.
As the country shut down earlier this year under mandates from states and municipalities aimed at limiting the spread of COVID-19, architects and designers found themselves working from home, away from their libraries.
Across all business sectors, Internet activity and e-commerce skyrocketed as people sought solutions from home. Material Bank was no exception, and members of the A&D community began to flock to its online catalog. Says Tafazzoli, “We have been having record month after record month.”
Another piece has been the rollout of Material Desk, a tool within Material Bank that allows reps and brands to stay engaged with designers through the creation of virtual palettes. And in it, reps and brands can interact with designers by posting videos and making product suggestions. Tafazzoli says, “It’s become a tremendous way during the pandemic for the community to remain connected and for both sides of the community to build that relationship to a new level.”
HOW IT WORKS FOR MANUFACTURERS
Material Bank makes its money from the manufacturers.
For each sample that is ordered, Material Bank charges the manufacturer a flat fee. That fee allows up to five SKUs from a single manufacturer to be included in a box with an additional charge for more samples.
Some manufacturers already spend tens of millions of dollars each year on their sampling programs, but Tafazzoli contends Material Bank’s additional cost is a “tremendous” value to those suppliers. Each time a sample is requested, information gathered from the designer (name, contact information, project details) is sent to the manufacturer, whose reps can then reach out to that person directly. That information also provides Material Bank with quantifiable data like trends (such as colors or flooring types) as well as other information that the company says can be useful to manufacturers. Says Tafazzoli, “We gain a lot of intelligence on these projects,” adding that it provides manufacturers a transparent measure of return on investment.
But one concern is that the Material Bank-branded boxes could insulate the supplier’s own brand from the designer.
For smaller brands that lack the infrastructure and scale to operate successful sampling programs, Material Bank can level the playing field and potentially give them access to key decision-makers within design firms.
Material Bank’s partner list of 300 brands is evolving on a near-daily basis and includes major names like Mohawk and Tarkett in flooring and Sherwin-Williams in paint. Initially, the commercial sector was the focus of the platform, but residential now represents 30% of what Material Bank offers.
The list of flooring manufacturers that have started partnerships with the company also continues to grow with The Dixie Group, Engineered Floors, Novalis’ Ava, Mannington Commercial and HMTX’s Teknoflor among some of the more recent additions this year. Others, like Interface, including its Flor brand, are expected to come online soon.
“We are excited to be working with them and are impressed with the platform they are building,” says Jared Coffin, vice president of product management at The Dixie Group, which has already joined the startup company.
James Lesslie, president of the commercial division of Engineered Floors, says, “While our J+J Flooring and EF Contract sales reps will always be the best way for our customers to request and receive samples, we joined Material Bank to expand our sample distribution options and reach new markets.”
On the commercial contractor side, Fuse Alliance has also joined, and executive director Geoff Gordon expresses excitement about the program. “Our members will have the ability to collaborate with designers in developing color boards, recommending products and assisting with project budgeting,” he notes.
Forbes reports that the Material Bank start-up has raised $55 million since its inception.
The growth has been so rapid and its forecast so favorable, company leaders say, that Material Bank is expanding from its original 80,000-square-foot facility, which currently houses millions of individual samples, into a new one that spans a massive 400,000-square-foot area just a short distance away in Olive Branch, Mississippi. Tafazzoli says the staff has grown from four to 150 and is expected to reach 250 in under a year. To aid its relocation, the company will receive a $500,000 grant from the state of Mississippi, according to the Memphis Commercial Appeal. Material Bank remains mum about its future plans for expansion and what that could look like, but it could position itself against other companies like Tricycle, a Chattanooga, Tennessee-based company that is the industry’s leading provider of digital samples and floorcovering tools.
A key component of Material Bank’s business is its lineup of robotics that help warehouse employees on the floor collect and sort samples. On the expansion, Tafazzoli adds, “This is a new round of state-of-the-art investment and robotics unlike anything that this industry has ever seen. We are putting in tens of millions of dollars in infrastructure so that we can process transactions in seconds with robotics.” He credits Material Bank’s investor base, which includes Bain Capital Ventures, for providing the necessary support. Bain’s investment portfolio includes companies like LinkedIn and Vonage.
He adds that the new facility will bring on a number of value-added ancillary services. “We can do photography in this new location; we can print on demand,” he notes. “If you’re a rep and would like a catalog added to a particular order or a hundred catalogs sent to a showroom, they are printed on demand-no inventory, no waste-and shipped out right away.”
But the move also gives them space to expand in other areas, as well. Tafazzoli says that with lightning-speed sample delivery, manufacturers have begun to approach Material Bank and ask that they take over all of their sample business, a request they are fulfilling, though he declined to say which ones.
Material Bank isn’t the only company aiming to streamline the workflow between suppliers, designers and commercial contractors.
Chicago-based Spec Intel, established in 2017, is building software that manages material data, documents and sampling within the commercial flooring sector.
Co-founder and EVP of marketing Tom Ellis, formerly with Tarkett and Armstrong, says the purpose of Spec Intel isn’t to replace what the manufacturers are doing. In fact, he says manufacturers are doing a great job in their digital connection with designers already.
What this platform seeks to do is create a more efficient process that Ellis says can help eliminate hours of work throughout the chain, start to finish. He says the company went through 3,000 projects and their material lists and noted that 30% of the projects that general contractors and flooring contractors bid on had errors, which amounts to millions of dollars in rework in the construction industry each year. “Our objective is to be the block chain in the industry. ... We look at our platform at the beginning the process for block chain. It will create a material list, download specifications, images, and designers can send that information out. We want to make it streamlined.” And apart from the clerical side, he says the platform offers sampling, which is done by tapping directly into the manufacturer’s database. The platform, which Ellis co-founded with architect Jerry Freeman, currently houses 720,000 SKUs in its database, and Ellis says new features are being introduced each month. Those who use the service-A&D, manufacturers and contractors-will be assessed a fee.
Aside from eliminating errors, Ellis say Spec Intel will also save valuable time, estimating that people within the chain spend two to four hours per job clarifying information. “We’ve got customers that do 5,000 jobs a year. That math comes together pretty fast.” He says Spec Intel whittles that time down to minutes, which translates to money.
As Spec Intel looks toward launching, Ellis says they looking for “20 flooring contractors, 100 designers and three to four manufacturers” to come on board before the launch to make sure all of their needs have been addressed. He adds, “We are partners in the business, and our goal is to make everyone in the process profitable.”
Copyright 2020 Floor Focus
Related Topics:Engineered Floors, LLC, Fuse Alliance, Coverings, Mannington Mills, Novalis Innovative Flooring, Armstrong Flooring, Mohawk Industries, The Dixie Group, Crossville, Fuse, Tarkett, HMTX, Interface, Masland Carpets & Rugs