Setting Up Houzz

There’s nothing quite like being knee-deep in a frustrating remodeling project to inspire a new business. Just ask Alon Cohen and his wife Adi Tatarko, co-founders of Palo Alto-based Houzz.

In the midst of a nightmare renovation, the two envisioned a network that would facilitate connections with professionals and provide a means to collaborate with designers. With nothing like that out there, the couple set up Houzz — a home remodeling website that debuted in February 2009. Today, just seven years later, Houzz has emerged as a global business with 40 million monthly users and over 1 million home design and renovation professionals.

Experts attribute a large measure of Houzz’ success to what’s been dubbed a “winning trifecta” — content, community and commerce. They point out that consumers rely on all three components when making purchasing decisions: content for inspiration and information, community for social validation and recommendations, and commerce for making the purchase.  

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See more insights from Retail’s Digital Summit: Check out the event recap.

At Retail’s Digital Summit, Shelly Palmer, managing partner at Palmer Advanced Media, chatted with Cohen, president and co-founder of Houzz, about how he and his wife have built the company, including the creation of interactive tools enabling homeowners to better visualize the end result and software that facilitates collaboration between customers, architects, carpenters and designers.

In the early years, Cohen says the platform was intended to link homeowners and professionals. There was plenty of content, particularly as participating vendors began providing guidebooks to help homeowners visualize rooms. However, in short order, Cohen began receiving calls and emails from shoppers looking to purchase a sofa, a bathroom vanity and any number of other items featured in the ever-growing photo bank.

“Back in the day, we just said ‘go buy it at whatever store.’ We hadn’t thought too much about the commerce piece. But the requests kept coming in and many were from far-reaching destinations,” Cohen explained. With an eye toward augmenting the customer experience, Houzz launched its marketplace platform in 2014. Today the site features 15,000 merchants selling more than 6 million products.

Houzz launched its marketplace platform in 2014. Today the site features 15,000 merchants selling more than 6 million products.

Some of the tools Houzz has created to assist shoppers include View My Room and Sketch. View My Room allows shoppers to experiment with home décor options by virtually placing products from the Houzz shop in a room before making a buying decision.

Sketch layers on additional possibilities for visualizing a project. Users start by taking a photo of their space (or selecting from the 11 million that already exist on the site) and annotate it in real time. Using a drawing feature, stickers and notes, homeowners can adjust and share photos, updating in real time and sharing the sketch across devices.

Palmer pointed out that while the spotlight tends to fall on the positive changes Houzz has created for consumers in the midst of a remodeling project, the site has also helped to reshape the arena for professionals too. There are more than 1 million experts who are active on the platform; those who use Houzz to facilitate a project report that it shortens the lifecycle by as much as six months.

Though Cohen acknowledges that not all shoppers are tech-savvy, he insists it’s imperative that Houzz continue to deploy technology solutions online and on mobile that provide shoppers with a more hands-on experience. “The home remodeling industry was really backward in comparison to other businesses. It needed an injection of technology and we’ve made that a key piece of our mission,” says Cohen.

Houzz President and co-founder Alon Cohen on the keynote stage at Retail’s Digital Summit.

Houzz President and co-founder Alon Cohen on the keynote stage at Retail’s Digital Summit.

Recently, Houzz opened its commerce application program interface to third-party developers. Cohen acknowledged the need for merchants to have a fast and seamless way to submit products, process orders and keep inventory up to date on the site. “The API helps us deliver that experience; it’s critical to success and scale,” says Cohen.

The area of growth consuming the lion’s share of Cohen’s time is international. Houzz currently has localized sites in Europe, Australia and Japan. While global expansion is a challenge for any business, Houzz is somewhat of a hybrid in that it needs to cultivate relationships with customers and professionals, and decipher the often unique rules and regulations that govern renovation projects in different countries.

What’s next? Just a few weeks ago, Houzz added another tool to its interactive portfolio with the launched of Visual Match — a service that uses a deep learning system to make it easier for shoppers to discover and buy the types of products and materials that inspire them in photos.

No wonder other online retailers have Houzz envy.

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