With Spoken, two retail newbies are exposing white labeling across furniture retailers

If you were on TikTok earlier this summer, you may remember the viral video from the Debt Collective asking: “What’s a scam that’s become so normalized that we don’t even realize it’s a scam anymore?”

A stitched response from lifestyle expert Preston Konrad called out white-labeled furniture products as a scam, and pointed users to a new website called Spoken that’s helping consumers identify the deceits—the video has racked up 12.9 million views. White labeling is a practice used across categories—from furniture to food—when retailers buy the same product from a third-party manufacturer but market it with different branding, prices, and often images.

• Those elements make them hard to track, but that might be changing, as tech founder Dane Hurtubise teamed up with friend Geoff Abraham last year to introduce Spoken.

Spoken was born out of a common furniture-assembly headache: that singular, elusive missing part. While moving to a new apartment last year, Spoken co-founder and CEO Hurtubise found that the missing part of the Urban Outfitters’ Kirby coffee table ($129) he bought wasn’t actually made by Urban Outfitters, but furniture manufacturer Sauder. A Google search for Sauder brought up the same piece of furniture from Home Depot—which, at the time, was sold there for “half the cost,” Hurtubise said.

“It turned out that everything that I already bought from Urban Outfitters, I could find at Home Depot or Walmart, but it was given the manufacturer name, not the name that Urban Outfitters gave it,” he said. “And that was kind of the genesis of the whole thing.”

Third-party crasher

Spoken debuted in November with 50 items Abraham and Hurtubise found on Urban Outfitters, Hurtubise said, and listing places where consumers could find the same pieces for less $$.

• For example, the Urban Outfitters Ciara Flower Vanity Stool ($139) is sold at Bed Bath & Beyond as Leah Velvet Upholstered Vanity Stool for $135, and at Walmart under the name Linon Seraphina Vanity Stool for $119.99.

Next, it started “codebreaking,” as Hurtubise put it, to map product data across other online furniture stores, introducing 40 “shops” for popular furniture sellers like Wayfair. Their “secret sauce” is that the website is updated by “both human and machine,” Hurtubise said. Prices for items on its site are automatically updated daily, but having that human element allows it to add new items that can’t always be found through Google, which Abraham noted on Reddit doesn’t include every link from Amazon and Wayfair. (Urban Outfitters and Wayfair did not return a request for comment.)

• Hurtubise and Abraham said the tech that they’re building will allow them to move beyond furniture: Home decor—think plates, silverware, and lamps—could be next.

Optical illusion: Part of this process is becoming savvy to the tactics some retailers may use to disguise white-labeled products. Ever notice that some e-commerce sites use CGI product images rather than photographs? Retailers sometimes do this, and will maybe add other images or words in an image’s background, to prevent consumers from reverse Google-image searching a product and finding it elsewhere for cheaper, Hurtubise noted.

New build: The founders didn’t have much experience in retail, a fact that Abraham said was actually a benefit. “I should be able to identify any given item everywhere that it’s sold. And that would really empower me as a consumer, as a buyer. But I think it’s a really radical idea for folks that have been in this space for a long time.”

• That “radical idea” has sparked consumer interest. Spoken now has over 100,000 monthly users, supported by “organic” viral moments on TikTok and Reddit, Abraham said.

“By having this agnostic approach as to what retailer you end up picking, it enables us to be in this space that no one else exists,” Hurtubise said.

• This approach also makes it harder for Spoken to make $$ (it hasn’t yet, but it received an undisclosed amount of funding from Y Combinator), largely because it’s wary that affiliate marketing with other retailers will cause it to “lose trust” with consumers, Hurtubise said.

White out: White labeling has been growing since the 1980s, and these products’ share of retailers' product mixes continues to rise, according to Christie Nordhielm, an adjunct professor at Georgetown University’s McDonough School of Business.

• A 2018 DataWeave study of 20,000 products across two furniture e-comm sites found that 71% of products were white-labeled, and 98.8% were priced differently between the sites.

“There’s an overall trend toward white-label products and toward people being more careful about evaluating the price-performance relationship,” she told us. “And then, of course, inflationary pressures just accelerate that growth of white-label products.”

• These products are cheaper to manufacture, and as younger generations become “increasingly cynical” and “really not as responsive” to advertising, she said, retailers are turning to them more.
• Wayfair, for example, had 80 “house brands” in 2019, which, according to Vox, are largely white-labled. That number grew to 124 this year, making up 72% of its US revenue.
• But not every furniture retailer is interested in white labeling: Maiden Home CEO Nidhi Kapur told Business of Home that the practice was a way to “shortcut the process” of scaling product assortment that could impact quality.

Even as consumers become more aware of this practice, they may stick to their favorite retailers for a certain “status item,” like a couch or buzzy hair tool, Nordhielm noted. But for more functional items, they’re willing to make the swap, and likely won’t look back.

“When inflation drops, you’ll find that people will still stick with the white-label products, because they’re cheaper, and they know that they’re the same,” she said.

+1: ICYWW, though they joked on Reddit that they were offered $$ to take down Spoken, Hurtubise and Abraham have yet to hear from any featured retailers on the site—yet.