In 2013, Stephen Jones established online furniture marketplace Furniture Exchange, fuelled by a frustration there was no catch-all solution for listing, purchasing, and researching furniture online. Soon after the launch, he merged with Carlinea Williamson, founder of a similar business called Reno Exchange.
Today. the two are the joint chief executives of what’s now known as House of Home, an online marketplace that offers thousands of products from more than 400 local Australian retailers and boasts annual revenue of more than $4 million.
The two have put a focus on supporting local businesses and standing up to bigger players like Amazon and Ikea, offering a full ecosystem to local retailers with guidance, support, and networking opportunities.
Although there’s some way to go until Jones reaches his goal of running a top 50 ASX-listed company, he sat down with SmartCompany to explain how he’s taking it one step at a time.
Initially, there were two businesses that were both founded in 2013 — Furniture Exchange and Reno Exchange. We merged in 2015 on the simple principle that one plus one could equal 10.
My background is in accounting, as I was trained at KPMG and worked overseas with various banks including Credit Suisse.
It was a combination of two events back in 2012 that brought me here. I opened a paper at work and saw that my old friend and BikeExchange founder Jason Wyatt had taken out the Telstra Business of the Year award.
At the same time, we were expecting a second child, and I was spending every weekend being hauled up and down Church St looking for furniture and I thought there had to be a better way. It’s easy to find a house, a car, or event a bike, so why isn’t it easy to find stuff for your home?
I’ve got loads of better things to do with my time rather than spend it all on buying things for my home. And it’s not just buying, it’s researching.
I had multiple tabs open on multiple websites, and I was thinking: “Why couldn’t there be one place that had everything listed and let me buy it how I wanted to?”.
I searched, and the solution didn’t exist. At the same time, Jason had created that exact solution for the bike world with the same technology, and here we are.
Working in the accounting world, my goal was to run a top 50 ASX-listed company. I was working for these top companies and I was well on my way to achieving these goals, but then I got thinking. Why not just create a top 50 ASX-listed company, and do it without all the bureaucracy that exists in the accounting space?
Today, House of Home generates over 5 million inquiries for our partnered retailers every month, and we’re growing month-on-month.
It’s about letting shoppers find the products they need for their home and letting them shop how they want to. It’s a key point of difference in a world where consumers are more empowered than ever before — we’re providing them with the choice they want.
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We’re putting a focus on the consumer and letting them decide how they want to buy. We don’t want to tell them there’s only one way they can buy; we’re being transparent and saying they can go online, in-store, or even email a retailer and buy it.
Right now we have 10 employees, with another one coming through the hiring process now. When the two businesses merged we had 16 staff, and we had to scale them back for efficiency reasons.
We’ve stabilised now, and we haven’t had any team turnover in the last 18 months. My hiring methodology is based on the employee’s attitude and talent; you can train talent, but you can’t train someone’s attitude.
The merger between my company and Carlinea’s company wasn’t a difficult decision, as both businesses were talking to the same consumer. Reno Exchange had all the renovation products, and I had all the furnishings.
Inevitably when someone does a renovation they need to fill the room afterwards, and through our own research, we found some people even renovate around a particular piece of furniture. It was about offering a better solution.
The merge enabled us to grow both retail members and consumers rapidly month-on-month, and we’re now hitting over 300,000 unique users every month.
When I first started in 2012, the majority of people [retailers] I spoke to had a standard marketing strategy. That strategy was to go to your local hardware store, buy a bucket of paint, and write ‘70% off’ on the window.
Now people have begun to understand the internet is the place to be. Consumers do their research online before they buy anything, and we’re seeing our e-commerce offerings grow each month.
The industry is deeply ingrained in more ‘traditional’ ways, but the conversations around e-commerce are better received today than they were four years ago. Retailers are now coming to us to join up, when back then we were doing a lot of knocking on doors.
I’m not in the business of running just a marketplace. I like to teach my team that we are in the business of growing the small retailers we work with and forming deep relationships with them around the whole ecosystem of their business.
We try and help deal with the full gamut of business problems, which small business operators don’t have the time or focus to deal with. We’re offering solutions, advice, and strategies to help them grow their business.
There are over 30,000 businesses in our industry across Australia, and out of those, 10% of them make up 80% of revenue.
The bigger players like Ikea or Freedom have big brand awareness. Some of those 30,000 retailers might be just around the corner from a customer but they would never know as the smaller retailers don’t have the power or resources to develop a marketing strategy that can compete against the bigger guys.
Joining a marketplace like ours provides a networking effect and lets smaller players compete on an equal level.
Players like Amazon will destroy more businesses than they help. Their insular focus is great for consumers, but what they do to businesses over the world is just erode margins.
Only 7% of total retail in Australia happens online, and while I have a keen interest to grow the e-commerce line, I have to protect the 93% of revenue that occurs in-store. That’s what pays the bills.
Price is no longer the sole point of what the consumer wants; that’s a prehistoric, pre-2008 approach. Price is a factor but more so is quality and convenience and relevance.
Right now for the business it’s about relevance, consistency, and patience. We could throw a huge amount of resources into growing our retailer base, but it’s hard to develop deep relationships in a short period of time. We prefer to onboard people properly.
The goal is still to run a top 50 ASX-listed company, but right now it’s one step at a time. To hit that goal we can’t be slack or lazy, we need to keep growing our consumer base and become the most relevant marketplace for all aspects of the home.
In the immediate future, we’re looking to shore up our position on the west coast, and the next thing on the horizon is to go international.
There are so many more businesses we want to help. Amazon is coming and it’s getting a hell of a lot of press, so we want to help SMEs navigate future pitfalls and opportunities together.
I’d encourage businesses to work off the principles of consistency, patience, and relevance.
Consistency is important in not only the message you’re sending to your customer, but the message you’re sending to your team. Without your team your business is nothing.
Patience is around getting through the days when you win and the days when you lose. Over a long period of time, the wins will reflect more than the losses.
Relevance is around understanding your consumer and staying as relevant to them as possible.