Online furniture retailer Temple & Webster says it will claw its way towards profitability through courting millennial shoppers who are ready to graduate to better-styled furniture.
Co-founder and chief executive Mark Coulter tells SmartCompany the business will be able to realise a profit in the near future, having narrowed its half-year loss from $5.4 million in 2016-17 to just $900,000 in the first half of 2018.
Revenue hit $34.4 million in the first half of the year, while operating costs dropped from $19.2 million in 2016-17 to $16 million in the first six months of this year.
The business says it’s been able to cut operating costs 17% year-on-year, but Coulter says the real key to success for the Smart50 alumnus going forward is understanding the needs of the company’s core customers.
“At the end of the day, if you don’t have a really clear vision, everything else is just noise. It’s making sure to be that source of inspiration and services,” Coulter says.
Temple & Webster says it will be looking to provide that inspiration to the newly-emerging millennial home-owner or long-term renter, who is moving cheap flat pack furniture and wanting to take more control over their homes.
“When you get a bit older, priorities become inside the home,” Coulter says.
“The whole experience of Temple & Webster is ‘come to us, we will make your home more beautiful’. We’re not Ikea, but we’re not a really expensive store also.”
It’s been a big year for Australian retail with the official launch of Amazon Australia, but Coulter says the company is happy to play in a different space to the Amazons of the world.
“With Amazon to date, we haven’t seen much in our categories, it isn’t strongly known for furniture or its homewares,” he observes.
Coulter says it’s a case of “do what you do well, and let Amazon do what it does well.”
Meanwhile, Temple & Webster has doubled down on its content strategy, aiming to become more of a “one-stop shop” for those looking to overhaul their spaces, maybe for the first time.
“It’s not only having exclusive products and more beautiful ranges, but about having things like free design,” Coulter says.
“We have been taught how important content is, and how you engage an audience is through editorial, through video.”
One piece of that strategy is the company’s “Style School”, which offers online interior design courses for around the $200 mark.
The company told shareholders at a half-year results presentation this week that is on track to reach profitability at the end of 2018.
For Coulter, the next 12 months is about brand awareness, highlighting that if most Australians come to know the brand as a go-to for all homewares needs, “that’s my job done for a while”.
“‘One stop shop’ is not a bad phrase, we do want to be known for ‘whatever you need for your home, come to us’.”