Milan Direct gears up for aggressive Australian expansion

octomedia

11th Nov 2015

Founder and CEO of Milan Direct, Dean Ramler, isn’t ruling out opening the online retailer’s first physical stores, as the business takes aim at its bricks and mortar rivals.

“It is not something we are going to rule out for next year because we consider ourselves not really a great online retailer, but just a great furniture retailer,” Ramler said.

According to an IbisWorld report released earlier this year, Milan Direct is the market leader in the online furniture space, with 10.1 per cent market share. Ramler said there is still room to grow online but the business also aims to match product and service of traditional furniture retailers.

“We consider our main competitors to be Freedom, Harvey Norman and the Fantastic Furnitures of the world, so we really compete with those bigger retailers and strive to match them on product and service, and hopefully take away a bit of their market share.”

To do that, Ramler said Milan Direct will “have to go offline” which will be a consideration in the new year.

Australian Made marketplace
Ramler said one of the company’s biggest wins in 2015 has been the launch of a dedicated section on the website for locally designed and made furniture and homewares. The Australian Made section showcases collections from top Australian companies and boutique designers, giving them the capability to promote their products to Milan Direct’s extensive customer base and social community.

Around 12 months ago, Milan Direct began reaching out to select Australian furniture designers to join the marketplace and since launch, the retailer has seen a 15 per cent jump in sales of local designers and the page is receiving 35 per cent more views than all other category pages.

“There is a real appetite for locally designed and made furniture, with consumers wanting to support and buy quality Australian products,” said Ramler. “Australian Made gives customers this access, while importantly supporting Australian industry, keeping local production alive.”

Milan Direct has enjoyed success from combining private label products with a marketplace to list, promote and sell products from other companies Australia-wide, similar to the model adopted by e-commerce giant, Amazon.

The company has exported the private label plus marketplace model to the UK business, which Ramler said is about 12 months behind the Australian business.

For now, there are no plans to enter any new international markets.

“We want to keep aggressively growing the Australian market and because of that we don’t want to stretch ourselves too thin by entering too many markets at the same time,” Ramler said.

“Saying that, down the track it is definitely a consideration but right now there is so much more room to grow in the Australian market, that will be our focus in the next year.”

Milan Direct is enjoying an ongoing expansion, from a niche furniture retailer when the company launched nine years ago, to ranging a broad selection of furniture with more than 15,000 SKUs available today.

“We really are growing as fast as we can, with the aim of giving our customers a much broader selection,” Ramler said.

Marketing spend
Heading into the all-important Christmas sales period, Milan Direct has allocated 95 per cent of its marketing budget to online channels.

Offline spend on TV commercials, billboards and magazines has been pared back as the business has found it difficult to determine how effective it is.

“Online is completely measurable, we know what every dollar is doing, whether it’s bringing a profit into the company or not,” Ramler said.

The inhouse Milan Direct marketing team analyse more than 100,000 keywords every day to judge whether it is performing or not, to ensure they are at least breaking even on each transaction.