Temple & Webster benefits from shifting holiday season in 1H20
Temple & Webster saw strong growth during the first half of FY20 with the shift of holiday spend into November ultimately benefiting the online furniture business.
Chief executive Mark Coulter said that the shift to earlier holiday purchases helped the business to meet delivery windows and ensure customers got their products before entertaining friends and family for the Christmas break.
“We’re not really a gift buying site but we have noticed we are benefiting from everyone buying in November,” Coulter said.
“We’re the site you come to get your house ready for Christmas, but the longer people leave it the harder it is for us to meet those delivery obligations. So the move to November has been beneficial for us.”
According to the business’ half year results revenue rose 50 per cent to $74.1 million, up from $49.4 million earning in the prior corresponding period which was largely driven by a 45 per cent increase in active customers.
Coulter attributed this to the business’ improvement in converting customers, as well as an uptick in the Australian housing market.
This revenue growth outpaced cost growth leading to EBITDA growing from $1 million to $2.3 million. Temple & Websters business-to-business trade and commercial division saw 75 per cent growth on the first half of the prior year.
Chief financial officer Mark Taylor said the results were “really pleasing” and set Temple & Webster up for a strong second half to the year – which has already seen revenue growth over 50 per cent.
Over the last six months the online furniture market was shaken up significantly with the administration and subsequent acquisition of Zanui and Mocha. According to Coulter the business is in a stronger position for the changes and is planning to focus further on its online channel.
During the half the business shut down its Melbourne pop-up store in order to better focus on the online channel. Coulter said while it was a distraction from the business’ core offer Temple & Webster hadn’t shut the door on physical retail entirely, and it would be taking lessons learned from the pop-up online.
“[At the pop-up], the customers that came in were largely looking at bigger items. It made us rethink how we are merchandising that stuff online,” Coulter said.
“And in-store customers liked speaking to people – having a human interaction. There’s something social about the way humans shop, so we’re trying to bring that to our digital offer.”
Temple & Webster is taking these lessons and putting them into a human stylist program – where customers will be able to get personalised advice about what would work for them.
Additionally, the business launched the beta release of the Temple & Webster mobile app, looking to strong examples of similar offers in its market, such as Wayfair, for proof that an online furniture app can work.
“It isn’t something 1 million people will download in the first month but it will improve over time. We’re interested to see what happens,” Coulter said.
“The first step is to make it seamless. To get the basics right and to make a content rich experience. The second step is to start adding more functionality.”
According to Coulter the business will experiment with visual search technology to allow customers to take a photo of an item and see what products are stocked that are similar.
Additionally Temple & Webster will explore augmented reality functionality within the app in the next year or so to let customers see items within their own home before purchase.
Moving forward the business will be reinvesting short term gains into key areas, such as technology & data; the development of its mobile app; it’s trade and commercial vertical; private label products; and logistics.