r. The company’s share price went down and management went through a few changes. What are your thoughts on last year and how has 2017 been tracking? MC: “I think when we go back to the original reason for the IPO, it’s still very solid. The reason for the IPO and the whole investment piece was e-commerce is a scale game – bigger is better.  Look all around the round world and you’ll see winners emerge in each category. There’s really only room for one or two big ones in the category and they take the lion’s share of the growth. Suppliers only want to work with a handful of people and customers only have headspace for brands they know. When you’re a certain size, you can invest more in technology, your team, the customer experience and delivery service. We always wanted Temple and Webster to outlast us, so we need it to be the biggest.  The thesis was to take Temple and Webster, which has beautiful curation and content; the Wayfair business, which has the world’s most advanced dropshipping platform and dropshipping business; and then Milan Direct, which has 10 years of importing furniture – put them all together and suddenly, you’ve got truly the best chance to be a dominant business. That’s the rationale and it still stands.  2016 was an interesting year, it was a challenging year. When I stepped in in April, I noticed a few things. One was that the thesis makes sense, but in practice, it’s really hard to run three businesses, three teams, three business models. There was a lot going on. The other thing I noticed was our marketing efforts weren’t delivering the same results they used to. We’d spent money in the wrong channels and our marketing needed some work. 2016 was really a year of focus. Rather than run three brands and three business models, we’ve collapsed it all under Temple and Webster. We consolidated Wayfair with Temple and Webster in April and Milan Direct in December, so we’re one consumer brand with one clear strategy. So now we’ve really set the business up to be that original thesis and we’re now living it. We are a player at scale, we have the biggest customer base with the best assets. Was it a challenging year to get there? Yes. Are we there yet? We’re still in that turnaround journey where we’re proving to the market and our investors and the market that the original thesis is still sound. We’re growing again, the last half year results were pretty good. The good thing about the results was we grew revenue while taking out costs. That’s a hard thing to do. Plus, we want to set up the business for the next growth rise. We have a lot of growth left in our main engine, which is being the online retailer in B2C. Only four to five per cent of sales is sold online, versus the US which is 11 per cent and the UK at 13-14 per cent. If nothing else, our market will grow. If we hold on, we will double and triple by just holding on. But we want to push ourselves. We are thinking about the next horizon of growth with things like showrooms, our trade and commercial division and online education. Those things will push us to the next horizon and truly make us a national household name.” IRW: How would you describe the competitive landscape for homewares retailers at the moment? MC: “I think firstly, it’s good for the consumer. The more competition and options, the better. For far too long, Australians didn’t have enough options for home and furniture. Your main options were Freedom, Harvey Norman and Fantastic. The industry needed to be shaken up. It’s been shaken up and that’s a good thing. How does that affect us? Temple and Webster is at the start of its migration from online to offline. We’ve had a lot of years of people starting to buy for their homes online, and people are becoming more familiar with the channel and buying more categories online and getting older. The oldest millennial or Gen Y is turning 35 – they’re coming into our core demographic. We’ve had years of them growing up [with online] – they’ve bought their fashion online and now they’re growing out of Ikea. Where the competition is really eating is that shift from offline to online. Where are we getting growth from? It’s not from other online retailers. The market is growing. The more competition, the more people looking for sofas online, the better it will be for us. We really want the market to grow. Lastly, how do we differentiate? Why are people shopping with us as opposed to our online competitors? The first point of difference is that inspirational content. We started with that in our DNA, we have the biggest styling and design team – we’re known for beautiful imagery and it’s a hard thing to replicate. Where we are now is we have the biggest range, we have 130,000 products on site. That is much bigger than anyone else in the sector – we’re bigger than our online competitors by five or six times. That is a clear distinction and competitive advantage and we have to tell everyone we have the biggest range – not a lot of people know that.” IRW: The Temple & Webster Styling School just launched recently. What was the thinking behind that? MC: “It’s about democratising design and styling advice. We wanted to make it accessible and not too expensive for people. Our vision is to deliver beautiful solutions, it’s about making you feel house proud, like you’re living in a beautiful environment.  But the problem with our category is it’s a bigger purchase, especially furniture, as opposed to fashion, which is much faster and cheaper. It has to last for awhile and as a result, it’s a more intimidating experience. Is it gonna fit? How do you put things together? You see it in a magazine and you go, ‘I could never do that!’ Part of why people come to us is for our content to make the inspiration accessible. For us, the next step is to go, ‘OK, we’re going to empower you so you can curate your own collections and choose how you put your looks together’ at a price point that’s affordable. $295. That’s for a month’s course, which is about 10 hours online. There’s a course date when there’s an intake, then you go through it ‘til the end date. It means people can share their projects at the same time with each other, post photos on Instagram and we have staff available for people to ask questions. It allows us to have some connection with that course. The first module was styling a living room, which we did in partnership with the Sydney Design School. It really steps you through the basics of styling all online, like how to establish a moodboard, how to put cushions together, how to arrange mantlepiece. We had our first intake in March and so far, so good. Feedback is great, everyone has loved it. We’re just about to launch the next course in the next month – hopefully May – which will be based on colour.” IRW: The democratisation of design for the home really began with Ikea and it’s something that I know you really aim to bring to customers at Temple and Webster. MC: “Four of us started Temple and Webster. None of us came from retail. We’re all digital first and foremost, and we all love the category. We knew the power of content – it engages audiences, there’s higher time on site and photography has to be fantastic. We knew the importance of words and headlines and stuff and we noticed that no-one was really doing homewares well. Homewares is emotional – you want your home to be beautiful. No-one was tapping into that, so we thought, ‘How do we do it online?’ We said OK, ‘Let’s use content to sell the product, as opposed to advertising. Let’s focus on that experience’. But really, from day one, it was always about ‘How do we get beautiful products and make mid-market Australian homes more beautiful?’ We weren’t pitching at the top end. It was always about great products at great prices. It was about the democratisation of design, so the education is that next evolution. If you think of Coco Republic, they’ve done a great job – it’s a beautiful brand with a good product selection, the interiors course is fantastic and they’ve got commercial staging and residential staging. It’s a really good business. High price point. What I like to think is that all those things that Coco does, Temple and Webster is the one to bring that to the mid-market.” IRW: You’re moving into physical retail now. Tell me about the trade show area that you’re planning to open in your St Peters head office in Sydney. MC: “We’ve dabbled a little bit with commercial orders in the past, but it was a decision midway through last year to invest in it. We brought on Lucy Sutherland, ex-general manager of the School of Colour and Design to run the trade and commercial division and put a team behind her. One part of it is the trade side of things, so interior designer and decorators, who do mostly residential projects and commercial clients, such as corporates and developers. We just did projects for the Sydney Football Stadium and Sydney Cricket Ground to provide not only design services, but also furniture behind it. We’ve got really big growth in terms of customers and orders and revenue. What we’re thinking of doing is using the front space as a trade showroom. If you’re a developer and you’re looking to sell your apartments with furniture, and you have good, better, best options for your living room, we can have our design consultants meet you plus have furniture delivered to our trade showroom, so you can sit on the couches and test them out. We’ll also have potential colourists there, and materials can be delivered too. I would love to do it within the next six months.” IRW: Do you see yourself opening a physical store for consumers, though? MC: “We have a Milan Direct pop-up in Melbourne at the moment. We’re in the process of re-branding that to Temple and Webster and that will be subject to council approval. It’ll be a clearance outlet initially to give us time to do a proper showroom and it’s useful having a clearance outlet for excess stock and returns. The plan for this year is to keep the Melbourne showroom as Temple and Webster, but we will trial everything. I don’t think consumers think in channels. Customers think in terms to needs…I think consumers will work out where they go based on their needs. I don’t think consumers think of in channels. Customers think in terms of needs. ‘I need a table, because I just moved’ or ‘I need a couch because my last mattress’ springs have gone’. Then they think channel. ‘What’s the most convenient option for me? Is it more convenient to go to the shops and do it or do I want to buy a sofa and sit on it?’ or ‘Actually, I’ve got three screaming kids and I don’t have time to go to a store’. Or ‘I don’t want to got a store and look through 10 showrooms to find the right coffee table. I want to look at 300 all at once’, which is what Temple and Webster has. ..I think consumers will work out where they go based on their needs. Our showroom’s strategy is important because if we really want to have the vision of being the first place Australians turn to when shopping for their homes, you have to be where customers are. I don’t think we need to have lots and lots of showrooms, because our main business will always be online. We don’t need lots and lots of showrooms to sell.  My vision is really to have one or two flagship stores by major metro area and with that, there’ll be a place where you can touch and feel, we’ll have design services and you can interact with our on-staff stylist and design help. It’ll be an outlet, so it’ll be an area where people can interact with our classes, design school, It will be much more about brand extension. It’ll never just be a showroom where it’s just full of product, we’ll do offline differently and it’ll be more about content and inspiration. That brand experience, which is not only good for brand awareness, but for interaction with customers, is important. With the pop-up store in Melbourne, it really is an experimental store. This year is all about trialling stuff. We’ll try the ranging and services, we’ll try what works to have a flagship store early next year. It’ll most likely be in Sydney or Melbourne.” IRW: You’re about to launch a gift registry too, isn’t it? MC: “We get a lot of requests for gift services. It’s that classic newlywed customer setting up their home. What we’re doing is making sure we have a strong Christmas offering and secondly, having the gift store and gift registry. We see that as part of establishing a connection with people at the right stage – people getting married, buying their first home together, kids’ bedrooms, new homes, moving. It’s important for us from that customer acquisition point of view. Wayfair in the US has set up a gift registry. Not only are they acquiring customers at their life stage, they’re also acquiring their friends and family as a back door into the brand. We like where we sit, because we have so much breadth and range. Our gift registry is going to soft launch in the next few months, just in time for spring wedding season.” IRW: A lot of online retailers are getting into modular furniture, especially retailers like Koala which offer mattress-in-the-box solutions for customers. What are your thoughts on that? MC: “We give it a lot of thought. Furniture now represents more than 50 per cent of our sales. It used to be 20 per cent. We’re a lot more focused on furniture now We do a lot more content around putting together a whole bedroom under $1,000 in our email campaigns. The thing with e-commerce is the ‘e’ bit is relatively easy – anyone can sell pixels, anyone can put up photos and content and get a website with Magento and off you go, you have an e-commerce store. The hard bit is the commerce and logistics bits. Post-sale is when the work really starts. You have to make sure the product gets to the customer on time, when the product gets there, it’s not broken, the quality’s right, the return path is OK and the customer experience is great. That’s the hard bit. With furniture, it’s even harder, because you can’t use Australia Post. The B2B couriers are still getting their heads around bulky. It’s still early days, so we’ve put together a patchwork of some couriers, some furniture removalists. It’s a patchwork solution. We do ship a lot of bulky – half our sales are bulky, so we can do it. Can the delivery experience be better, is there an opportunity for us and our partners to really improve the in-home service? Definitely. And it’s a big focus area for us for the next few years.”