Mark Coulter: It’s going to be great. We were fortunate enough to have a business model that could continue and thrive during lockdown because people weren’t going into stores, but we were also in a category that became even more important as people were working from home. It was a perfect storm in terms of a business model.
We’ve got all these people who, for the first time, experienced online shopping quite regularly. Now we’re going into a year that hopefully looks a bit more normal with vaccines, but those new habits have formed. I’m not expecting people to become online shoppers for the rest of their lives and never go into a store again. I think a store serves a purpose for different categories at certain times. If I need batteries now because something’s broken, I will go into a store and buy them. But if I’m buying batteries because I need some in my pantry, then I can order it from Amazon.
It’s the same in our category. Sometimes people do want to get into a car, go to a shop and touch and feel. And other times, they’re actually looking for more value and convenience [online]. What’s interesting is that going forward… it’s in [people’s] minds. Do I really need to go to a store, or can I do it at home? That’s different and it’s a permanent change. It feels like we’ve been talking about it for years, but now, e-commerce is here. It’s not a trend anymore. People are looking at Kogan or Adore Beauty’s sales and profit numbers. From a financial point of view, there was a lot of doubt whether e-commerce companies could be profitable, but what the past 12 months have shown is they can be quite profitable.
IR: Last year, furniture and homewares had a big uptick in sales all over the globe. Where do you see the category going in the future?
MC: What the past 12 months have done is made Australian offline furniture retailers take online more seriously and close the distance between themselves and their international peers. If you look at the UK and US, furniture retailers have been pushing online for a long time and doing much better than Australian retailers, which have been dragging their heels a bit.
But last year, [local retailers] said, “We can’t do that anymore,” and they’re lifting their game. Ironically, that’s quite good for us. We’re still a small part of the total market. Last year, we did $175 million in sales in a $15 billion market. We’re a tiny part of the market. If we want e-commerce penetration to go from 5-10 to 20,30,40 per cent, it’s going to take all those offline players to tell their customers to shop online.
IR: Internationally speaking, what’s the furniture category like?
MC: The penetration of online furniture is much higher in the US and UK, and they’re significantly ahead of us. My philosophy is because the omnichannel retailers have been pushing online retail for much longer, they’ve been educating the market. Then within those markets, you have leaders like Wayfair in the US, which is the leading retailer in the world, which we model ourselves on. They’re the biggest retailer of furniture in the US fullstop. They’re bigger than Ikea, Williams-Sonoma and Ashley Furniture, which is the equivalent of Harvey Norman. It gives you a flavour of where Australia will go and we’ve quite publicly said we want to be the biggest furniture retailer in Australia, bigger than the offline guys.
IR: And you think you can do that without offline?
MC: Wayfair doesn’t have a store, so it has been proven! The Iconic will be bigger than the department stores and they don’t have stores. Kogan will be bigger than the discount department stores. Online retailers will be bigger than their offline peers. Everyone is in our market, whereas an offline retailer only has the people in their catchment area. They need a store near every person to cover the national footprint.
IR: What are your plans this year for Temple & Webster?
MC: From a range perspective, we’re increasing private labels, importing more products, manufacturing locally and doing more made-to-order.
We’re excited about the interesting intersection of inspiration, technology and solving the challenge of making your home beautiful. We’re testing an AI interior design tool, so when you’re looking at a product, it will suggest others to complete a whole look. Then you can swap products in and out and change the colour scheme like a virtual interior designer. We’ll also have more video, like product and inspiration videos, so going deeper into content tools in terms of inspiration.
Interestingly, one of the learnings from lockdown is that people were at home to receive their orders, so it was a good customer experience. We want to replicate that this year. We’re working with our crew so we can identify the first after-hours bulky delivery product. That way, customers can order [product] and have it delivered on the weekend. But we have to develop that and work with a carrier. Australia Post has it for the smaller stuff, but no-one has it for the big stuff.
We also really want to have experts on our customer care team. So if you’re shopping for a lamp, you’ll speak to a lighting expert within customer care, as opposed to a textiles expert. So we’re really going to up the quality of service customers will get pro and post-sale.
IR: A lot of retailers started dabbling in virtual reality (VR) and augmented reality (AR) last year, but there has been criticism around how effective those initiatives are.
MC: To be fair, I don’t think anyone’s really done it well. I don’t think the criticism should be aimed at VR and AR, I think it should be aimed at the implementation of the technology.
IR: Where do you think it’s going wrong?
MC: The actual models themselves can look quite clunky, so they can look a bit fake. That’s down to the quality of the actual models. We’ve spent the past six months developing our processes to have the right models. You have to take it that seriously. So firstly, people are getting it wrong with models, they’re getting it done quickly, then they just whack it up.
The second thing where it goes wrong is the actual use case. I think there are lots and lots of uses for 3D models beyond just seeing a product in your house. The AI design tool uses 3D models, it’s generating lifestyle images so it can have different looks across the entire catalogue of all our products.
The ultimate job of an e-commerce company is to get a product you’re happy with into your home. But we’re selling pixels, so we’ll do anything we can to make those pixels seem more realistic and help people on their buying journey without touching and feeling. I just think the implementation of the technology’s been pretty shit.
Our philosophy with these things is sometimes it’s good to be first, sometimes it’s good not to be first and it’s good to just do it better. I think that with these applications, we’re very really in the life cycle and actually, it pays to take a bit of time and do it better than everybody else.
IR: Let’s switch gears. You’re a gay business leader. What’s that experience been like for you?
MC: There’s not that many of us, especially in the publicly-listed space, although the most famous one is [Qantas CEO] Alan Joyce. There are very few females as well. Traditionally, the corporate world across the whole spectrum has been a white, straight, male game. And like all cultures, it’s self-reinforcing, so you hire and promote people like you. Not because you’re a bad person, but because you can’t see it. It’s unconscious bias, you’re not even aware of it. You hire people who are like you, you hang out with people who are like you, you play golf with people who are like you, therefore you promote people like you, then those people become board members and they appoint CEOs who are like them.
I think from a personal leadership point of view, [being gay] is a strength. It’s a bit trite, but you do have a sense of empathy which I might not necessarily have if I was a straight main. Some might; my co-founders have a high EQ. Let’s put it this way: for me, things like empathy and inclusivity are probably elevated because of my background and who I am. It means that when I talk about one of our values being inclusive, people know I’m speaking authentically.
So when I say that gender is important, it means we need to make sure we’re not just ticking boxes. We’re creating a safe space where you can bring your authentic space to work, you don’t have to hide who you are. You can be someone who’s gay in the operations team and it’s not even a thing, as opposed to being in an ops team in another company where it’s a boy’s club.
From a culture point of view, I’m proud of the fact that we have quite a lot of gay, lesbian and bisexual staff, we have a couple of trans people offshore. From a gender point of view, 70 per cent of our staff are female.
Being gay makes my job easier because it means from a cultural point of view, people don’t have to worry about not being themselves to work, they can just work. Being a truly diverse and inclusive business definitely has business benefits, it’s not just warm and fuzziness.
From an external point of view, there’s definitely a pink ceiling, 100 per cent. One of the reasons I started Temple & Webster with my co-founders was because there aren’t many gay CEOs. In some ways, it can be easier to start a company than try to go up the ranks [as a gay man]. I’ve had a good run because I’ve always surrounded myself with people who have always been supportive. And I’m in an industry which is online retail and homos in furniture, it’s not like I’m running a mining company! [Laughs]. So in the grand scheme of things, it’s a relatively safe space!
It’s a mixed bag in terms of being gay in the corporate world, there are pros and cons, but in my case, the pros definitely outweigh the cons.
IR: Having said that, you’re also a white guy, so unless you specifically told people, they wouldn’t know you were gay.
MC: One hundred per cent. Everything is a double-edged sword. One of the benefits of being in a minority [like mine] is that you can hide it. But there have been a bunch of meetings that I’m sitting in where I’ve not talked about my personal life or my partner.
When you’re gay or lesbian, you have to come out all the time, every single day is another moment of, “I don’t have a wife or kids.” Then there are some times where you think you are missing out on a social connection to wider corporate Australia. My role as a publicly listed CEO is to not talk about myself, but the company.
But there are definitely moments where if I were straight, I would probably reveal more about myself. I benefit from being a white dude in the corporate world, it’s terrible and it shouldn’t happen. If I were trans or a non-white lesbian, I would have had a much rougher road. Would I be here today? I’m not sure. It’s something we need to work on as a society.
IR: Are you involved in the gay business community?
MC: I’ve done a bunch of things for gay business networks, I’ve spoken on panels and I mentor a few gay executives who are coming up and I am on the board of Equality Australia, an advocacy organisation which is tasked with making sure we keep progressing.
IR: What kind of advice would you offer managers in terms of supporting LGBTQIA staff?
MC: I think the most important thing is to create a safe environment, you don’t need to be your employees’ friend. You don’t need to know everything about their personal life. A straight person might not want to tell you all about their personal life either.
But in my experience, what most LGBTQIA people care about is that they can be their authentic self, participate when they want to, they’re not excluded, conversations aren’t on areas that are deliberately exclusive or potentially isolating and that there is a sense that when it comes to promotional opportunities, it’s a level playing field. If they can provide that sense of “I’ve got your back and you’re safe here that’s a huge step forward.
This story was originally published in the February edition of Inside Retail quarterly magazine.