Temple and Webster is going to increase its already huge product range, with its chief executive saying “the more the merrier” as the furniture and homewares retailer bets big on online shopping, believing “touch and feel” in-store is overrated.
The company impressed on Wednesday with record first half revenue as customer numbers and spending grows.
Boss Mark Coulter said the business had “more than tripled in two years” despite Covid-related supply chain woes.
In an exclusive interview with NCA NewsWire, Mr Coulter said those problems were starting to resolve and because the retailer sourced from so many different factories, it had “a lot flexibility and substitution”.
Along with investors who made Temple and Webster one of the top gainers on the ASX on Wednesday, RBC Capital Markets analyst Wei-Weng Chen was impressed with the first half results, saying the second half should benefit from continued, encouraging housing and renovation market trends.
But RBC also believed there were threats posed by offline shopping as lockdowns ended, redirection of discretionary spending into travel with the easing of restrictions and, of course, those industry-wide supply chaxjmtzywin impacts on product range availability.
Mr Coulter said he was confident the move to online shopping – already well under way before the pandemic but accelerated by the health crisis – was permanent and not just among younger shoppers but all demographics.
He’s also comfortable being in part of the retail landscape that caters to a booming housing market and expects the company will continue to snatch market share away from its rivals.
“We can outcompete our competitors, invest more, have a better range and better service proposition – we will grow faster than them,” Mr Coulter said.
“Over the past 10 years, we’ve seen macro-economic trends come and go: property markets crash and go up, we’ve seen unemployment go up and down.
“All that time, though, we were able to grow because of the flight from offline to online.
“Yes, we’re expecting some of the consumer discretionary spend to move into other categories, but we also feel confident about our position, that we’re riding that wave.”
As to the potential for shoppers to go back to bricks-and-mortar stores, Mr Coulter said the convenience of shopping online and the value offered by e-commerce players passing on savings from not having to pay overheads trumped any benefit from seeing a product physically.
Shoppers were increasingly trusting Temple and Webster for those bigger furniture items, reassured by online reviews, he said.
“The average order value is going up and that’s partly a function of people buying bigger things: They are more comfortable buying things like sofas and more expensive sofas at that.”
Mr Coulter said the company had high growth in the home improvement category – items such as lighting and bathroom fixtures, and curtains.
Home office products, of course, went “through the roof” during the pandemic, Mr Coulter said.
“In the last while, however, our category mix looks very similar to what it did historically,” he said.
“We’re very big on bedroom furniture, living room furniture and dining room furniture, but we sell a lot of rugs, a lot of lighting.”
Mr Coulter said Temple and Webster offered products in all categories of the home but there were gaps that would be filled.
It had only dabbled in the children’s and baby room products but it was a big market so more was on the cards.
“I get a lot of men, I have to say, it’s usually men say ‘isn’t there a point where there’s too many (products?)’. My answer is customers, if you’re looking for something, you will look through hundreds and hundreds of items before you find the one and go ‘that’s it’.
“The more options the merrier, as long as they’re all great quality and meet our standards.”
