Basil Karam: It was like literally driving down the freeway and changing tyres as we were going. It's one of those technologies when you show someone who's not exposed to it, you get that, oh, wow. And there's not too many things from a technology perspective from E commerce where you get wow. My only advice is don't be scared to have a vision, execute on that vision and make difficult decisions.
[Voiceover]: Welcome to Add to Cart, the podcast that Express delivers all you need to know in the fast moving world of e commerce. Every month, Nathan Bush from 12 High and an E commerce industry expert will share the news, research and insights that you need to know to keep you at the top of your game and of course, keep your customers adding to Cart.
Nathan Bush: Hello and welcome to Add to Cart. My name is Nathan Bush, host of Add to Cart and director at e commerce talent agency eSweet. Joining me today is Basil Karam. Basil is the CEO and the co founder of online homeware store Life Interiors. As with many in the homewares category, Life Interiors had an absolutely massive 2020, but they're on track for an even bigger 21. This is off the back of re platforming over to Shopify plus a really smart omnichannel setup that you're going to hear about, plus investment in technologies such as augmented reality and and artificial intelligence. Today, Bazzel shares the Life Interiors story. This includes how they started on ebay and started as a replica furniture company. It's a far cry from today where they're now one of Australia's leading furniture designers and retailers. Their next frontier a bhag of doing over $100 million online. Basil is at heart a technologist and it's fascinating to get his view on how to build an online business that can scale but also be unique. So thanks to our partners, Shopify plus and Signet. Here's our conversation with Basil Karam from Life Interiors. Basil Karam, welcome to ADD to cart.
Basil Karam: Thanks for having me.
Nathan Bush: Pleasure. Thank you for joining. We've had a few technical issues but we are here.
Nathan Bush: Thank you for your patience.
Nathan Bush: I am surprised at how relaxed you are looking given your last couple of months re platforming the website. How's that experience been for you?
Basil Karam: I think anyone who's gone through replatforming will tell you that it's always stressful. This is our second RE platforming. That was the first one was, if anyone remembers, in the good old day business Catalyst. We started off in the cloud and moved off into Magento and now from Magento into Shopify Plus. So as most People know in the E Commerce space these days, the E Commerce website is really sort of the tip of the iceberg and it really connects into every facet of the business as well. So it's those tentacles that really make it complicated. Re platforming initially was quite easy from where we were Business Catalyst into Magento because we hadn't invested in integration into ERP and all the other elements of the ecosystem. But moving from Magento to Shopify required a lot of time and effort and planning. So it was stressful. But we did manage some of the complexities by rolling out different elements of the business along the way. So Shopify plus allowed us to roll out the POS install, for example, before going live, which meant that we could test our IPASS integration into netsuite, which is our core erp. So we're able to do things along those lines to really, I guess, mitigate some of the risks along before you sort of flick that switch.
Nathan Bush: It's a scary moment. What was the reasons for you moving from Magento to Shopify plus for us?
Basil Karam: I guess I've always been someone who's focused on having a cloud first approach. At that time we obviously moved into Magento, which wasn't obviously cloud based and it was just really the complexities of really managing AWS and other third party hosting providers and the like. And we felt like we'd outgrown it. We were on Community Edition. We hadn't moved to enterprise. But at that point in time, with obviously Magento moving to End of Life, I'm not sure actually where the status is at the moment, but I've been in the game for a long time. So the End of Life came. Adobe bought them out and I had. I'd seen what happened when Adobe bought out Business Catalyst and I was a bit concerned that Magento might end up going down that route. It's not too dissimilar to the way Bronto was purchased by NetSuite and I think it was only a couple of months ago, sort of was End of Life as well. So. So all those things really combine to really get us to migrate to Shopify or Shopify Plus, I should say. And the rest is history.
Nathan Bush: Brilliant. And how long has Life Interiors been around for?
Basil Karam: We've been around for a little over 10 years. I think it's about 11 or 12 years now. I lose count. But we've been selling furniture online for over 10 years, so we're one of the first E commerce furniture providers to sell online. We'd started off on ebay, but we quickly decided that we wanted to set up a direct to consumer brand through our own e commerce platform. So we've an old hag when it comes to sort of the e commerce space but it has evolved a tremendous amount.
Nathan Bush: I was about to say you must have seen when you opened up that box of Shopify plus compared to what you were looking at in those early days. 11 or 12 years ago would just be completely different, right?
Basil Karam: Absolutely, absolutely. I mean at the time there was, it was Business Catalyst versus Shopify and I think I'd read a tech branch article and, and there was some guys in I think North Sydney who'd launched Business Catalyst. At the time it's like no, we'll support local. They bought some furniture for us as well. So I went down that path as a cloud based business and that was my background as well as a technologist and built cloud based businesses in the early 2000s as well. So it's very comfortable to go down that path as well. But yeah, it's, the challenges are different and some things have become a lot easier but it's just the playing field has increased and the fundamentals are really taken care of now with platforms like Shopify Plus. And it's now really the more exciting part of E commerce which really starts to differentiate one business from the next as opposed to just being able to take a payment online.
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Nathan Bush: So when you open up that Shopify box and you get the fundamentals in place, what's the focus area for yourself and Life Interiors to add on top of that fundamental experience?
Basil Karam: It's a really, really wide question
Nathan Bush: for
Basil Karam: us as a business obviously focusing on that user experience and really building out and understanding what that user journey is as well and really starting to differentiate our offering from other competitors around the user journey. And a key metric for us in the furniture space is what we refer to as share of home. So in an ideal world as opposed to say ltv which obviously tied directly into it was how many categories can someone purchase from us if they buy a sofa, can they buy a cushion if they Buy a sofa, can they buy a coffee table? They buy a bed, can they buy bedside tables? And slowly work with, slowly put systems in place where we can inspire customers and to make those incremental purchases over the course of them. Refreshing the house.
Nathan Bush: I can imagine that that must be a significant challenge for you in the furniture space, to be able to showcase and merchandise furniture effectively to one be able to help people achieve the task that they've come to you for, but also then to inspire them to upsell, cross sell. Where else can Life Interiors be part of your home?
Basil Karam: Yeah, correct. I mean, that's. I mean, we've far from nailed it. It's a work in progress and I don't expect to nail that experience for a long time because the shifts, I mean, obviously around Discovery Search is an important part of that and SearchSpring is a partner of ours we've had since we're on Magento. And for us around that discovery phase, we are investing in AI using AWS personalized to really start to recommend other items. And that's a work in progress at the moment. We expect to roll that out going into the year ahead as well. The other element as well, around inspiration and confidence, they sort of go a little bit hand in hand. We've started to play around with a couple of items around augmented reality and we've got a few items on the website, like the Panama bedside table, where you can experience what that item looks like and they're all the different components now that will set us apart from everywhere else and give people the confidence of styling an existing product that they have in their house with a new item that we have. And that could be from another retailer or ideal situation. Obviously both the products would be from Life Interiors, but that's part of inspiring someone by seeing that product in situ. Yeah. And giving them the confidence dimensionally and to see that product in the space that it's eventually going to be. They're all going to play pivotal roles in improving our conversion rate.
Nathan Bush: Absolutely.
Nathan Bush: We'll put a link to the Panama product as well in the show notes, if anyone wants to check that out. Has that become the AR side of it? Has it become a lot more mainstream or accessible since it's been able to be used in browser rather than just through applications or software?
Basil Karam: Yeah, I think it's a good question. We've been investing and looking at AR now for a couple of years and we're even close to making some strategic investments in some startups overseas because we've invested in startups like Tamando was a ship and aggregator. We invested in them several years ago because we could see a problem in the market they solved. I think when it comes to ar, I don't believe it's mainstream yet. But at the same time, we've been selling e Commerce for 10 years. E Commerce, selling furniture via E Commerce wasn't mainstream 10 years ago. It's getting some momentum now, but we think we're pretty close to where I think the tipping point is with the LIDAR scanners coming out on the iPhones and other phones. So I think we measure about 12 months away before we start to maybe 24. But we want to be on the front foot and make those investments now and be the market leader.
Nathan Bush: Absolutely. It's a common theme. We've heard it a couple of times through add to cart of businesses who are getting on the front foot of ar, not expecting to make an immediate return. But the returns that they're seeing at the moment are still good, they're solid. It's just not a high, highly used product. But when it does hit mainstream, they'll be ready.
Basil Karam: Yeah, definitely. I mean, you've got to have a. As a business leader, you've got to have a view. And our view is it's going to improve conversion rates and give people confidence and we want to set ourselves as a market so communicate to the business, to consumers, that we are a market leader and there are other tools out there that we will roll out to sort of communicate that as well. So it's pretty close. I think it's not too far away. It's one of those technologies when you show someone who's not exposed to it, you get that, oh, wow. And there's not too many things from a technology perspective from E Commerce where you get wow. Feedback from customers. So I think when they adopt it, not too dissimilar to QR codes. When they do adopt it, it will be an avalanche. We just want to be on the front foot because I do see constraints around the supplier producing those models and that is a bottleneck, I think, in the industry.
Nathan Bush: Yeah.
Basil Karam: So I think anyone that's thinking about getting on the front foot there is important and getting it cost you maybe a little bit more, but you'll get ahead of the curve. And I think that's important because things could blow out in terms of timeline.
Nathan Bush: Makes sense in terms of AR and obviously just being on Shopify plus. And I know Shopify putting a lot of effort into AR as well, but it's still fairly in the early stages Is your approach to try and get even further out ahead of Shopify plus and get something that's custom for your category and your business?
Basil Karam: Yes, definitely. I mean, at the moment the models are an asset and we treat them as an asset. We play in the medium to high end of the market as well, so we can afford to invest in creating those models. We don't play at the bottom end of the market when it comes to furniture. So for us, once we get, and this is sort of. You touched on this beforehand, some of the return on that investment, other lessons in terms of how people engage. Get that model there and then for us, once that's in place, actually build out on top of the Shopify experience. Because there are limitations with Shopify because you can only have a single AR model in the scene as opposed to having multiple models in a scene. So we can't actually physically style a space for you with multiple IR items. So there's sort of some limitations at the moment that we work around. But you never know. Shopify plus might actually solve that problem in the near future.
Nathan Bush: They might buy your technology off you. You've touched on it before around fulfillment and shipping and it continually being a challenge in Australia. It's obviously got better over the years. One of the things that I loved on your website is that you've introduced Quick Ship as a category to show customers what's currently in your Sydney warehouse. So that whereas they're browsing products, they can see the products that they can
Nathan Bush: expect reasonably to be at their door
Nathan Bush: within the next couple of days as opposed to those that may be out of stock or coming from international warehouses. That's a really smart move. And how's that paying off for you in terms of what you're seeing, customer behavior?
Basil Karam: Yeah, it's Quick Ship or I guess in stock items. I mean, we track through Google Analytics, I think they're referred to as custom attributes from memory or custom events. I can't recall the top of my head. But we actually track conversion rates based on the lead time on the page. So we actually can see how lead time or stock availability actually impacts through Google Analytics, the conversion rates. And so we definitely see a substantial uplift in conversion and it tapers off quite linearly over the course of sort of. So that six to eight week period before it sort of falls off a cliff. Because most people don't really want to wait more than eight weeks for furniture. So it is a balancing act because we are a self funded business. So we don't have an unlimited access to capital to invest a tremendous amount of furniture in our warehouses or in our warehouse I should say. So it is a balancing act between conversion and sell through rate as well. So that's just an ongoing tuggable but it definitely has a direct impact to
Nathan Bush: performance and I think it's just a nice message as well from a brand transparency perspective and setting expectations for customers upfront because it's such an important part of the process that shouldn't be left to the last part of the transaction.
Basil Karam: Yeah, no, definitely. And on that sort of quick ship and this is sort of ties into ecosystems and sort of the API world and how I believe E Commerce needs to sort of be transparent is as part of the. Coming back to the topic at the top in terms of the replatforming, we've now really tightly integrated into netsuite. We were tightly integrated, now really tightly integrated and what that means is our customers now get. And this was a challenge during COVID as well with changes in lead time. So we addressed that problem complete transparency across the entire supply chain. So what you see on the website now is directly related to what's in our erp and that also means we've solved for the problem of multi container. So if the first container gets sold out, we actually allocate stock from the next container. And it also means that as delays occur, we automate our communications to our customer to inform them where their product is in the supply chain and where it's actually been caught held up. So if it's left the port overseas or the Sydney port as well and that comes back down to supply chain transparency and over communicating that. That was a big project for us over the course of the last several months and it's really starting to pay dividends for the business and really pay dividends for the customer as well. Because now they kept. Not only are they seeing what's available, but they've been kept informed along the way and that's been a major milestone for us.
Nathan Bush: It's a really smart use of data and I know not easy to get right when you're talking about big erps all the way through to platforms and everything else it touches. Right. You didn't have to send any customer communication about stock that's stuck in an Egyptian canal digit.
Basil Karam: No, I think we have recently started import product from Europe first containers are I think just snuck through from memory. So no been fortunate enough but yeah in theory we would have said it's stuck here. But yeah, I'm glad they've released that bottle.
Nathan Bush: Brilliant.
Nathan Bush: I read that you have a strategy to have a physical store.
Nathan Bush: Obviously started out as an online retailer but now you've got a physical store in every state to drive your online business. Rather than the other way that we often see is that people having physical store and then going online, you've actually come the other way.
Nathan Bush: Is that true?
Basil Karam: Yeah, I mean, I guess the lessons there were seeded over 10 years ago. So when we were online initially and I think, I mean in roundabout numbers or generating about, excuse me, about $10,000 a month in sales and then we real, then we opened up this really small store in Piedmont in Sydney that was I think 60 or 70 square meters, so maybe the size of two car parking spots. I mean it was tiny and we're selling furniture from that space. It was like a sardine can. And what we realized is online sales, shop, roof and it went up by about 400%, so went from 10,000 to about $40,000 a month in sales. So and it's, it's once again it's just understanding, understanding your customer. And while we know e commerce is obviously growing at a rapid rate, the majority of our customers still interact in the physical world and do want to touch and feel. So it's not about the philosophy of it's one versus the other, it's how do you cost effectively interact with your customers and what is the best way to do that from their eyes. And for us we landed on a destination model. So you're not going to find us in Westfields or any of these big retail strips. You're going to have to drive to us historically in a warehouse there's a low cost, sort of a low cost environment. And where we are at the moment, Lilyfield and in Abbotsford, down in Melbourne, you're driving to us within, generally within that sort of 5, 6, 7k radius of the CBD. It's a pretty easy to get to and pretty central. But rents are cheaper and you're coming to us with a, with the intention to purchase after doing some research. So we have a very high conversion rate when people walk into store and that means we can resource accordingly because we're not really investing in people who are just sort of browsing. They're really coming in to execute. So it's allowed us to tailor that to us. And really also obviously brands like Google and the like who are obviously trying to converge channels together as well really start to leverage things like local inventory apps. So where consumers now can within 10Ks of our stores, search for bar stools or dining chairs and see if that inventory is actually in store. We're one of the first in Australia actually roll that out. And the funny story is Google actually sent out like third party consultants with tablets and they physically checked every item in our showroom and it was about a week before 30th of June. So it was like the running joke was we should have got them to do our stock tape because literally that's the. They actually came in to do that stuff. That was maybe three or four years ago. But once again it sort of comes into the power of using both channels effectively to drive people into store and ideally convert and have a really good user experience because obviously no one wants to come into store thinking an item's available to touch and feel and getting there and realizing it's not. And when you've got a sort of 3,000 SKUs available to us, transparently communicating information that's in our ERP into our digital marketing platforms like Google Shopping was complicated to do especially with things like Click.
Nathan Bush: Yeah. And have you figured out any magic formula for doing the online to offline attribution or offline to online? It feels like it's something that no one's cracked yet and everyone's approaching it in different ways.
Basil Karam: Yeah, a couple of things I guess with that is when you've enabled, I believe it's most probably part of local inventory ads. Google over the years started to open up Google store visit conversions and you're going to have to fact check or the audience is going to have to fact check this because over the years they had certain boundaries where you had to have X amount of stores or X amount of visitors obviously from a privacy perspective. But I think it's opened up a little bit more in terms of number of stores. It used to be 30, I think now I'm not sure if there is a store limit. So we've got that where obviously Google is using people who've signed into Google Maps and everything else walking into store. So we've got some metrics coming in that way. With Shopify plus as well, we're encouraging people, we're sending through draft orders to them so they're converting on their mobile phones in store as well. Which means we actually get, we actually fire off the conversion pixels that way. So as much as we can of pushing interactions into an online forum so they would have potentially clicked on an ad, we send them a draft order. They quickly buy with a one click purchase on their mobile phones or potentially on the way home and then we get all that Pixel data coming through in the last bit of the puzzle as well. And like I said, there's everything. You sort of got to weave it together. Sometimes it's just enough to get a good view. We send through our confirmation emails and thank you emails into online. We have this running with Magento. We haven't converted this functionality over into Shopify plus, where you, you have a thank you and you click on a button and it's a thank you page. And that thank you page fires off the pixel as well. And by doing that, we're really connecting the dots between where you've been and where you are, even if it's purely an offline transaction. So between those three techniques actually have a very good view of customers and everyone can roll that out on Shopify plus or outside of Shopify plus as well. So. Happy to answer any questions on LinkedIn.
Nathan Bush: No, I think that's great because none of those methods are assumption based. They're all scientific. Just on the draft orders, can you just explain a little bit more around from a customer experience, how the draft orders works?
Basil Karam: Yeah. So for us, a challenge that we had as a business, at least from our retail perspective is getting the number of quotes out to customers through NetSuite. That quoting process was cumbersome and it was obviously managed outside of our E commerce. So for us, one of the problems that we wanted to solve was really giving customers the ability to purchase, obviously if they've gone through Shopify beforehand and set up their things called Shop Pay or Shop now or something along those lines, really making that process as quick as possible from a drafter order, which is really quote, which we directly import into NetSuite. So those quotes that go through Shopify plus through our iPass, I have a running list of all those quotes sitting in netsuite as well. So from a customer's perspective, they're on the website. The plan is they're one click away from seeing that AR model if they need the assistance to convert and obviously chat with someone online as well, as well as all the other attributes we said. So that's how we've done it. It just means we've had an instance where someone was, I guess, illegally driving. But yeah, it was just a one click purchase. Didn't have to worry about doing anything else as opposed to going through a PDF quote process like most retailers.
Nathan Bush: It's very cool. And do you use that at all
Nathan Bush: for demand planning and looking at what might be coming up in terms of orders?
Basil Karam: Yeah, absolutely. I mean, for demand planning as part of our migration to the cloud and systematically moving stuff across with we launched the beginning of the year with AWS Forecast and all that data in terms of quotes, conversions and the like feeds into our inventory management solution, which is really powered by AWS Forecast. The answer is yes. So I mean for us it's either a quote hasn't converted, but there's still demand there. We also include things like page visits, add to cart signals and events. And that all goes into our machine learning model where we use that to forecast demand and also forecast missed opportunities as well because we don't have all the inventory we'd like all the time. So that gives us a really strong signal to feel confident placing orders that we wouldn't otherwise supply.
Nathan Bush: Australian brand Rolling Nation makes footwear that is lightweight and the favorites of suitcase stuffers around the globe. So when Rolling Nation wanted to put a greater focus on direct to consumer, they migrated to Shopify Plus. With integrations into Gorgeous for customer service, Smile for loyalty, Klaviyo for direct marketing and Okendo for customer reviews, Rollie Nation were able to deliver a site that was as lightweight as their shoes. They immediately achieved a 62% improvement in page speed, which contributed to a 3.5% increase in conversion. As Limp Bizkit would say, they're now rolling. Rollin.
Nathan Bush: Rollin.
Nathan Bush: To read more of Rollie Nation's story and to see other case studies, visit the customer sections on shopify.com au rolling
Nathan Bush: plus now you started life Interiors on
Nathan Bush: ebay, which is a world away from
Nathan Bush: what we were talking about just before. How do you see the marketplace environment now? It's obviously much broader and a lot more players. How do you see the marketplace today? Is it still an important channel for retailers?
Basil Karam: Yeah, I mean, I guess it depends on the retailer and their strategy. And our reliance on marketplaces has reduced over the years, which is measurally counterintuitive to quite a lot of people, obviously with the likes of Amazon and the like. And for us, having that direct to consumer brand was really important for us to differentiate our product offering and we supporting. I mean over the years we've supported at one point in time maybe four or five different marketplaces and automated them pretty well. But there is a cost in supporting multiple marketplaces and I don't share the belief of each incremental sale is you fight for it, especially for us anyway. I mean digital is such an important point of difference. It's such an important channel, I should say so for us they're less important than they've Historically been. And our experience with, I guess a pure marketplace being something like ebay would be different than I guess, what I would refer to some of these hybrid partners where I guess as a retailer, as a direct to consumer brand, unlike maybe someone who's like a Sony or a Sonos or like who really I guess own the brand. So for us, we invest in our product and the design of our product. But there are other businesses out there who want pure marketplaces and they're driven also by using your data to introduce a private label. Because the marketplace business is so cutthroat, it's very hard to have a, to establish a business on a 15% or a 10% margin product when the Google tax is also applied as well. The cost of acquisition is going up. So for them to be viable, we've been in a position where other brands have leveraged our data to import product that's very similar to what we have. So I would, my recommendation is go in there eyes wide open. Ebay is most probably the exception in the Australian marketplace. It's a pure marketplace. As far as I know, they don't import any private label at all. But a lot of other Australian marketplaces do. And just be conscious that in the day you are feeding them a lot of IP and you've got to ask yourself the question, is it better to go direct to consumer and invest in your own capabilities or not so. But on one last point, with marketplaces where they do play an important role for us, and we've been selling on marketplaces for probably about seven or eight years now, is it helps with inventory management and inventory life cycle. So we have automated all our integration with these partners. And if we find that some stock is not turning over as fast as we'd like, we actually enable them on these marketplaces and sell the product through those channels as well. So that keeps our business healthy from an inventory perspective.
Nathan Bush: And if you were starting Life Interiors Again today in 2021, would you start on marketplaces or would you go straight to a digital direct to consumer channel?
Basil Karam: I'd go direct digital consumer, yeah. Okay, depending on the category. But I would go direct digital consumer.
Nathan Bush: Yeah. And what's been great about our conversation so far is that I'm really getting a sense of how important it is for you to create a brand that's unique. Unique in the way that you set up your tech stack, how you use your data, the channels that you operate through. It's really all coming back to that competitive advantage. Which is funny because in the start I understand Life Interiors actually copied furniture design, effectively making replicas affordable for Australians. How was that transition from being a replica model to now being one of the leading design companies in furniture?
Basil Karam: I think, I mean, our background or my background's technology, so it wasn't really furniture, so to call us spade, but so for us, if you sort of take. If you sort of dial back 10 years, the E Commerce space, or I guess the confidence that people having to purchase E Commerce furniture online was really replica furniture. Brands like Matte Black, Milan Direct all got their start, really, to sell replica furniture online. There are other brands as well, but that were some of the main ones. Customers were comfortable, they knew the product, they knew the design. There was obviously a sense of, I'm getting a bargain as opposed to buying the original. But for us, the question, I guess, I mean, we wanted to, after a couple of years, we decided in the day two things. One, the ethics around it wasn't right. Two, to acquire great talent in the space meant that we had to have a business that was, I guess, in the eyes of our employees, something that we would be proud of, as opposed to simply focusing on the revenue. And we really pivoted away when the business was growing as well, which was a challenge because we didn't have the excess capital. So it was like literally driving down the freeway and changing tyres as we were. As we were going. So we started that process and what most people don't know is I think we're maybe about six months in the process where we decide, you know, what we're changing Tap completely in terms of where we're going. It's going to be a long journey. The difficult one, it could take a couple of years. And as we started it, our key supplier, which at the time was supplying Matt Blatt, and it was well over 50% of revenue, the business decided that they didn't want to supply us product anymore. So that was like, got to be joking. So obviously that sped up the speed of our migration. But even then we were looking at some of the replica stuff as well, because, I mean, we just couldn't move that fast. But lucky we'd already started that journey, we'd had the vision of where we wanted to get to. And what you're seeing at the moment with Life Interiors, really the seed of that was so maybe six or seven years ago, because we are now where we wanted to be. And my only advice is don't be scared to have a vision, execute on that vision and make difficult decisions, because if you don't make the difficult decisions and you know when it's right and you're wrong in the pit of your stomach, you don't want to be forced to make that decision because it just means you're on the back foot. So for us we're on the front foot, front foot and, and we're starting to reap the rewards of that by having a brand and product that are really unique in the market, really resonating with with our customers.
Nathan Bush: Absolutely. I can, I can attest to that myself. We're going through renovations at the moment and every time I look over to what's on my wife's phone, it's always a life interiors website. It's you've made a name for yourself, that's for sure. At least in our household. The what you mentioned in there was really interesting around capital and how to tight capital was especially in those early stages. Do you look at what's happening at the moment in E commerce and especially some of the investment that's going on? We've obviously seen brands like Adore Beauty, Booktopia, Temple and Webster have huge results but also huge capital raisings at the same time. How do you see the environment around capital investment in E commerce companies in Australia at the moment?
Basil Karam: Obviously, I mean the running commentary with COVID really is all it's done is really brought forward existing trends or fractured existing fault lines. So I think from that perspective that we definitely the E commerce industry has hit a particular tipping point and I think my personal view is the investment will continue and it will continue at a much fully at a rapid rate as businesses realize that they've been caught flat footed or they could potentially have dragged out that investment over a course of a few years and that includes investment in staff and technology and the like. And I think the Doors and the Temple, Temple and Websters of the world have capitalised on that trend and I think in our space you have brands like Barrosa who look like they've raised a pre IPO round and Koala Furniture looking like they're potentially going for the boards as well. So in our space there's a lot of activity to really capitalise on brands that have benefited out of the refocused attention on home and I think it's a $10 billion industry and retail is a huge industry in itself. If you sort of roll up again and the macro trends are only increasing and I think you'll find a brand will raise capital. They'll also give them the opportunity to right size as well, especially if they're brave enough to make some of those judgment calls and realign themselves with where the industry is going as opposed to the incremental growth of some of the traditional retailers.
Nathan Bush: Yeah.
Nathan Bush: And given Covid, it was such an explosion. But especially in your category. Right. The spending in home was phenomenal during then.
Nathan Bush: We also had great results from people
Nathan Bush: who, you might not call them digital natives, like the Harvey Normans of the world, who still came out with incredible results, even though they're not as far down the digital path as what you might be.
Nathan Bush: Is it hard to get a read
Nathan Bush: on what the category is doing when you're getting great results throughout everyone?
Basil Karam: Not really. I mean, as I sort of said beforehand, I mean, the category is large and the consumer, it's roughly a $10 billion market in our space and the average consumer still wants to interact through a physical store. That's not where the largest obviously delta and change is. And a business like us and sort of tying back into capital as well, being tight for someone like us, we really use that sort of Pareto principle. I mean, that sort of 8020 rule. And the question is, when you have to be resourceful, where do you put in your effort? And we always have to sort of focus on that 80%, I mean, where can we put in 20% of it? Get that 80% of return. Where can we put in that 20% of capital? Get that 8% upside. And for us, the market was a key beneficiary and brands like Nick Scarley and Harvey Norman and the like all had fantastic results. The question, I guess, for them and their shareholders is can they maintain them as other, I guess, digitally native brands like Life Interiors and Barosa and Mydyl and Temple and Webster, who are nimble and who are really aiming at the moment for the fastest growing component. Doesn't take much to really tip these other bigger established players over. So, yeah, everyone's winning at the moment, but it won't be like that for long as things start to normalise. And really the real big difference is the shift to E Comm, which is obviously the macro trend that us and your audience have been focused on leveraging for the last sort of several years or 10 years or longer in some cases.
Nathan Bush: Absolutely. It's going to be a fascinating 12 months. What is on the immediate horizon for yourself and the Life Interiors team moving forward?
Basil Karam: I guess for us, over the last 12 months we've made substantial investments in our team, the operation and the capacity and the capability of the operations and the team. Sorry. And for us, the real Big focus is maintaining our continuous growth. We've grown year on year over the last 10 years and we've got a BHAG of getting to $100 million in revenue. So for us we've definitely hit an inflection point. The market's hit an inflection point and we just really want to focus on scaling the business and obviously ensuring that the consumer is at the heart of scaling that as well. So we've made that investment so we don't disappoint as we scale. We don't have external shareholders so we can be a little bit more, I guess, focused and disciplined in our approach as well. And that's what the team's going to be focused on.
Nathan Bush: Brilliant, exciting times. Now, if anyone wants to get in touch and there's so much there, we could have gone down so many rabbit holes. If, if anyone wants to get in touch with you or the Life Interiors team, what's the best place to do so?
Basil Karam: Life Interiors team, obviously the website. If anyone's got any questions, I'm always happy to assist and help startups and I've always got time for people, especially if they're happy to have a quick chat on a Saturday as well. Just hit me up on LinkedIn. I'm more than happy to provide insight, dive a little bit deeper in any of the conversations that we had and yeah, more than happy to help out. Brilliant.
Nathan Bush: Basil, thank you so much for all you shared today. It's really generous. Loved hearing your experience of re platforming and everything else that goes around that and wish you all the best for the coming 12 months.
Basil Karam: Fantastic. Thank you so much.
Nathan Bush: I mentioned it in the episode, but
Nathan Bush: there were so many points in that
Nathan Bush: conversation where Basil talked about creating unique competitive advantages in his business. They've effectively created a moat that's enabled them to grow year after year after year for 10 years. So for example, while they've migrated over to a readily accessible and market leading platform in Shopify plus, Basil and the team have made sure that Life Interiors still offers a unique experience. Using things like data to give personalized recommendations, the use of augmented reality for real world situations, and their effort in showcasing products. But this uniqueness extends beyond the technology and beyond the platform to things like the way that they use stores to bring people online, the use of channels such as Pinterest and the custom designs of their products. This strategy around uniqueness means that Life Interiors can utilize cost effective platforms, but with features that can that can't easily be replicated. It's a really smart strategy to stay competitive, to give your customers what they want, and to keep that growth happening year after year. To finish up, I have three resources for you. Firstly, if you're a first time listener of Add to Cart and you want to stay up to date with new episodes, head over to addtocart.com and you can sign up for our weekly newsletter. We'll let you know every time a new episode drops, as well as giving you my three takeaways from each episode and a link to the transcripts so you can know that this is an episode that you want to dive straight into. Secondly, if you want a weekly roundup of the best e commerce case studies, tools and research, sign up to the High Five Friday newsletter which is delivered to inboxes at 8am every Friday morning. I read all the e commerce news and send you the bits that I think you can take action from. Sign up at 12 high 12h I g h.comau forward/high five and the last thing if you are looking to explore your next e commerce opportunity, head over to esweettalent.com we are a dedicated e commerce talent agency connecting the best e commerce talent with the fastest growing brands. Check it out. Sign up to the email and get in touch with me if you want
Nathan Bush: to discuss your next move.
Nathan Bush: Until next time, thanks for listening and keep those customers adding to cartoon.
