Milan Direct is considered the most prominent player in the local online household furniture sales market, according to research firm IBISWorld. CEO Dean Ramler explains how his business is managing its performance.
The report, ‘Online Household Furniture Sales in Australia’ was actually released in November last year, following up on a similar report that appeared in early 2013. Both reports highlight Milan Direct as the clear leader in the Australian space.
Further, IBISWorld’s research indicates that the online household furniture sales industry is forecast to grow by 22.3 percent to reach $297.5 million in 2013-14, demonstrating the size of the opportunity for retailers that are able to assert their dominance.
As such, Milan Direct’s future is looking bright. With a market share estimated at 9.9 percent, this pureplay retailer has been going from strength to strength, and it appears things are likely to remain that way. Closely followed by Temple & Webster with a marketshare of 9.2 percent, it certainly seems pureplay retailers have come into their own, with traditional stalwarts such as Harvey Norman (less than four percent marketshare) and IKEA (2.5 percent) trailing by a significant margin.
Top Five Retailers in Online Household Furniture by Marketshare:
- Milan Direct – 9.9%
- Temple & Webster – 9.2%
- Zanui – under 5%
- Matt Blatt – 4.7%
- Harvey Norman – under 4%
Dean Ramler, Founder and CEO of Milan Direct is proud of his business’ performance, noting that the IBISWorld ranking is just one success among many.
“We’re also celebrating our one millionth product dispatched as of January this year, along with some phenomenal growth figures continuing on from the holiday sales period,” Ramler says.
The entrepreneur tells us that not only is Milan Direct’s revenue up 110 percent year-on-year as of December 2013, so too is the website’s traffic, which is converting 44 percent higher than the previous holiday season. This trend towards growth appears to be continuing into 2014.
In order to achieve this growth in a highly competitive space, Milan Direct has had to continually evolve its offering, which Ramler tells us includes tweaking its marketing operations, product range and back end capabilities.
“Internally we continue to expand into adjacent product categories above and beyond those that Milan Direct has become known for,” he says. “As we keep expanding, new ranges quickly become accepted as part of the core and that gives us even more scope for further expansion. Most recently, we added ‘Adventure’ to our offering, a range that initially included camping furniture, but now we’ve expanded to include all kinds of outdoor gear.”
The retailer has also had an increasing focus on combining its own in-house branded products with world famous brands, including Alessi, Laguiole and Noritake. As such, the product range is having a marked effect on the way this company is investing in marketing.
“Around six months ago we stopped investing as much into print and outdoor advertising, moving that budget back into our digital marketing spend. There’s a very high likelihood this has helped fuel our growth in traffic and conversions, but more importantly we’ve been able to properly track and attribute that investment, which makes further campaign optimisation that much easier.
“We’re monitoring over 100,000 keywords everyday, pretty much on an hour-by-hour basis.”
While the bulk of this budget is directed through Google AdWords, Milan Direct has also been reaping the benefits of being a part of the Google Trusted Stores Beta initiative – but this also comes with its own concerns. Google’s benchmarks for an online retailer’s customer service levels and dispatch times are of utmost importance, so Ramler says the team have continued to reinvest in back end infrastructure.
“This may not result in big, obvious changes to what people can see from the front end, but we’ve still been able to make huge inroads on our back end. By creating a solution that allows us to input new products in very large batches, we’ve been able to assist our buying team greatly and made range expansion infinitely simpler. This has been integral to some of the growth we’ve been witnessing.”
These kinds of initiatives are viewed as crucial by Ramler, who expects to increase his range by a further 10-20,000 products this year alone. Moreover, this continued growth means Milan Direct is in an excellent position to continue expanding its employment base in Australia.
“Doubling, tripling and even quadrupling the number of staff we employee here in our Melbourne office. We’ve added 10 in January alone – we’re hiring as fast as we can to keep up with our growth.”