From the source: Ivan Lim, Brosa
In 2016, Lim was included in Forbes Asia’s 30 under 30 innovators revolutionising their industries, and Brosa was named number 26 in The AFR‘s Fast Starters list. Lim was previously head of marketing and growth at Tweaky, which rebranded to Elto and was acquired by GoDaddy in 2015.
Company profile: Launched in 2014 in Melbourne, Brosa works directly with craftsmen from around the world to create unique designs and experiences for its customers. Brosa’s vertically-integrated model and digital-first approach means it manages and controls the entire supply chain from design to delivery, using powerful technology to create an effortless experience for customers.
IRW: How did 2017 go for the team at Brosa?
IL: 2017 has been a good year for us and we’ve continued along some strong growth. Since Airtree invested, our customer orders have grown more than 10 times in the business. That has really come down to us focusing on what is important and for our customers, that’s buying furniture or creating beautiful home, which can be extremely painful.
We’re a vertically-integrated business that controls the entire value chain. We have our own people on the ground – we have makers in Australia, Vietnam, India, parts of Europe and they oversee quality control, assembling, packaging. We have our own distribution centre in Australia where we dispatch across the country, but we also build a lot of technology on top of that to help optimise and automate that. Those two things – being vertically-integrated and having powerful technology – allow us to deliver a painless customer experience.
IRW: What have been some of the biggest challenges for Brosa this year?
IL: One of the biggest things has definitely been coping with the growth of the team. We used to be 20 people, but now we’re about 70 now across all our areas, so it’s difficult to get everyone focused on the same mission and priorities, which has been a growth curve for us.
If you think about it, you can go from five to 10 and even though it’s only five extra people, the lines of communications have grown exponentially. When you go from 20+ to 70, it’s infinitely more complex. That’s definitely been a learning for us in terms of making sure we’re delivering on the same thing we promised customers in an efficient manner.
IRW: What do you think are some of the challenges for online retailers at the moment?
IL: You can easily lose touch with the customer, especially as you grow. In the early days, the founders are picking up every single call, listening to every piece of feedback, so you’re in tune with them. But as things grow, it’s easy to stop talking to them, so we’ve made intentional decisions in the last year to make sure we never elongate those lines of communication. We said, ‘Let’s make sure we only keep one degree of separation for every team member to the customer’, whether that’s doing customer service themselves or looking at NPS scores.
We take NPS scores for every customer, which come through our internal chatroom, which everyone can see – we can see what’s happening in the business, which is important. We realised we had people who had never spoken to a customer and if you’re not in tune with them, then how do we solve their problems and create the right solutions?
IRW: What plans do you have for 2018?
IL: For us, definitely continuing to grow our technology. One of the unique things about us is we reimagined retail and though, ‘Let’s not just be a trader, let’s not just think about ourselves as selling product.’ What we’re trying to do is help customers create a beautiful home painlessly, so we need to keep growing our tech, like our warehouse dispatching software to make sure things go out, or automated push messaging to customers. We even do things like machine learning for demand forecasting. We’re as much a furniture company as a technology company.
Hiring strong talent is important for us as we’re growing. We’re looking to add more expertise as profit grows out of not just being an online retailer, but retail in general. We’ve never seen ourselves as just being online. We started off online but we’re expanding into where our customers want to be, so making sure we bring on the right leadership and expertise is important for us.
We already have a physical studio space in Melbourne, which is by appointment. When we say physical retail, physical doesn’t just mean a big store where people come in and buy products. Customers aren’t going into stores to just buy products, they’re trying to get the right expertise to create a beautiful home, so if we can create experiences and the right interaction points in a physical environment that carries through the same message, that’s what we’ll do.
Customers are looking for a ubiquitous experience, some will want to engage offline, some will want to chat with someone at 7pm, some will want to call or email.
So we will continue to expand out and do more tests. Every day, we get lots of customers in Melbourne but also in Sydney, Perth, Adelaide and Brisbane who ask us if we have a space in those states. We definitely want to be able to expand our footprint, experiment and see how we can engage with customers that way.
IRW: People are obviously comfortable buying smaller items online now, but do you think they are now open to buying their furniture online or are they still coming around to the idea?
IL: In any sort of retail market, smaller products like books, clothes, shoes – they tend to have the early penetration and that’s where customers will go first. Large bulky items follow on from that and I think we’re seeing that come through in the living space across the world.
I think customers still need a lot of education, it’s still a new concept to them, but there’s a lot of growth and we’re spearheading it. We believe that a tech-first, next-gen retailer like Brosa will eventually build the shopping experience as being better than traditional retail.
You’re seeing it with other categories, too – it’s just easier and better to buy something on Amazon than to go to Coles or Woolies where you buy everyday items. We believe we can create experiences where it will be better to buy with Brosa online or offline, than to go to a traditional retailer where you have to dedicate four to six weekends of your life to go into 10-12 showrooms, try to figure out the right space for it, organise delivery. We believe a next-gen retailer can make that better than what we have today.
IRW: A lot of online retailers find that in some ways, they become logistics companies. What’s your experience been like in the delivery space at Brosa?
IL: We have done experiments around controlling delivery. We have delivery partners and solutions but what’s more important is building the technology on top of the delivery mechanism. Moving object from point A to B is difficult – there are complexities in terms of scheduling, making sure the booking is there and making sure you’re routing the journey for the drivers as efficiently as possible.
The logistics consideration is an incredibly important component and when it comes to bulky goods, you need to think about when you’re scheduling delivery, accuracy of the time, constant clear communications, value-add services like in-house delivery, removal of rubbish, assembly – but I think one of the things that’s important for us as a vertically–integrated retailer, is that it’s just one part.
Product quality is another part and sequencing delivery is another part of the chain. If you’re not vertically-integrated and buying from a lot of suppliers, then your chances of low product quality will go up, which will still be a bad experience for the customer.
If you have a lot of suppliers delivering products, consolidating orders across four suppliers will be difficult for you to deliver in the same manner with the same consistency which matter for bulky goods items. Our belief is customers want a beautiful home and do it with convenience, so the only way we can do it is to control the whole value chain.
We’ll never be a marketplace where we have every supplier and we won’t have the widest range, and we won’t be another retailer where we have the cheapest prices, but we will deliver a painless experience because we’re vertically integrated and control everything.
IRW: There’s been a lot of controversy in the furniture space in terms of replica pieces being sold by retailers. Where does Brosa stand on that issue?
IL: Firstly, we don’t do replica furniture and we don’t believe in it. I think having said that, design is a very fluid thing. People can take inspiration, this is a thing that happens, we have a lot of designs that we pull out [from our site], then see other people sell something similar, but one of the things to understand about our model is we don’t sell other people’s products. Every piece is a Brosa product and the experience is more than just a product,it’s a fundamental mind shift for a lot of retailers – retail isn’t just about trading a product, it’s about the whole experience.
We have customers who will buy from Brosa a product that’s $300 more than a competitor, but they’ll spend it with us because they know they have all the info, they’ll have an amazing experience. We have stylists they can speak to and we will keep them in the loop during the delivery.
Definitely, we don’t want to copy other people but we know people want to copy our products. People sometimes think that if they copy our products, they’ll be the same as Brosa, but just because you copy a product, doesn’t mean you’ll deliver the same experience.
IRW: What are your thoughts on the current online retail landscape in Australia?
IL: I think online retail in Australia is always maturing quickly. I think definitely there tends to be some lag when you’re look at what’s happening in Asia, the UK and the US – there tends to be a lot more rapid innovations in those regions, but Australia definitely pushes forward.
Healthy competition will force big box retailers to be increasingly customer centric and customer focused. In the past, big box retailers didn’t have to be focused on giving the customer the best experience because they controlled distribution. Customers had to go to a large store to buy what they wanted.
The internet changed that. It removed the barriers of distribution and made it possible for any retailer (big or small) to connect with a customer. In this world the retailer that gives the customer the best experience wins. Amazon calls itself the most customer centric company in the world.
Amazon is winning not because it’s “Amazon” – it’s winning because it’s giving customers a better experience. New breed retailers like Brosa build a whole business model around an amazing customer experience and this is what is challenging incumbent retailers.
The ones that win are the ones that give better customer experiences, because they win the loyalty of the customers. There’s more competition, but you’ll also see new retailers pop up who are bringing a digital-first experience and a deep understanding of what customers want.
I think it’s promising, because they’re looking at new models of retail, a lot of which are around how we understand our customer better and build the customer experience. We don’t have the luxury of being protected because we’ve had prime real estate in a shopping centre.