From the source: Anna Carrabs, King Living

For 40 years, King Living has offered Australian customers quality furniture designed to last a lifetime. But now the retailer is expanding overseas and entering new markets. Here, CEO Anna Carrabs reveals more about the brand’s future plans.

Insider Retail Weekly: King Living just opened up its Shanghai flagship. What has that been like?

Anna Carrabs: Shanghai’s been a very interesting experience. Because we have manufactured in Shanghai for the last 25 years, it just made an awful lot of sense to have our own retail outlet there. It’s been great – we’ve opened doors and we’ve made sales, but there’s definitely been a learning curve because of the way they think and shop in China. It is totally different to everywhere else.

In Australia, you go into a store when there’s a sale and you expect that you’ll buy [at that price]. But really, in Shanghai, you want to bargain. I think they expect to get a deal, to be treated as special. That’s fair enough.

I think what most interests the customers is the Australian lifestyle. It’s about comfort and being one with nature, and I think that’s what they’re after in terms of buying into an Austrailan design brand.

It’s about our outdoor lifestyle, but it’s also the fact that we use leather products. Our leather comes from Italy and Germany and it’s developed by us with the tanneries. We have steel frames that have lifetime warranties. It’s modular so they can move it around when they want to change things. Our furniture can become a bed if customers have guests over, which is what steel allows. They can buy a spare set of covers and change them easily. Here in Australia, you buy a piece and even though you can do these different things, you actually don’t. But in China, they actually want to buy an extra set of covers because they like to change things up, like when it’s a celebration at Chinese New Year.

IRW: What are some of the benefits of launching your flagship store in the same city as your manufacturing?

AC: The biggest benefit is the [improved] lead times and delivery. We make our own furniture, and it’s custom-made so we don’t hold stock. Customers go into the store, order what they want and we start making it. If people look inside the covers of the furniture, their names are on it.

But because we make the furniture in China, the lead time is a week – they get their furniture fairly immediately. In Australia, the lead time is between six and eight weeks.

We started our international expansion in Malaysia and Singapore three-and-a-half years ago, which has been very successful. In July, we’ll open our second Kuala Lumpur store. The plan is to roll out more stores throughout China and the rest of Asia.

IRW: What advice would you give other retailers entering China?

AC: If you haven’t operated in China before, you have a lot of homework to do. Don’t assume that just because you’ve been successful in Australia [it will be the same]. China is a very unique market. Do your homework and get ready to change things up, because how Chinese consumers work and think is very different.

IRW: You’re also entering Vancouver in July as well. King Living opened 40 years ago. Why does now seem like a good time to focus on going overseas?

AC: The reality is we’re now in a mature market and it’s not like we’ll be opening dozens of stores in Australia. We’re all about having flagships in each state and it’s not like we’re going to open another 30 or 40 stores here. I know that’s what our competitors do, but it’s not us.

It makes sense for us to go, ‘Where else can we expand? We’ve got a great brand here, but how do we use that brand and go into other regions?’

The way that we set up our stores and the fitouts, the way we train our people and the customer experience when you walk into our stores are all totally different to everyone else. We don’t want to just open a store – it’s way beyond that. It’s like walking into a Gucci. We don’t want to be a McDonald’s. They’re great for what they do, but for us, it’s about the customer experience of having someone take you through the store, talk about your needs and how it’s going to fit in with your life and home. How do you do that if you’ve opened stores everywhere?

IRW: What are King’s future plans for Australia?

AC: It really is to continue that customer experience, look at the demographics and appeal to a very wide audience. We want the parents to buy from us – and we want the kids to know the benefits of having the furniture. In a lot of cases, there are kids who have inherited from parents. We often re-cover sofas that are 30 years old. It’s really great that there are a lot of hand-me-downs that go to the kids of people who downsize. It’s about sustainability for us.

My husband thinks I’m a nutter, but I drive around and see those council clean-ups and take photos. You’ll see everyone else’s products, but you don’t see King’s. For us, it’s also about the environment and it’s what we want to encourage.

IRW: How would you describe the King Living customer?

AC: We don’t have a target customer, but the reality is if we talk about the typical customer, it’s usually someone who’s a female in their mid-to-late 30s and is in the workforce and the decisionmaker. But we have seen a shift. We’ve got a lot more male customers who are houseproud, and while it used to be mid-30-year-olds, it’s changed dramatically. So we have customers on either end of that.

I think about my son, who’s 27. He wants to buy something good that will last. Younger customers are absolutely more aware of sustainability, but maybe they’re also not as keen to own a home and would rather have nice things around them, even if it’s in a shared property or a rental.

But we also see older people who are either downsizing and have changed where they’re living and want something different. Or they’ve had very traditional furniture and want something contemporary.

IRW: Furniture is quite a crowded space. How does King fit in the competitive landscape?

AC: We’re different because right at the beginning, we look at how people live their lives and what their needs are. We design our furniture with that in mind. The steel frames really allow us to have modular furniture that changes with people’s lives. It also means that there’s a high comfort level. The suspension that’s in a car seat – that’s what we’ve installed in our furniture. You can sit wherever you want on our furniture, but the comfort level remains. In a lot of other furniture, they use webbing. We look at other furniture, they’re using plywood, cardboard, and the reality is that with time, that will sag. That doesn’t happen with us.

IRW: There are a lot of retailers that are getting into interiors now that offer stylish homewares and furniture at a much cheaper pricepoint. Is that a concern for King?

AC: It depends whether customers want something that’s going to be there in 10 years’ time and they want that flexibility to re-cover it. Interestingly enough, as times get harder, they don’t want disposable items, they want to make an investment and have a piece that they’re proud of that they can put in their homes. Absolutely, there are always going to be those people who want cheaper products, but that’s not the market we want to be in.

Consumer confidence has had a huge impact. If you think about what our goods are, they’re discretionary. It’s not like food – you need food and, to a certain degree, clothing, although you might not go the designer route. A lot of people will say consumer confidence will impact the market they’re in, but the reality is we actually haven’t faced that. And in a lot of cases, when people don’t have value in their homes and they’re not selling, they’ll do the next best thing – they’ll renovate. And part of renovating is getting new furniture.

So even in recession times, we’ve done really well. I think that’s the hardest part for us.

Also, when you’re successful, you have competitors coming [into the sector] all the time. It’s different from five or 10 years ago, but it’s always about the value proposition for us and what it is that makes us different from all the other people telling us that they’re our competitors.

IRW: How are King’s digital plans going?

AC: It’s probably one of the biggest projects we’ve got going on – to make that online customer experience line up with what we’ve got in-store. Amazingly, we’ve got people buying $10,000 sofas online. In the last couple of years, that’s grown enormously. We’ve got more work to do online, and we want to make sure that there is no difference between customers going into the store and having an online experience.

IRW: What are King’s factories like in China?

AC: I first went to the factory before I started working for King and I was a consultant [for them]. I remember travelling there and thinking I’d walk into a sweatshop, but I was just blown away. The premises are surrounded by greenery – we’ve got trees everywhere. Our employees also earn extremely well.

In Shanghai, there has been legislation that requires businesses to put in systems so that we don’t pollute, and we’ve spent a lot of time and money doing that. We’ve got filtration systems where the air that goes out is probably cleaner than the air that comes in. We’ve installed solar into a lot of our retail premises here, and we’re about to do that in China.

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