From The Source: Tim Schaafsma
Tim Schaafsma is managing director of Freedom. He has held that position for the past five years and has been with the Freedom group for the past 13 years. He is also Managing Director of Bay Leather, Freedom’s Steinhoff International stablemate. He is also a local director of Steinhoff Asia Pacific.
Freedom began in 1981 as a retailer of high-end furniture boasting great design and style for the entire house. Previously a listed Australian company in 2003, Freedom was delisted and privatised. In 2006 Freedom became part of the South Africa’s Steinhoff International group. Locally, Steinhoff’s retail brands also include Snooze, Bay Leather Republic, and Poco.
Justin Grey: How was FY15 for Freedom?
Tim Schaafsma: Overall we’ve had a really good run. We had a strong growth year in FY14, and we’ve backed that up with a consolidation year in FY15 to maintain our position.
JG: Freedom has just rolled out a new branding campaign anchored by a “Love coming home” message. What can you share about this brand refresh?
TS: Freedom has been in Australia for nearly 35 years, and its position has always been about providing complete solutions for our customers. We’re an Australian-developed business, so our proposition is really about helping Australians have the beautiful homes they love. So “Love coming home” really celebrates that fact – what’s possible when customers are able to purchase beautiful product from Freedom that suits all of their rooms. That’s really what this branding is all about, and it’s something that we see having a real length of presence in our business. The research and insights are on how much Australians love coming home, and we just want to ensure that they know how great coming home can be with Freedom in their home. It’s about the complete solution.
JG: The campaign employs a shoppable TV commercial to entice viewers. What does that seek to achieve?
TS: There’s a lot of noise in the furniture category around discounting and percentage off, and we wanted to clear the air a bit and have quite a distinct presence with our TV commercial to show what’s possible at Freedom. So it is a bit different. An innovation that we’ve focused on with this campaign is we’ve have what’s called a ‘Shoppable TVC’ online, so when customers are watching the TVC, they’re doubling that with an iPad or laptop on their lap. So we’ve got a ‘Shop The Ad’ [facility] online that they can click on and start looking at the great products they’re seeing in the ad. That’s a first for us, and something I’m looking forward to giving us some great results.
JG: What is Freedom’s approach to online sales, given furniture isn’t the most obvious type of product that consumers would typically shop online for?
TS: Furniture has generally been a laggard in terms of e-comm because of the issue that people feel you can never sell a sofa without having actually sat on one. And that’s proving not to be the case. Our consumers want a lot of information and they want the ability to buy online. We’ve got a great logisitics solution that provides two-man deliveries pretty much around the whole country. And that’s one of the challenges for e-comm players – the back end of the business.
We were actually one of the first national furniture players to have a full e-comm presence. All of our furniture and homewares categories are available to purchase online. It’s tying in with what we’re seeing a lot. What’s definitely changed in the last five years is a shift towards customers doing a lot of that research online, which is great, because they come in better informed. [But] it doesn’t in any way lessen our obligation in store to present our product beautifully, but what it allows is the customer to have a far more informed decision.
What we wanted to do was make sure that that bridge is connected and that our customer is engaged with an experience, not just in store, but also that we can replicate that online. I’m a great believer that the customer is the centre of your business. And if they choose to shop you online, or if they choose to come in store, and then want to come back online to purchase, for convenience, it’s our job to make sure that they get the experience that they’re expecting.
JG: How is this focus on e-commerce informing Freedom’s store design?
TS: The online space has meant that in the background we’ve invested significantly in systems. We’re launching a second generation of our e-comm in the next few weeks, and that will be tied in with a complete refresh of our point of sale system as well. My vision has always been that the best place to sell furniture is from the furniture itself, not lining up at a till. And this investment that we’re making is fitting in with that vision, so we’ll be able to transact with customers, either on their hardware, or on our hardware, instore, online, on the bus, wherever. We already have iPads with our decorator service, so we’re going to try and bring that out to our sales people as well, so that they’re really able to be a ‘consultant’, which as how I term them.
JG: You’ve been MD of Freedom for five years now – and with the Freedom group for 13 years. What are some of the major achievements you’ve seen and challenges you’ve faced over those years?
TS: The group has had a really phenomenal growth story as part of Steinhoff International. Freedom, when we look at it over time, really needed to refocus on both its product as the key ingredient – and I’m very proud of what’s been achieved in the last five years when it comes to the product that Freedom offers – as well as our people and the way that we engage with customers. So launching a loyalty program that’s been very successful for us, launching e-comm … we believe we’re trying to meet or exceed the customer expectation. That has been my main focus over the five years.
JG: Furniture is a competitive market, with a lot of retailers coming in at different levels of pricing. Where does a legacy furniture retailer, like Freedom, sit in today’s market?
TS: You hear lots of concern about market conditions, but we’ve really just focussed on our own race and running that as smart as we possibly can. It is a very competitive market, and it’s quite fragmented as well, with no real dominant single player. Having said that, our beautiful product and style are two things that we believe we do differently to the rest of the market. I think Australian consumers respect what Freedom is trying to do for them.
What Freedom has always been proud of is the style and the product that we offer, which when you look at the mix, actually represents great value, not just necessarily at the cheapest price. That’s not what we’re about; we know that when people buy furniture, they’re buying it as a long cycle purchase, they’re not changing it every season. So it’s something that we need to be really relevant to our customers on. And I think we compete really well in that space. We take quality very seriously. And I know a lot of retailers say that, but every single product we sell has “Freedom” on the box. And we sell that product to consumers who measure our brand against that product. So there are definitely products that we choose not to sell and price points that we choose not to play in, simply because we believe our customer expects that from our brand.
JG: What can you reveal about store plans for Freedom moving forward?
TS: We’re really happy with the new approach to presentation that we have in Moore Park [a concept store launched in early 2014 in partnership with Steinhoff International stablemate, Snooze]. So we’ve continued to roll that out in our flagship stores. They’ve all been completed, bar one, in Balgowlah in Sydney. And any new store we do, we will apply that treatment, which has proven to be consumer friendly, as well as quite flexible for us.
We’re sitting at the moment at 48 Freedom stores – we have been growing and we’ll open two more stores before Christmas, in Aspley in Brisbane and Penrith in NSW. We’ve obviously been investing heavily in our store presentation and fitouts, and my plan is we need to get the Freedom business up to 60 stores, at least. Given the trading density of a Freedom store, that’s the target that we’re working on with Steinhoff. It’s probably over a three-year period that we’re looking to grow the stores. The store is a significant investment – our average store size is probably 2500sqm.
A lot of our activity recently has been about franchising. Freedom has always had a franchised community of stores, and we think that that can really play well for us to penetrate some more regional locations, places like Toowoomba and Bendigo, that we don’t currently trade in. Not that I’m saying that that’s where our next stores are, but that’s the sort of region where the combination of the Freedom brand and franchising can be very effective. Part of that 60 store model will involve some additional franchising, and of course company stores as well.
We’ve got 11 franchise stores at the moment. Our most recent franchised store is in Chadstone, in the Homemaker centre there.
JG: What are the plans for the rest of 2015 and into next year?
TS: Everything I’m doing is focused on the engaged customer. So we launched our loyalty program two years ago and we’ve got some really great results out of that. So there’s been a lot of good coming out of that. And then the roll out of Freedom Bedroom into every Freedom store, so every store gets a new level of sophistication when it comes to the bedroom. They’re the things we’re focused on for the next 12 months or so – to ensure that it’s all about an engaged customer relationship. With the branding of our business, we’re investing right now in some positional marketing related to the ‘Love coming home’ message. There’s lots of positive feedback and encouragement on that from people in our business, about what Freedom is all about. So I’m confident that we’re going to have another good year.