This Former Consultant Had Only A Bean Bag -- So He Started An Online Furniture Store

When Dean Kelly moved into his first apartment all he had was an X-Box and a bean bag.

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As a busy management consultant with a good job at Booz & Company, the 26-year-old bachelor had little time to be troubled by matters of the home and his desire to drive across town to a furniture store was non-existent.

Mr Kelly, now 32, did most of his shopping online. But when it came to buying furniture, the choices were limited.

“No one was really doing a branded one stop shop for your home,” said the now co-managing director of online home store Zanui.

“The offline guys weren’t selling online and the online guys weren’t making a fist of it. Some of the discount providers were selling at a heavy discount, but I saw a big gap in the market.”

In 2011 he and co-managing director Joakim Broms, 31, a former investment banker at Morgan Stanley, started to build a company that would fill it.

They decided to break ground in Australia by selling furniture and home ware exclusively online, and deliver the goods directly to the customer.

With financial backing from The Rocket Group — the largest online venture builder in the world — Dean and Joakim launched the site in December 2011, with the enthusiasm you would expect of two bright, business-savvy entrepreneurs.

They reached out to as many sellers as possible and packed the site with 90,000 products, then offered free shipping to customers across Australia.

But when people in the Cocos Islands got wind of the deal, and cost the company around $2000 for each item they shipped, the deal was off.

It was just one of the challenges faced by the pair whose experience in online furniture sales was as limited as their previous knowledge of home design.

“Everything we are trying to deal with at the moment is new, so we are approaching the problems with new ideas based on our experience solving business problems,” Dean said.

Freight was just one of the challenges, which they overcame by building partnerships with delivery companies, and working out which sellers were more able to make individual customer deliveries.

“We probably brought on too many sellers who were not geared to sell online, so it meant that sometimes the customer experience wasn’t great,” Dean said.

They started to only work with sellers who fulfilled their criteria, and narrowed down the product selection to just over 650 carefully chosen Australian and international brands.

A staff of 50 online marketing and furniture sales professionals from around the world are now entirely focused on building the online shopping experience, and providing customers with quality content: clear images, lots of product information, and home decorating ideas.

Their target audience — first home-owners, families and mostly women aged 25-50 — are already shopping online, Dean said.

“They are happy to buy clothes and toasters online, so we are changing the mentality. The real question is why wouldn’t you buy furniture online?” Dean said.

Because buying furniture is a hands-on experience, says Brian Kutner, general manager of furniture at established Australian home store Harvey Norman.

He said the rise of online furniture sales stores such as Zanui, and Temple and Webster had not had a big impact on furniture sales in Harvey Norman stores. And although Harvey Norman has its entire furniture catalogue online, most of its furniture sales are made in the stores.

“People love to shop for furniture in person,” he said.

“They love to walk in and to look and touch and feel. There are always going to be people who like to shop online, but the touch and feel component is missing.

“Our online business is very robust in other categories but furniture and bedding, because people still like to come in and shop. They like that physical presence.”

They also avoid freight charges by shopping in person, and even if they order online from Harvey Norman, the goods will be delivered to their nearest store, rather than their front door.

“We have got all these different channels and the landscape is all about different people and different ways of engaging,” Mr Kutner said.

“Whatever the customer wants is what we do and we try to do it the best.”

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