Temple & Webster debuts new DIY retail play
- 04 May, 2022 12:27
ASX-listed online retailer, Temple & Webster, has debuted a new online destination targeting the DIY renovation and home improvements market.
Officially announced alongside a trading update at this week’s Macquarie Conference, the company said The Build by Temple & Webster online-only store is aimed at home renovators shopping for DIY, renovation and home improvement products. Overarching categories featured on the site include kitchen, laundry, bathroom, curtains and blinds, wallpaper and decorating and heating and cooling.
In all, The Build has launched with more than 20,000 products across 39 categories. The company said additional categories including flooring and tiling, outdoor living and landscaping, tools and building/renovation equipment will be added in the coming months.
According to the company, the home improvement market is worth $26 billion. The Build is expected to add another $16 billion to the group’s current $16 total addressable market across B2C furniture and homewares.
The company also noted only 4 per cent of the current addressable market in this space has migrated online locally, compared to the UK, where online penetration has reached 25 per cent. The figures are based on research by Euromonitor International, Home and Garden 2021 & 2022, Retailing 2021 & 2022 and company estimates.
“Our mission is to help our customers live and work in more beautiful spaces, so turning our attention to home improvement is a natural extension,” Temple & Webster CEO, Mark Coulter, said. “Australia is a country of home renovators; we love our homes and we love making them more beautiful. The Build by Temple & Webster is aimed at making home improvement jobs, big or small, easier, cheaper and better.”
Coulter said The Build will again follow the group’s principles of comprehensive range, great customer service and a source of practical advice and inspiration.
“We believe our expertise in ecommerce and the home will help make The Build by Temple & Webster become Australia’s first-stop shop when it comes to renovating and redecorating,” he added.
In a statement, the company said synergies and cross-sell opportunities between The Build and the core Temple & Webster business will help to scale The Build and help it capture customer spend. It also flagged the ability to leverage its core tech platforms, supply chain, digital marketing and data expertise to support the new venture.
The group has made an initial investment across FY22 and FY23 of about $10 million to kickstart efforts, spread across marketing, people and working capital and derived from an existing cash stockpile. Future funding will be subject to milestone achievement.
As part of its launch activities, The Build is running a competition giving customers the opportunity to win $5000 to put towards renovation efforts by registering via its website. There's also an offer of $20 off their first order.
The Build is expected to make a material revenue contribution and be EBITDA positive in FY26, with a long-term margin profile that is expected to be better than furniture and homewares, the company said.
Meanwhile, Temple & Webster also flagged more investment into data, personalisation, augmented reality, artificial intelligence and logistics to further organic opportunities, such as its private-label offering, as well as for ‘opportunistic inorganic activity’.
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