Michelle Lomas
Commission Factory.
Sam Viney
Thank you. It's exciting to be here and the first time I've ever been on a podcast, so apologies if I'm terrible.
Michelle Lomas
I'm excited to be the first. You're gonna be excellent and don't worry, it's all edited. It's not live.
Sam Viney
Am I allowed to swear?
Michelle Lomas
You're allowed to say whatever pops into your head.
Sam Viney
Excellent. Great.
Michelle Lomas
There's some recent news. Can I say congratulations?
Sam Viney
You can say congratulations.
Michelle Lomas
New newly appointed CEO of Lounge Lovers. Very exciting.
Sam Viney
Yeah. Look it's exciting. It's been quite the journey there. I've been there two and a half years, but it feels it feels like 10 years at least.
Sam Viney
And yeah, it's just been great to take it to the next level of our growth.
Michelle Lomas
Lots to talk about in terms of the success of Lounge Lovers, the story, how you guys are going from a marketing perspective. But why don't we first start off with maybe a bit of an introduction to yourself, introduce yourself to the listeners and where you've come from and -
Sam Viney
Yeah. Sure. I'm Sam Viney and I'm the CEO of Lounge Lovers now. Interesting background for somebody finding themselves running a retailer. I actually started in the creative advertising world way back in the early two thousands when it was all about TV ads and press ads and magazines and all that sort of stuff.
Michelle Lomas
Just a tiny little one.
Sam Viney
Actually, it was a lot smaller back then. I was at BMF, the ad agency, and started working on the Aldi account in 2008.
Michelle Lomas
You were very small then.
Sam Viney
Yeah, it was about I back then would've been just over a hundred stores and I think they're about 600 now, so
Sam Viney
Yeah. Very different time. Very different place. But absolutely loved the world of retail. Particularly at that stage, the supermarket category.
Sam Viney
And it was great working with a brand like Aldi, which has a different point of difference in the market. Everyone knows Coles and Woolworths and it's the default for everybody.
Michelle Lomas
What a time to be working for Aldi as well, when you know you've had that monopoly. Not a monopoly, I should say, a duopoly for so long. And incomes Aldi, I remember what a shakeup.
Sam Viney
Yeah. Look, it was great. Really interesting to really believe in the mission of a brand and what it was doing for not just Aldi shoppers. Truth be told, it was actually the wider supermarket category because yeah, Coles and Woolworths had to ultimately respond to this new entrant from overseas.
Sam Viney
For retailers, particularly furniture retail.
Sam Viney
And that was the time where I made the move back to Sydney over to the Lounge Lovers and and yeah, I'll tell you what it was like riding a rocket ship at times as far as just the amount of change in the growth in the business and some of the challenges that you go through.
Michelle Lomas
Yeah. It's that classic thing, isn't it? Yeah. We've had a lot of retailers on the show. The things that you say are very similar to what they say, but Covid just killed it for them.
Sam Viney
Firstly, I agree, it, it was incredibly disruptive for retailers. I think what worked in our favor and the brands that did well were the ones who genuinely had their e-commerce ducks sorted out.
Sam Viney
Before it all hit. Versus a lot of other brands who were furiously trying to make up for 10 years of non-investment in anything digital and trying to do it all in the space of six months. And obviously that's an impossibility.
Michelle Lomas
But, so you joined Lounge Lovers right? In the midst of
Michelle Lomas
The C word.
Sam Viney
Right. In the midst of all of that. Yes.
Michelle Lomas
Um, so why don't you maybe share with the listeners a little bit about the Lounge Lovers story.
Michelle Lomas
And how you came to be there.
Sam Viney
Yeah. Look, Lounge Lovers was started by the founder Derek Kerr about 11 years ago.
Michelle Lomas
You kind of can't be a furniture store exclusively online. Right. For, for the mid price.
Sam Viney
Yeah. Look I, I. I'd share your view on that, except probably 10 years ago I would've said that
Michelle Lomas
Temple and Webster is a classic case where you can be, but yeah.
Sam Viney
Yeah. Temple and Webster, Mocka, and Zanui, we are always all doing fairly well.
Sam Viney
But certainly I think for a lot of people they want to be able to see something in the flesh and
Michelle Lomas
Sit in the chair.
Michelle Lomas
It's a couch is an ex- it's like a tv. You kind of like, same as JB Hi Fi. I kind of wanna see what the color looks like. I wanna go in store and have a look. I might still buy online. But I wanna sit in the chair and see how comfortable it is.
Sam Viney
That's it. The two look, the two things. There's no question that the digital experience and the bricks and mortar experience, they are incredibly interconnected. And that's an area that we have spent a lot of time, resources, and money understanding the interplay between those two things. That understanding's never perfect. But certainly I think we're in a fairly good space there. We started off with one showroom. For context, pre Covid, the numbers of team members were sitting around 30 or 40. We're up over 200 now.
Michelle Lomas
Excellent.
Sam Viney
We've got nine showrooms across Queensland, New South Wales, Victoria and South Australia. And look, our ambition is to have more, just so more people around the country can access us as a, as a brand.
Michelle Lomas
Mm-hmm. And so, you know, you joined uh, a couple of years ago, obviously off the back of an interesting time where lots of brands were pivoting. What was going on at the time?
Sam Viney
I was brought in to look after marketing and e-commerce. To be honest though I think the, the greatest benefit of having somebody who'd come from a big retailer Aldi and Amart and particularly Aldi, is understanding of processes. And how a large organisation works in a really efficient manner um, as you can you know, perhaps expect um, we were growing so quickly that we'd outgrown our processes, outgrown our systems um, and, and to a certain degree it started to pop at the seams a little bit.
Michelle Lomas
What's the average?
Sam Viney
Look, you see all sorts of things any, anything over sixties world class.
Michelle Lomas
Excellent.
Sam Viney
I'm not privy to other retailers, but I think during Covid in particular, you would've had plenty sitting at sub-zero just because customers get tired of delays and all that sort of disaster.
Sam Viney
Into a more mature business. Now, I'm not suggesting we're a mature business, we're far from it. I talked about us previously being an awkward adolescent, um, you know, a teenager where, okay we're no longer this toddler running around, just crazy. But by no means are we at that maturity.
Michelle Lomas
Mm-hmm. And so what were some of the big things?
Sam Viney
Look it's not a sexy part of the organization. But warehousing and logistics in furniture is incredibly important to your customer experience.
Michelle Lomas
I can imagine.
Sam Viney
You're talking football fields.
Sam Viney
Or larger stacked up to the rafters. So if you don't know where various products are or if you don't know how many are there?
Michelle Lomas
Get it wrong. Yeah.
Sam Viney
Yeah. So that was a big part of improving our customer experience. Joining up our communications from a customer service perspective was crucial as well. Just wasn't quite as perfect as it should have been.
Michelle Lomas
That's always the case of a startup a little too fast. And the systems aren't always you add on things.
Sam Viney
Correct, correct.
Michelle Lomas
Without connecting the dots between the things you already have and the thing that you're implementing.
Sam Viney
We've got that running really well. The final piece was understanding how our marketing investment was working. We are aggressive in our marketing and we had a certain confidence level about what the various channels were returning. But as always, with any form of sort of attribution model or ROI modeling, you'll occasionally get this outlier result, which cause you all to stop and pause and go, hold on.
Michelle Lomas
So attribution modeling is generally a little eyeopening.
Sam Viney
It absolutely is. And I've done it at almost every organisation I've been part of. And it is, it's always something that surprises you. And in the context more of a startup brand like us, more of a niche brand, certainly some of our digital marketing performed better than what I'd be anticipating. That's not to say it's better than traditional. That's a blank, blanket statement I couldn't quite make, but certainly it, it opened my eyes.
Michelle Lomas
And so what were some of the things once you undertook that exercise that surprised you?
Sam Viney
I've got a history in big brands. Big brands, big budgets mass reach to an audience that's always in market. And quite frankly, when you're talking supermarkets, it's very hard to segment supermarkets too much.
Sam Viney
But I think what spun me out a little bit when I came into Lounge Lovers so we invest heavily in things like performance media and traditional textbook thinking, or at least my interpretation of it, it might be wrong. That's all about conversion performance, meters about conversion.
Sam Viney
Yeah. Um, Which you know, to a lot of people I'm tipping, they're sitting there going, that's really obviously it-
Michelle Lomas
But if you haven't been in that world. Certainly if you've been sitting in a traditional media role for a very long time and I, I just dunno if we should be talking traditional media anymore.
Michelle Lomas
Cause digital is, is is traditional media now, like there's a whole world of new media
Michelle Lomas
Coming in that's you know, the new, new media.
Michelle Lomas
But um, if you've been in that world for a very long time, it's hard for you to understand. That performance can drive brand and brand can drive performance. Both can do equally the same thing.
Sam Viney
Correct. And, and that's, that's been really, really useful for us. One of the strengths of our business, we've got a really clear view of who our shopper is. And that has a lot of advantages. That's got advantages in terms of ranging decisions. Um, you know, what fits within our range and what doesn't fit within our range.
Sam Viney
Actually, when you ask a, across the breadth of Australia, and I've done this, the number's $1,200. So if we're out there paying for audiences that reach a whole heap of people who think $1,200 is the maximum that they pay for a sofa or what they see as being the fair value of a sofa with the way our range goes, yes, we've got some sofas for $1,200, but the average has sit at about two and a half. We got a whole heap of people who just, quite frankly, we'll never shop with us.
Michelle Lomas
It's also a bad brand experience I think if you are, if you're trying to target that consumer cuz you think you have one or two products that meet their needs.
Michelle Lomas
But then they fall in love with another so far and then they're like, it's too expensive for me. And that's disappointing.
Michelle Lomas
So you know, you always forget that too. If you are, if you marketing to somebody who isn't quite your customer set
Michelle Lomas
They might actually have a bad experience.
Michelle Lomas
Cause they feel bad.
Michelle Lomas
That they can't buy the things they want.
Sam Viney
Correct. There, there's nothing worse than finding yourself. And I think we've all been there finding yourself in a retailer where you're walking around and you flip around the ticket.
Michelle Lomas
Oh, it's so embarrassing.
Sam Viney
And you see it in yeah. Those places where if you've gotta ask how much it costs, you probably can't afford it.
Michelle Lomas
The Flex Your Hustle Podcast is made possible by the team at Commission Factory
Michelle Lomas
And so how do you tackle that when you know that you know, brand is important?
Michelle Lomas
The brand isn't the only thing or the essential thing in the customer journey.
Sam Viney
Yeah. So look, firstly in the furniture category, There's very few strong brands that I'd say that most people would recognise, but the furniture market is really fragmented.
Michelle Lomas
I haven't.
Michelle Lomas
I'm gonna have to go for a visit.
Sam Viney
Look we specialise in taking the ugly duckling spaces, so often they're ex industrial spaces and warehouses and make them look cool.
Sam Viney
So we do that. It works really well with our furniture range.
Sam Viney
You know, I always love you know, running focus groups in showrooms and sort of, you let people wander around for the first 15 minutes just looking at things.
Michelle Lomas
They've research, they've been on Pinterest, they've
Sam Viney
Oh, they're all over Instagram.
Sam Viney
Yeah. They know exactly. And they just make a beeline for the product. And here's my card.
Sam Viney
Take it. But then you get people who, and I've certainly fall into this category where you kind of know what you want to achieve.
Michelle Lomas
A browser.
Sam Viney
You don't know how to get there. Mm-hmm. So having somebody to sort of hold your hand and walk you through, that's really, really um, useful. We're not an intimidating place. We're really friendly. Furniture, particularly once you get into the more stylish stuff, has a bit of a tendency to be a, quite an intimidating experience if you're not confident in what you're doing.
Michelle Lomas
And that's so true, the fact that you picked that up and you went you know, this is actually a problem and customers don't like that, but yeah, it's so true. You walk into the more expensive places they can sniff you.
Michelle Lomas
And you just don't get treated nicely.
Sam Viney
It's like going into retailers in Paris.
Sam Viney
You always feel like you're the least cool person in the entire city and everyone's judging you. So we do everything we can to make it a casual and friendly open experience.
Michelle Lomas
That's just such a nice um, thing that you've adopted that just really understands the audience.
Sam Viney
Yeah. We've got a really strong culture. Where everyone's very, very unique. But there are certain things that sort of hold us all together and one of it is just, yeah, just being really customer focused, but um.
Michelle Lomas
Down to earth.
Sam Viney
Not, yeah not intentionally over slick, if that makes sense.
Sam Viney
Not pushy. We don't want to be one of those places and where you walk in and. If someone makes a beeline over to you and then latches onto you for the entire time you're in the showroom because they wanna get the sale and make the commission. We're very much not like that.
Michelle Lomas
That's really nice. I mean, I guess every lounge obviously there's varying types of furniture to buy at varying price points, but a lounge for instance, is something that you upgrade.
Michelle Lomas
And you get a bit of a better brand. And so if they're coming to you, they're upgrading a bit.
Michelle Lomas
And so it can be, to your point, quite intimidating.
Sam Viney
That's exactly it.
Michelle Lomas
And a little nerve wracking. I haven't spent this much on a couch before. It sounds like there's a lot of complexities to that customer buying journey.
Michelle Lomas
I know you really have been working with Commission Factory and the team from the affiliate marketing space, traditionally seen as a very heavy performance driven conversion. How do you activate from an affiliate marketing space knowing that there are so many complexities around the journey?
Sam Viney
Yeah, it's so firstly quick shout out to Hannah, who's our performance media lead in the business. She was the one who bought the whole concept of affiliate marketing to the table.
Sam Viney
To myself and Derek, who was the CEO at the time. It was something we'd never really considered.
Sam Viney
But you know, the, the data's there. Uh, it shows that when you're talking our target people are doing people. Look out for these promotions and opportunities. We really go down two paths. One, I'd call our always on approach which is very much about getting ourselves in amongst affiliate editorial content that quite frankly, people who are in the furniture market, I'm looking for a couch, I'm gonna research it online. I'm gonna find some editorial content that tells me more stuff. And also just people who have a passion for interior design who might not even be in the market for it. So that really serves two purposes for us. What one is it does drive brand awareness for us. It does that dual role, just performance media and Google Shopping does.
Michelle Lomas
That's something that people forget as well, that you are only paying for a conversion, but that editorial content is up there. I mean, you might be in a list of four different brands. You have exceptional lounge quality, but you're also driving awareness.
Sam Viney
That's exactly it. And that's being able to do that job. That one, there's two jobs with the $1.
Michelle Lomas
Well, actually the awareness is free.
Sam Viney
Yes. True. The, that's a good way of putting it. The awareness is a free.
Michelle Lomas
The awareness is absolutely free.
Michelle Lomas
And unlimited.
Michelle Lomas
Um, It's the conversion that you only pay for.
Sam Viney
Yeah. And then look, and then obviously we have our sort of more promotionally driven stuff cash back offers which they work really well for us. And when we do it we apply a similar sort methodology to what we did. Do with other promotions if we've got a compelling offer, we make sure we push that really hard.
Michelle Lomas
I mean, again you're only, you're only paying for what you get yeah.
Sam Viney
Derek, our founder is an accountant.
Michelle Lomas
Oh, he would love this thing.
Sam Viney
He, he loves, loves this conversation. He rolls his eyes when I say anything about brand. Yeah. But when we are talking about marketing channels where you only pay for when you make a sale, oh, that's music to an
Michelle Lomas
Excellent, excellent.
Sam Viney
Music to an accountant ears.
Michelle Lomas
And so how do you manage that within the business and with some of the other activity that you are activating? Is it all managed within the one team? Do you separate the affiliate marketing in its own little buckets?
Sam Viney
Um, everybody wears more than one hat. Um, you know, sometimes that's a hard position to justify when markets are shooting up.
Sam Viney
So our affiliates program sits in with sort of our performance media team. I say team, there's two of them. I guess two people does make a team.
Sam Viney
But that's where it sits. And along with CRM. So you've got all the data-driven activity sitting with the one group of people and they can keep an eye on it. All of it. As far as I'm concerned you know, the, the competency that makes a really good performance media person, makes a great affiliate person, makes a great CRM person.
Michelle Lomas
It's a mindset.
Sam Viney
It is very much a mindset. It is.
Michelle Lomas
It's not a channel, it's a mindset.
Sam Viney
It is all numbers. It is all numbers.
Michelle Lomas
Yeah. So you've gotta have that kind of real passion and desire. To see those numbers improve, to see those sales come in.
Michelle Lomas
And to optimise off the back of that.
Sam Viney
That's it. Look and this is completely different to my mindset and that's why I appreciate the team so much is their level of detail that they go to and those ongoing little refinements.
Sam Viney
You know, I struggle to concentrate on anything for more than 10 minutes. Yet Hannah and James sit there and look.
Michelle Lomas
Yeah. Look, I mean the, there is a lack of talent in the industry from a performance perspective.
Michelle Lomas
So when you find good people who have that natural brain power and that obsessiveness.
Michelle Lomas
Keep ' em.
Sam Viney
Yeah. Look I agree. Particularly I think it's one of the challenges with the more data driven areas is we're really fortunate that we've got two people who can understand the commercial side of the business, obviously translate that into our performance media. And then quite frankly, for me, the rarest part of that skillset and the one that both of them have is being able to communicate that back to the non-digital markets within the business.
Michelle Lomas
But other people don't understand.
Sam Viney
It's undervalued.
Sam Viney
Cause people don't understand and if they're not good at communicating it, it's no one will ever understand. It's just the guys sitting in the corner who just beaver away on, on that stuff. Whereas they've, they play a really big role in broader discussions within our company.
Michelle Lomas
One last question on this. I was just curious to understand, because you said from an affiliate perspective, you're doing a lot of testing and learning.
Michelle Lomas
And that's part, and it should be part of the iteration, right?
Michelle Lomas
Takes time. It's a bit like other channels like SEO where you kinda gotta build on it and grow and then-
Michelle Lomas
You know, you find out what works and what doesn't. So what's worked and what hasn't?
Sam Viney
Oh, really good question. I don't wanna say who they are cuz our competitors aren't on there as much as what we are.
Michelle Lomas
And that's from a publisher perspective?
Michelle Lomas
Yeah. Specifically? Yeah. Yeah.
Sam Viney
The other is just around we're talking the more transactional, more promotional stuff. Just, at what level we know it triggers a purchase. There's a certain amount of what's the magic percentage? If we offer a 2% cash back, is that gonna drive somebody to buy a two and a half thousand dollars sofa?
Sam Viney
I can tell you from experience, no. So often that we need to be a bit more aggressive with those offers. Now without getting too boring and retaily you've also gotta consider that in the context of the wider office within what is the product. What is the margin on that product? What is the promotional pricing on that product? And then over the top of that, what is the sort of the cashback that we're prepared to offer through our affiliate partners?
Michelle Lomas
How much am I willing to give up to make a sale?
Sam Viney
Correct. Furniture is not a huge margin game. Might sound on the surface like it is but it's not.
Michelle Lomas
And it sounds like you're pricing this in a way that's making it more accessible.
Michelle Lomas
Can have quality at an affordable price.
Michelle Lomas
Whereas as we know, some are, yeah. Quality there's a little bit more of a price tag to that.
Sam Viney
Don't think I could have put that any better. Particularly in the environment at the moment, costs are going up, costs have been really high, the shipping cost situation.
Michelle Lomas
Yeah. Fair enough. I'm sure it's a good tactical tool though, when you've got those moments, warehouse clearances and the like to just shift product cuz you've got a whole new low coming in and, and-
Sam Viney
Yep, yeah. Absolutely. There's lots of space taken up in warehouses. Um, you know, how much space?
Michelle Lomas
Sam, well thank you. Thank you so much for joining us.
Michelle Lomas
Really appreciate it.
Sam Viney
Perfect. Appreciate it.
Michelle Lomas
Huge thanks to Sam for taking the time to join me in the studio for his very first podcast. We have another exciting episode coming up. Here's a sneak peek.
Samuel Wood
One of the biggest things that we're seeing come out of the US especially is celebrities or influencers partnering with brands. Like the Jenners have just done with um, the teeth whitening or with the um, I think it's another makeup brand where they don't own the brand and all they're doing for is becoming a brand ambassador, creating their own store that the brand drop ships for them.
Michelle Lomas
If you aren't already, don't forget to follow so you don't miss an ep. And while you're there, why not drop us a rating and review? We'd love to hear what you think. Flex Your Hustle is made possible by the great team at Commission Factory and produced by Ampel.