Richard Tucker and Joe Murray are taking on Tesco Direct and Argos with their furniture website WorldStores
At a time where the high street sales are falling at Felix Baumgartner’s speed, online shopping is what it’s all about.
But you can’t just turn up online and expect the cash registers to ring. You’ve got to get love from the search engines.
And proving that ranking higher on Google can make retail work is WorldStores, an online furniture website that offers more than 300,000 items and household goods through its 80 niche site like BedroomWorld, LightsWorld and Sofabedsworld.
Launched in 2007, the business is owned by Richard Tucker (above, left) and Joe Murray who spent two years analysing thousands of different keyword searches to find categories that have a large volume of searches but poor results. The duo’s experience of running Optelligence Europe, a search engine marketing agency, came in very handy.
Result? Worldstores is growing 50% a year and is expecting a £60m turnover this year. Last year, Balderton Capital and Advent invested a combined £8.5 million in Worldstores.
Headquarterd in Twickenham, the company has 200 employees in total. They also have a call centre in Rochester and a small depot in Northampton.
The founders think they can easily “grow the business into a £500 million turnover” and that too without looking abroad. How? We ask them:
How did you come up with the idea for setting up the business?
It originated from our background in search marketing. We could see that there were a colossal number of searches on Google for products for the home, such as beds and furniture, and when customers clicked on the results the websites were terrible – offering limited ranges of product, very long delivery lead times, and often at quite high cost. We knew that if we could build the technology platform and supplier relationships we needed, that we could transform an industry.
How have you managed to get such phenomenal growth?
It’s all about data. Search engine data helps us to identify what customers are looking for, as well as supplier stock positions, order tracking, and customer satisfaction ratings. We are dedicated to measurement and improvement.
What’s your business model?
WorldStores is a demand driven business. Through detailed analysis of online search data we can see exactly what potential customers are looking for, whether that be general product categories, like “beds” or individual products, and we can add that product or category to our catalogues very quickly. We have relationships with over 700 suppliers and manufacturers around the country who have products sitting in warehouses and we have managed to persuade them that we can come and pick it up and deliver it to our customers very quickly. Some manufacturers with whom we have relationships will even make products for delivery the next day – even mattresses for example!
Ultimately we have an unusual business model that is demand driven rather than supply driven. We listen to what our customers want to buy, and we provide it. We don’t ever presume to know what we think they should be buying. In that way we are not traditional retailers.
In order to achieve that next day delivery without being shackled by our own massive inventory we have worked hard to develop relationships with manufacturers and warehouses. We have installed our own proprietary technology in their warehouses so we know what stock they have and what we can offer to our customers immediately. We can then follow that product all the way from that warehouse, into the back of a van, and to their door. That gives us an unbeatable proposition – a vast product range, available for delivery to the customer very quickly – which is ultimately a fantastic customer experience.
You’ve claimed you can achieve a turnover of £500m in the future. How will you achieve that?
The UK home and garden market is estimated to be worth about £45 billion and that is increasingly shifting to an online consumer base. By continuing to invest in new product lines, enhancing technology and maintaining our record of delivery and customer service, we can grow a business of £500m turnover without even looking to the international market.
Who are your competitors and how do you intend to stay ahead of them?
Our competitors are everyone selling furniture and homewares online. We stay ahead by offering a better range, with faster delivery times and better pricing. Ultimately there will be no reason to shop elsewhere for furniture and homewares.
Why would customers choose WorldStores over Tesco Direct and Argos?
We have the largest range of products for the home and garden on the internet. With more than 300,000 products available, which is a large factor more than Argos or even Tesco Direct, we can drive customers to our site purely through the breadth of choice. Add to that choice our ground breaking and reliable delivery times (we can get 70% of our products, including beds, to you next day), and our competitive prices and it starts to make sense!
Can you tell us a bit about your experience running a search marketing company and how it helped you running WorldStores?
It teaches you to be less emotional and more data driven about product selection and the customer experience.There’s less guesswork when you’re a data driven business.
Why did you decide to take external investment?
It was a tricky decision. We had already had quite a few offers, but the timings had been wrong as we were making a good profit and growing at a steady pace. But Balderton showed us that by taking external investment from them we could build on the value that we had already created within the business by accelerating new product lines and hiring a top quality team to work with us.
Is an IPO on the cards?
We are considering all future options, so haven’t ruled it out of course. IPOs always depend on context and market conditions so we’re definitely not committing to one at this stage, but we will continue to keep an open mind on what is best for the future development of the company.
What are your future plans?
More of the same, but with an extra focus on building the Worldstores brand as a destination for everything for the home.